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User Payment Patterns for Subscription Video-on-Demand Services
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Subscription video-on-demand platforms such as Netflix and HBO Max are being increasingly challenged by the widespread practice of sharing accounts with individuals outside the household. Platforms face a massive loss of revenue due to the opportunistic behavior of many users who enjoy content without paying anything or paying only a part of the required subscription fees.

film business consumer behavior account sharing
Subjects: Management
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Update Date: 12 May 2023
Table of Contents

    1. Introduction

    Subscription video-on-demand (SVOD) has greatly disrupted how users consume movies, series, and other video content. In exchange for fees that are generally considered most convenient (Palomba 2020), SVOD subscribers are empowered to watch a wide variety of video content whenever, wherever, and however they desire. Unsurprisingly, the number of subscriptions has seen remarkable growth globally (Wayne and Castro 2021), and SVOD has steadily taken audiences away from well-established distribution channels, such as cinemas, DVD/Blu-ray, and TV networks (Schauerte et al. 2021; Weinberg et al. 2021). The explosive growth of the SVOD market has encouraged the entry of major competitors in recent years: Apple TV+ and Disney+ in 2019, HBO Max and Peacock in 2020, Discovery+ and Paramount+ in 2021, and SkyShowtime in 2022. Soon after, the market began to show some signs of maturity, such as a slowdown in the growth of new subscriptions and an acceleration in the growth of cancellations (Chakraborty et al. 2023; Wang 2022).
    In addition to growing rivalry, SVOD players face two major threats: the ease with which the public can enjoy content from pirated video sources and can use SVOD accounts without paying the required fees. Regarding the piracy threat, the direct release of film content on SVOD has made high-quality copies available almost immediately on unauthorized sites, which has ushered in a new age of piracy (De Kosnik 2020; Sharma et al. 2023). Moreover, in the last decade, the most common form of piracy has shifted from that of downloading large files in P2P networks to simpler direct viewing on streaming sites: in 2021, P2P and streaming contributed 11% and 79%, respectively, to global piracy (Alliance for Creativity and Entertainment 2022). Concerning the threat of unpaid fees, subscribers can give their login credentials to individuals living in other households (e.g., relatives, friends, and acquaintances), who can then make unauthorized use of all account content. When the SVOD market was growing rapidly, providers tacitly allowed this practice and even considered it beneficial to their business because (a) temporary sharing could serve as a test before subscription and (b) rigorous user authentication could encourage viewing the same content on illegal streaming websites (Kelly 2022; Loh 2019). Nevertheless, SVOD account sharing creates large gaps between the number of subscribers and the number of actual users: for example, Netflix acknowledged that globally almost a third of the households consuming its content did not actually have the required subscription (Nguyen 2022). The subscriber-user gap has prompted more and more industry insiders to stress (a) the importance of considering the unauthorized use of SVOD accounts as a new form of piracy and (b) the need to implement more rigorous methods of user authentication (Gardner 2019).
    In an increasingly competitive market, SVOD players have a growing need for subscription revenues to provide a solid source of funding, regardless of whether such revenues account for most sales (e.g., HBO Max) or whether there are significant additional revenues from advertising (e.g., Hulu) or cross-selling (e.g., Amazon Prime) (Hadida et al. 2021; Kübler et al. 2021). However, subscription revenues are a relatively fragile source of funding over which SVOD players have limited control because the actual payment of fees ultimately relies on the goodwill of users. In this complex situation, it is important to understand which factors motivate SVOD users in their decisions to pay the required fees. Although there have been calls to investigate this issue (Schauerte et al. 2021; Guo 2022), researchers have found no peer-reviewed studies on which individual factors influence SVOD payment patterns.

    2. Subscription Video-on-Demand Services

    In exchange for a monthly/annual fee, SVOD services typically allow subscribers (a) to obtain unlimited access to a wide selection of self-administered video content including original and exclusive titles, (b) to create multiple user profiles for the household members, (c) to simultaneously stream on multiple devices such as televisions, computers, tablets, and game consoles, and (d) to download their favorite content and play it offline anytime and anywhere. In addition, it is easy for users to contract, cancel, and restart their subscriptions.
    Although not authorized by SVOD services, subscribers can easily share their login credentials with individuals from other households, who may then access the same selection of video content under the same viewing conditions. In turn, non-subscription users may or may not provide financial compensation to the corresponding subscribers. All of this means that actual SVOD users may have essentially three payment patterns for the services enjoyed: pay the full subscription, share the subscription fee, and pay nothing. Note that the same consumer can use different payment patterns for different SVOD services.
    As a first step to understanding this phenomenon, researchers aim to explore which individual factors may influence the decision to pay all, part, or none of the corresponding subscriptions. Such individual factors can be tentatively understood under the umbrella of social cognitive theory, which Lowry et al. (2017) found to be the most efficient theoretical framework for the predictors of digital piracy identified in previous studies. However, it is worth noting that unauthorized SVOD use and digital piracy are partly similar and partly different. On the one hand, both behaviors consistently refer to the unauthorized use of digital content without providing the required compensation to copyright holders. On the other hand, the two phenomena show marked differences: first, there is a relatively strong (poor) social awareness of the illegitimacy of digital piracy (unauthorized SVOD use); second, digital piracy basically boils down to the dilemma of paying or not paying, while unauthorized SVOD use also covers the intermediate decision to pay only a part of the required fee.
    Social cognitive theory posits that individuals’ behaviors are the result of dynamic and reciprocal interactions of personal, behavioral, and environmental factors (Bandura 1986). This theory encompasses five sets of factors that help predict digital piracy (Lowry et al. 2017): outcome expectancies, which are the anticipated consequences that individuals consider when determining whether digital piracy is worth committing (e.g., the benefit of saving money and the risk of legal repercussions); social learning, or the process by which social influences, social environment, and derived norms affect individuals’ willingness to encourage or discourage digital piracy (e.g., perceived ethicality shaped by societal values and imitation of the peers’ piracy practices); self-efficacy, which refers to the level of individuals’ confidence in their ability to successfully engage in piracy and control the desired outcomes (e.g., proficiency in obtaining pirated content and ability to avoid malware); moral disengagement, or the process by which individuals suspend or ignore their own judgment to commit piracy that they judge to be wrong, unethical, or immoral, regardless of their reasons for such a judgment (e.g., trivialization of the harm to copyright holders and minimization of one’s own responsibility); and environmental and other factors, which are the external conditions and personal characteristics that may facilitate or hinder the practice of digital piracy (e.g., internet connection quality and individual demographics).
    Although the potential predictors of unauthorized SVOD use are quite numerous and varied, researchers are compelled to focus on the factors available in the secondary data used in this study. Specifically, 21 individual factors are examined, after being classified for convenience into three relatively homogeneous groups: six demographic factors, seven attitude-related factors, and eight behavior-related factors. The discussion of the possible influence of each factor is based on the social cognitive theory framework, the available evidence in the digital piracy field, and researchers' intuitive understanding.

    2.1. Demographic Factors

    Consistent with social cognitive theory (Lowry et al. 2017), several individual demographics could influence unauthorized SVOD use in a way that is analogous to how they have been found to affect digital piracy.
    The potential influence of gender is rather uncertain due to both the lack of theoretical justification and the existence of mixed evidence of its influence on digital piracy, with some studies showing a higher incidence in males than in females (Bhattacharjee et al. 2003; Coyle et al. 2009) and other studies finding no significant differences (Al-Rafee and Cronan 2006; van der Byl and Van Belle 2008). In contrast, the influence of age seems rather more likely for two reasons. Firstly, compared to older individuals, younger ones are more inclined to share passwords for their personal computers (Byrne et al. 2016) and social networks (Bevan 2018; Whitty et al. 2015), an inclination associated with a lower concern for information privacy and sharing-related risks (Byrne et al. 2016; Steijn et al. 2016). Secondly, younger individuals show a greater willingness to download copyrighted material without paying (Coyle et al. 2009; Al-Rafee and Cronan 2006). Thus, it would be reasonable to find that age is negatively related to decisions to share SVOD accounts and to pay part or nothing of the corresponding subscription fees.
    The potential roles played by education and household income are suggested by intuitive arguments and empirical results. Intuitively, higher levels of education may help raise awareness of the importance of fairly compensating the content creators, while households with higher income levels are more able to pay the full fees for SVOD services. Empirically, a willingness to pay for using online digital content was found to be directly related to education (Fetscherin and Lattemann 2007) and household income (Coyle et al. 2009). Thus, it would be unsurprising to find a positive influence of education and household income on full payment for SVOD services.
    Another promising demographic is household size or number of people living in the household. There is anecdotal evidence that SVOD users living in small-sized households share unused available user profiles with non-cohabitants in exchange for monetary compensation (Loh 2019). On the contrary, households with more residents than available user profiles are less likely to share their SVOD accounts. It is thus reasonable to expect that household size negatively influences the sharing of SVOD usage and payment.

    2.2. Attitudinal Factors

    The SVOD full payment pattern could be positively influenced by four attitude-related factors (sense of duty, online privacy concern, attitude toward novelty, and attitude toward quality), whereas SVOD payment sharing could be positively influenced by three different ones (interest in collaborative consumption, preference for teamwork, and level of cosmopolitanism).
    The sense of duty can prevent or inhibit the process of moral disengagement by which some individuals self-justify the acceptability of their piracy activities (Shang et al. 2008). This self-justification involves the neutralization of self-blame by disregarding or minimizing the violation of a personal duty and the negative impact on third parties (Lowry et al. 2017; Bandura 2002). The neutralization of the personal duty to compensate copyright holders increases willingness to engage in digital piracy (Higgins et al. 2008; Siponen et al. 2012). It is thus not surprising that a sense of duty has been found to reduce the likelihood of engaging in digital piracy (van Rooij et al. 2017), and that a similar pattern can be found with respect to unauthorized SVOD use.
    Online privacy concern can fuel the expectation that piracy will jeopardize the security of personal information. In fact, engagement in digital piracy decreases with the increase in the perceived risk of personal information becoming accessible to others (Jeong et al. 2012). In the case of SVOD use, the risk comes from sharing the account password with the consequent possibility that non-cohabitants could track the account viewing history, obtain bank details, change contracted conditions, etc. Interestingly, there is anecdotal evidence that individuals more concerned about privacy and security are more reluctant to share their SVOD accounts (Sailaja and Fowler 2022). Thus, individuals with more online privacy concern will be more likely to follow an SVOD full payment pattern, which will free them from having to share the account.
    Attitudes toward both novelty and quality can improve the willingness to compensate copyright holders to minimize the expectation of a lowering of artistic standards due to the losses from digital piracy and unauthorized SVOD use. Consistent with the relationship between the attitude toward novelty and the willingness to pay for copyrighted creative works (Hsu and Shiue 2008; Redondo and Charron 2013), users with a more positive attitude toward novelty might feel more compelled to properly compensate the creators of SVOD content. Considering that quality sensitivity is related to the willingness to financially contribute to digital content quality (Kim et al. 2017; Lee et al. 2019), SVOD users with a more positive attitude toward quality might be more prone to compensate providers to preserve content standards.
    The interest in collaborative consumption, preference for teamwork, and level of cosmopolitanism could help build the self-efficacy required to share the use and cost of SVOD accounts. Despite sharing the same theoretical framework (Bandura 1986; Lowry et al. 2017), engaging in digital piracy primarily requires self-efficacy in technical skills (e.g., knowing how to use piracy software and how to find download sites), while engaging in SVOD sharing primarily requires self-efficacy in interpersonal skills (e.g., establishing a trusting relationship between sharers and resolving possible conflicts). The influence of technical skills on digital piracy has been observed (Cronan and Al-Rafee 2008; Sahni and Gupta 2019), but the influence of interpersonal skills on SVOD sharing remains unexplored. Even without prior evidence, there are good reasons to speculate on the possible influence of the three factors studied. Firstly, since collaborative consumption is about consumers sharing resources (e.g., car sharing and peer-to-peer accommodation), users more interested in collaborative consumption could be more inclined to share the use and cost of SVOD accounts. Secondly, as teamwork is based on interaction and cooperation with others to efficiently manage work and non-work activities, individuals with a greater preference for teamwork may be more likely to enjoy the mutual benefit of sharing the use and cost of SVOD accounts. Thirdly, considering that cosmopolitan individuals have more online interaction and collaboration with people from other countries/cultures, the level of cosmopolitanism could influence the likelihood of sharing the use and cost of SVOD accounts.

    2.3. Behavioral Factors

    The entry of new competitors is an environmental change that highlights the number of SVOD services used as one of the most potentially influential factors in users’ payment patterns. Consumers are of course attracted by the growing range of SVOD providers, each with exclusive content, but are also turned off by the high cost of subscribing to all or many of them (Loh 2019). In order to enjoy a greater number of SVOD services, consumers might agree among themselves to share the use and cost of multiple subscriptions.
    Price sensitivity shapes users’ financial expectations when deciding whether or not to pay for copyrighted content (Jacobs et al. 2012; LaRose and Kim 2007). Intuitively, a negative relationship between price sensitivity and a willingness to pay copyright fees can be expected. Indeed, there is evidence that less price-sensitive users are more likely to pay for their movie downloads (Redondo and Charron 2013), while more price-sensitive ones are more likely to consume pirated movie content (Ho and Weinberg 2011). Similarly, less (more) price-sensitive SVOD users might be more inclined to pay the full subscription (to pay anything at all).
    Past piracy behavior has a positive effect on the current intention to engage in digital piracy (Cronan and Al-Rafee 2008), an effect that has been attributed to both habituation (Ajzen 2002) and moral disengagement (Garbharran and Thatcher 2011). If individuals have engaged in digital piracy, it is likely that they have previously invoked the moral disengagement mechanism and that they currently require less moral disengagement to justify the same behavior (Garbharran and Thatcher 2011). Similarly, individuals who have engaged in unpaid movie downloading might reasonably require less moral disengagement to justify an unpaid use of SVOD content. Thus, unpaid movie downloading is a promising candidate for influencing the pattern of unpaid SVOD use.
    Individuals who are more motivated by self-interested reasons are more likely to use moral disengagement mechanisms to justify the acceptability of their antisocial behaviors (Kish-Gephart et al. 2014). Conversely, individuals who participate in charity and community activities show that they put the interests of others before their own interests, which is contrary to the practice of benefiting oneself from free content at the expense of the legitimate benefit of creators. Thus, charity and community participation could influence the willingness to give fair compensation to the creators of SVOD content consumed.
    Finally, researchers include four factors whose influence on SVOD payment patterns is difficult to specify a priori: binge-watching behavior, which is a frequent practice among the most enthusiastic SVOD users; frequency of cinema attendance, which shows the fondness for watching movies in the most traditional way; level of video-on-demand (VOD) use, which reveals the extent to which the self-administered consumption of video content is preferred; and level of internet use, which indicates the extent to which the internet is used in ordinary activities. Within the framework of social cognitive theory, these four factors can be classified as environmental factors that can act as enablers or inhibitors of the willingness to pay for SVOD content.


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    Subjects: Management
    Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to : ,
    View Times: 40
    Revisions: 2 times (View History)
    Update Date: 12 May 2023
    Table of Contents


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      Redondo, I.; Serrano, D. User Payment Patterns for Subscription Video-on-Demand Services. Encyclopedia. Available online: (accessed on 01 June 2023).
      Redondo I, Serrano D. User Payment Patterns for Subscription Video-on-Demand Services. Encyclopedia. Available at: Accessed June 01, 2023.
      Redondo, Ignacio, Diana Serrano. "User Payment Patterns for Subscription Video-on-Demand Services" Encyclopedia, (accessed June 01, 2023).
      Redondo, I., & Serrano, D. (2023, May 11). User Payment Patterns for Subscription Video-on-Demand Services. In Encyclopedia.
      Redondo, Ignacio and Diana Serrano. "User Payment Patterns for Subscription Video-on-Demand Services." Encyclopedia. Web. 11 May, 2023.