In the current SVOD ecosystem, users tend to subscribe to various platforms but are still attracted to compelling content from other platforms. Users could then watch such content (a) by subscribing to the corresponding platforms, which would imply an increase in total SVOD expenditure if no proprietary subscription is cancelled, or (b) by using illegal streaming/downloading sites, which would not imply any cost. To navigate this difficult situation, SVOD players could try to gain new subscribers and retain current ones through various incentives in two non-exclusive ways: (a) lowering the subscription rates in exchange for advertising acceptance and/or loyalty commitment; and (b) preventing the use of pirated SVOD content through prosocial and/or threatening messaging. As suggested below, users will not respond to such incentives uniformly but will respond in different manners depending on their dispositions.
2.1. Tiered Discounts Based on Advertising and Loyalty
The hypotheses we propose can be derived from social exchange theory (SET), which is a broad conceptual framework that helps to understand how parties involved in social and economic relationships implicitly or explicitly calculate the worth of their exchanges by comparing the associated costs and benefits [
14,
15]. SET has been used to explain a wide variety of economic exchanges, such as between marketers and consumers [
16], advertisers and users [
17], and streamers and viewers [
18], but it has apparently never been used to explain the relationship between providers and users of SVOD services.
In the SVOD business, platforms are willing to offer advertising-based discounts because this type of exchange brings them a good cost-benefit balance. Although such discounts imply a reduction in average revenue per subscription, advertising management provides an additional source of revenue, and platforms can expand their potential market through price discrimination, that is, by tailoring price schedules to satisfy both price-sensitive and non-price-sensitive consumers.
In turn, users face a more complex cost-benefit analysis. As benefits, users would pay a lower price and receive more personalized ads, which are better valued than traditional non-personalized ads [
19,
20]. As costs, users would have to accept advertising, which originally did not exist on SVOD platforms, and tolerate the interruption of SVOD content with commercials, which are considered more intrusive than traditional TV ads [
21] and are perceived as especially bothering when being non-skippable [
22,
23]. Reasonably, the perceived cost of accepting commercials will not be the same for all users but will depend on their personal attitude toward advertising.
Attitude toward advertising is a disposition that users gradually develop by learning the advantages and disadvantages that ads provide them [
24]. Ads in online videos can be considered advantageous when perceived as entertaining, informative, credible, and personalized [
20,
25], or disadvantageous when perceived as intrusive, excessive, or irritating [
26,
27]. Users with favorable attitudes toward advertising are more likely to accept a greater number of commercials per video [
25], reject the use of ad blockers [
28], and avoid skipping pre-roll video ads [
29]. Conversely, users with unfavorable attitudes toward advertising tend to skip commercials and, if this is not possible, to move their attention to second-screen devices, such as smartphones and tablets [
19].
Consumers assess the costs and benefits they perceive in the relationship with a service provider and value the overall utility of initiating/continuing/canceling the relationship [
30,
31]. Overall utility value has been found to be a robust predictor of intentions to pay for online services such as SVOD platforms [
32], mobile apps [
33], and streaming apps [
34]. Presumably, platforms’ tiered advertising discounts can increase subscription intention when ad-friendly (ad-averse) users have an added utility in getting a discount in exchange for viewing ads (in paying the full fee to avoid ads). In other words, the interaction between advertising attitude and advertising level is expected to positively affect subscription intention.
Hypothesis 1. A tiered advertising discount will increase subscription intention when the platform’ advertising levels interact positively with users’ advertising attitude.
Compared to the previous incentive, tiered loyalty discounts provide a worse cost-benefit balance for SVOD providers in the short term. As costs, these players would not have an additional source of revenue in return and would lose both the discounts granted to new subscribers and the discounts enjoyed by users who would have kept their subscriptions at the usual prices. As benefits, the players could engage in price discrimination, increase subscriber retention, and reduce the practice of contracting the service and canceling it right after viewing the desired content.
In turn, users would benefit from the fee reduction but would have to fulfill a loyalty commitment for the fixed period, during which they could not reallocate the budget for the contracted platform to another platform with more compelling content. However, loyalty commitment is not perceived as equally costly by all users because of their differences in loyalty attitudes [
35]. On the one hand, certain consumers prioritize the possibility of canceling the contract at any time to address the uncertainty that the supplier will reduce quality [
35] or that the users themselves will lose their initial motivation [
36]. On the other hand, some consumers are more oriented toward establishing long-term relationships with suppliers [
35,
37] and avoiding the monetary and non-monetary costs associated with switching suppliers [
38,
39].
Reasonably, platforms’ tiered loyalty discounts can increase subscription intention when users more inclined (reluctant) to loyalty have an added utility in getting a discount in exchange for a stay commitment (in paying the full fee to avoid a stay commitment).
Hypothesis 2. A tiered loyalty discount will increase subscription intention when the platform’ loyalty scheme interacts positively with users’ loyalty attitudes.
2.2. Messages to Prevent the Use of Pirated SVOD Content
Illegal streaming/downloading sites are places where SVOD providers cannot control the use of their own content while users can freely consume it with excellent video quality and quick access after the platform’s release date [
40]. This unauthorized use of SVOD content completely unbalances the economic relationship because users benefit from a copyrighted work without paying any compensation to the copyright holders. A relationship like this violates the norm of reciprocity that is central to the SET [
15,
41]. To make users assume their reciprocating responsibility, SVOD platforms can issue messages that both arouse user sensitivity toward the film industry and announce penalties against unauthorized users. We suggest that the effectiveness of such messages will be conditioned by the content and credibility of the message itself as well as by the user’s dispositions.
As suggested by cognitive dissonance theory [
42], anti-piracy messages can produce a psychological tension in pirated content users when perceiving the inconsistency between their behavior and the message, in response to which such users could control the tension either by modifying their behavior or by counter-arguing the message content [
43]. Promoters of anti-piracy messages have often tried to overcome recipient resistance through a prosocial approach based on emphasizing the damage caused by piracy to the people and organizations involved in creative industries [
44]. Previous studies on the prosocial approach effectiveness have found mixed results, with evidence that prosocial messages reduce the intention to pirate [
8,
45] and evidence of no such effect [
44,
46]. Our study suggests that the user’s justice sensitivity and the message credibility may help explain whether a prosocial message is effective.
Justice sensitivity is a personality trait that describes how readily individuals perceive and how strongly they react to injustice [
47,
48]. Justice sensitivity can take four different forms, depending on whether the individual is a victim, an observer, a beneficiary, or a perpetrator of injustice, these last two forms being more strongly associated with other prosocial personality traits [
49]. Notably, people higher in justice sensitivity engage in more community related activities [
50], feel more obliged to compensate victims of injustice [
51], and are more willing to sacrifice their own resources to restore justice [
52]. On the role of sensitivity justice in anti-piracy message effectiveness, there appears to be only collateral evidence: the interaction between a prosocial message and users’ perceived moral obligations produces a significant reduction in piracy intention [
45].
Message credibility is the extent to which an individual perceives information presented in the message as accurate, authentic, and believable [
53]. Interestingly, previous studies show that message credibility positively influences the acceptance of socially desirable messages, such as those related to reducing tobacco use [
54], raising awareness of the risks of alcohol [
55], and promoting pro-environmental behaviors [
56]. Likewise, a user of pirated SVOD content who receives an anti-piracy message and perceives it as non-credible is expected to overcome his/her discomfort by counter-arguing that the message is unreliable. However, if the message is perceived as highly credible, that user is more likely to elaborate on the information and feel the need to reciprocate for consuming copyrighted works.
Based on this rationale, users of pirated SVOD content who receive a prosocial anti-piracy message will increase their subscription intention when (a) they have sufficient sensitivity to see themselves as perpetrators and beneficiaries of an injustice against copyright holders and (b) the message is perceived as credible enough to make them think about the harm caused by piracy and start compensating copyright holders. In other words, increase in subscription intention depends on the interaction among the pirated SVOD content users, their sensitivity to justice, the prosocial message, and the credibility of this message.
Hypothesis 3.
A prosocial anti-piracy message will lead pirated SVOD content users to enhance subscription intention when they are sensitive to justice and perceive the message as credible.
Promoters of anti-piracy messages have also often used a threatening approach based on emphasizing the legal consequences of committing digital piracy [
44]. Previous research on this approach’s effectiveness has reported inconsistent results, with evidence of no influence [
57], evidence of increasing influence linked to threat intensity [
58], and evidence that individuals sensitive to legal threats reduce their attitude toward piracy but not their intention to commit piracy [
59]. Based on deterrence theory, we propose that the user’s fear of punishment and the message credibility could help clarify threatening approach effectiveness.
Deterrence theory holds that the threat of legal sanctions inhibits individuals from committing criminal and deviant acts [
60]. Indeed, the threat of legal sanctions has proven to be an effective way to reduce some illegal acts, such as tax evasion [
61], adolescent drug use [
62], and traffic violations [
63]. The effectiveness of legal sanctions in deterring law breaking depends on the extent to which the individual perceives the punishment to be severe, certain, and swift [
64,
65]. Regarding digital piracy deterrence, severity and certainty of punishment are the factors with the greatest potential to inhibit the intention to pirate [
9,
66].
Severity of punishment is the degree to which an individual perceives that legal consequences of piracy will be harsh. A threatening message may emphasize the imposition of harsher punishments (e.g., higher fines and tougher legal action), but its deterrent effect on the intention to pirate will depend on whether the individual feels a sufficient fear of punishment. Interestingly, stiffer penalties for using illegal streaming services have been proven more effective among individuals more fearful of punishment [
67].
Certainty of punishment is the extent to which an individual perceives as likely that anyone who engages in digital piracy will be detected and punished. Punishment certainty has shown a negative effect on attitude toward piracy [
68,
69] and intention to pirate [
9,
66]. A threatening message may announce that pirated content users will surely receive punishments (e.g., equal to those practiced in other countries), but its effectiveness will depend on whether the individual considers the message to be sufficiently credible and thus perceives the punishments as very likely.
All things considered, an announcement about the introduction of more severe and certain punishments is expected to deter illegal use (and promote legal use) of SVOD content if users are sufficiently afraid of the punishments and perceive the message as sufficiently credible.
Hypothesis 4. A threatening anti-piracy message will lead pirated SVOD content users to enhance subscription intention when they are afraid of punishment and perceive the message as credible.