“Rollout of HD VOD and Internet movies on day-and-date of DVD release is a growth opportunity not only because consumers value them and will pay more, but also because this
expanded availability will increase overall movie viewership. The Oliver Wyman study found that that these enhanced offers would lead U.S. consumers to watch and pay for an average of three more movies per year than they do today, creating a net annual increase in domestic consumer movie spending of more than $5 billion, from the current base of $50 billion.”
As this study of the management consultancy Oliver Wyman reveals, online video services such as VOD and PPV gain an increasing importance nowadays. These trends towards online video services (OVS) invite to a closer examination of the consumer behaviour regarding these services.
This essay focuses on consumer behaviour of the consumption of OVS, such as iTunes Movies and CinemaNow. In particular the aspect of perceived risk will be examined, because these products can only be consumed online, an environment where the perceived risk is still high and a possible barrier for the usage of OVS.
Table of Contents
1. Introduction
2. Online video services
3. Consumer Behaviour towards online video services
4. Literature Review – Perceived Risk in Online Shopping
4.1 Perceived Risk
4.2 Perceived Risk in e-Commerce
5. Implications
5.1 Theoretical
5.2 Managerial
5.3 Public Policy
6. Marketing Plan
7. References
Objectives and Topics
This report investigates consumer behavior regarding online video services (OVS), with a primary focus on how perceived risk acts as a barrier to the adoption of legal digital content platforms and how providers can mitigate these concerns.
- Analysis of consumer behavior models applied to online streaming and rental.
- Evaluation of perceived risk dimensions (financial, functional, psychological, time) in digital environments.
- Examination of demographic and gender differences in online consumption habits.
- Strategic marketing recommendations for reducing consumer dissonance and enhancing trust.
Excerpt from the Book
4.1 Perceived Risk
Perceived risk is “the belief that use of a product has potentially negative consequences, either physical or social” (Solomon et al, 2010, p. 650). It is “one pivotal aspect of consumer behaviour because risk is often perceived to be painful in that it may produce anxiety, in which case it must be dealt with in some manner by the consumer.” (Taylor, 1974, p.54). This perceived risks can have various factors, such as lack of information, newness, high price, complex technology and brand differentiation (Kamleitner, 2011a). Perceived risk can influence the consumption motivation of a consumer (Hoyer & MacInnis, 2007) and also influences the consumer’s decision to modify, postpone, or avoid a purchase decision (Kotler & Keller, 2009). It can be divided in two relevant dimensions: Uncertainty about the outcome and uncertainty about the consequences (Taylor, 1974).
When consumers want to watch a movie online, they can perceive certain risks while making their choice which provider to choose. These risks can arise due to newness and technology, which can be the case especially for older and/or inexperienced internet user. As soon as they have to download a program in order to use the OVS, they are worried about the program’s safety and compatibility, or might just not be able to download and install the program due to a lack of knowledge how to use the platform. Regarding the uncertainty of the outcome, the consumer cannot be 100% sure that the video will work, play the movie in the expected quality and is downloaded and ready to begin within the expected time. This is aggravated by the possibility that the consumer might not like the chosen movie. This problematic is accompanied by the uncertainty about the consequences, which could range from misuse of credit card information until problems with the computers resulting out of compatibility problems with the program.
Summary of Chapters
1. Introduction: Outlines the growth of online video services and sets the scope for examining consumer behavior and perceived risk.
2. Online video services: Defines the market structure, identifying legal VOD providers versus illegal peer-to-peer sites and common consumption barriers.
3. Consumer Behaviour towards online video services: Explores segmentation, motivation, perceptual processes, and learning theories as they relate to OVS usage.
4. Literature Review – Perceived Risk in Online Shopping: Analyzes the types of risks consumers face in digital environments and applies e-commerce research to video services.
5. Implications: Discusses theoretical gaps, managerial strategies for different involvement levels, and public policy needs for internet security.
6. Marketing Plan: Provides actionable recommendations for branding, target segment strategies, and technical interface improvements.
7. References: Lists the academic and industry sources utilized for the report.
Keywords
Consumer Behaviour, Online Video Services, Perceived Risk, E-Commerce, Market Segmentation, Elaboration Likelihood Model, Instrumental Conditioning, Digital Consumption, Privacy, Financial Risk, Technical Compatibility, Marketing Strategy, Trust, Customer Loyalty, Internet Security.
Frequently Asked Questions
What is the core focus of this report?
The report examines consumer behavior in the context of online video services, specifically investigating how perceived risk affects a consumer's decision to use legal digital platforms.
What are the primary themes discussed?
The document covers market dynamics, consumer psychology, the role of perceived risk in online transactions, and strategic marketing tactics to improve platform adoption.
What is the main research objective?
The objective is to identify why consumers may avoid legal online video services and to recommend strategies that providers can use to reduce perceived risk and increase conversion.
Which scientific methods are applied?
The report employs a literature review, synthesizing theories such as the elaboration likelihood model, instrumental conditioning, and heuristics to analyze consumer behavior.
What does the main body cover?
The main body covers a definition of OVS, an analysis of consumer behavior factors, a comprehensive literature review on perceived risk in e-commerce, and practical marketing recommendations.
What defines the characterizing keywords?
The keywords highlight the intersection of behavioral economics, digital marketing, and cybersecurity, reflecting the report's interdisciplinary approach.
How do gender differences influence online consumption in this report?
Research cited suggests that men and women demonstrate different attitudes toward online shopping and technology adoption, necessitating segmented marketing approaches.
What role does 'perceived risk' play in the decision to use illegal peer-to-peer sites?
Consumers may prefer illegal sites because they perceive them as having fewer barriers, such as no need for registration or payment, thereby avoiding the risks associated with providing personal data on legal platforms.
- Citar trabajo
- Diplom-Kauffrau / MSc Christina Liessem (Autor), 2011, Consumer Behaviour. Online video services and perceived risk, Múnich, GRIN Verlag, https://www.grin.com/document/283947
