Main Article Content

Abstract

Understanding the underlying variables that influence willingness to purchase certain products is crucial as it helps businesses to make better decisions to market their products. This study focuses on the Video on Demand industry and aims to explore the relationship between Netflix Subscription Continuance and Price that is mediated by two variables, namely Perceived Quality and Content. This research addresses the reason behind the phenomenon of customers’ decision to keep subscribing to Netflix despite the fact that there is an increasing price on the platform. The data for this paper is obtained from 111 Netflix subscribers in Jakarta who once and/or continue subscribing to Netflix, while the results are analyzed using SmartPLS. The findings of this research reveal that the direct relation between Price and Subscription Continuance is not significant. However, the indirect relationship that is mediated by Perceived Quality and Content both indicate significant relationships. This study discloses that improving Content and Perceived Quality will result in an increase in Subscription Continuance of Netflix.

Keywords

video on demand price perceived quality content subscription continuance

Article Details

How to Cite
Galingging, J. G. A., Niha, I. S., Nurfaiza, N., & Pangaribuan, C. H. (2023). Examining The Underlying Variables Between Price and Subscription Continuance of Netflix’s Subscribers in Jakarta. Eligible : Journal of Social Sciences, 2(2), 237–253. https://doi.org/10.53276/eligible.v2i2.72

References

  1. Al-Mamun, A., Rahman, M. K., & Robel, S. D. (2014). A Critical Review of Consumers’ Sensitivity to Price: Managerial and Theoretical Issues. Journal of International Business and Economics, 2(2), 01-09.
  2. Amoroso, D., & Lim, R. (2017). The Mediating Effects of Habit on Continuance Intention. International Journal of Information Management, 37(6), 693-702.
  3. Ansari, A., & Riasi, A. (2016). An Investigation of Factors Affecting Brand Advertising Success and Effectiveness. International Business Research, 9(4), 20. https://doi.org/10.5539/ibr.v9n4p20
  4. Ardhia, R. W., & Mayangsari, L. (2020). A Study of Factors Influencing Indonesian Consumers’ Purchase Intention towards Its Local Fashion Brands. KnE Social Sciences, 1162-1173.
  5. Ashfaq, M., Yun, J., Waheed, A., Khan, M. S., & Farrukh, M. (2019). Customers’ Expectation, Satisfaction, and Repurchase Intention of Used Products Online: Empirical Evidence from China. SAGE Open, 9(2), 215824401984621.
  6. Ashraf, S. F., Li, C., & Mehmood, B. (2017). A Study of Premium Price Brands with Special Reference to Willingness of Customer to Pay. International Journal of Academic Research in Business and Social Sciences, 7(7), 619-639.
  7. Auditya, A. & Hidayat, Z. (2021). Netflix in Indonesia: Influential Factors on Customer Engagement among Millennials’ Subscribers. Journal of Distribution Science, 19, 89-103.
  8. Bettiga, D., Bianchi, A. M., Lamberti, L., & Noci, G. (2020). Consumers Emotional Responses to Functional and Hedonic Products: A neuroscience research. Frontiers in Psychology, 11, 559779.
  9. Bhattacherjee, A. (2001). Understanding Information Systems Continuance: An Expectation-Confirmation Model. MIS Quarterly, 25(3), 351-370.
  10. Clark, T. (2022, April 20). How Netflix, Disney+, HBO Max, and Major Streamers compare on content and cost. Business Insider. www.businessinsider.com/major-streaming-services-compared-cost-number-of-movies-and-shows-2022-4%3famp
  11. Cortinhas, H. J. M. (2022). Key Drivers of Customer Loyalty in Subscription Video-on-Demand (SVOD) in the Portuguese Market [Doctoral dissertation, University of Chicago].
  12. Dholakia, U. M. (2016, August 9). A Quick Guide to Value-Based Pricing. Harvard Business Review. https://hbr.org/2016/08/a-quick-guide-to-value-based-pricing
  13. Egede, E. A., & Chuks-Nwosu, E. (2013). Uses and Gratification Theory and the Optimization of the Media in the Privatization of State Owned Enterprises in Nigeria. Journal of Economics and Sustainable Development, 4(16), 202-213.
  14. Faith, D. O., & Agwu. E. (2014). A Review of the Effect of Pricing Strategies on the Purchase of Consumer Goods. International Journal of Research in Management, Science & Technology, 2(2), 88-102.
  15. Fitzgerald, T. (2022, August 11). How Much Did Netflix Price Increase Lead to Subscriber Loss? Forbes. https://www.forbes.com/sites/tonifitzgerald/2022/08/10/how-much-did-netflix-price-increase-lead-to-subscriber-loss/
  16. Ghozali, Imam. (2016). Aplikasi Analisis Multivariete Dengan Program IBM SPSS 23 (8th ed.). Semarang Badan Penerbit Universitas Diponegoro.
  17. Hair, J. F. Jr., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2010). Multivariate Data Analysis, 7th Ed. Prentice-Hall, Upper Saddle River, NJ.
  18. Hamid, M. R., Sami, W., & Mohmad Sidek, M. H. (2017). Discriminant Validity Assessment: Use of Fornell & Larcker criterion versus HTMT Criterion. Journal of Physics: Conference Series, 890, 012163.
  19. Hansen, T. (2015). Understanding Consumer Perception of Food Quality: The Cases of Shrimps and Cheese. British Food Journal, 107(7), 500-525.
  20. Hidayat, D., Sudirman, N. F., Andika, S., Patricia, Putra, O. B. P., Pangaribuan, C. H., & Pasaribu, P. (2022). The Direct and Indirect Influence of E-commerce Capability on Sustainable Competitive Advantage: The Importance of Agility. International Journal of Current Science Research and Review, 5(7), 2482-2489.
  21. Hoff, K., & Stiglitz, J. E. (2016). Striving for balance in economics: Towards a theory of the social determination of behavior. Journal of Economic Behavior & Organization, 126(B), 25-57.
  22. Johny, J, & Alukal, P. (2018). Video on Demand Industry: Challenges and Opportunities in the Indian Market. International Journal of Innovative Science and Research Technology, 3(5), 598-612.
  23. Karimi, L., Khodabandelou, R., Ehsani, M., & Ahmad, M. (2014). Applying the Uses and Gratifications Theory to Compare Higher Education Students’ Motivation for Using Social Networking Sites: Experiences from Iran, Malaysia, United Kingdom, and South Africa. Contemporary Educational Technology, 5(1), 53-72.
  24. Kennedy, I. (2022). Sample Size Determination in Test-Retest and Cronbach Alpha Reliability Estimates. British Journal of Contemporary Education, 2(1), 17-29.
  25. Kevin, L., & Tjokrosaputro, M. (2021). Pengaruh Perceived Price dan Country of Origin Terhadap Repurchase Intention Merek Minuman Xing Fu Tang di Jakarta: Word of Mouth Sebagai Variabel Mediasi. Jurnal Manajerial dan Kewirausahaan, 3(1), 52-60.
  26. Kim, J. H. (2019). Multicollinearity and Misleading Statistical Results. Korean Journal of Anesthesiology, 72(6), 558-569.
  27. Kim, M. S., Kim, E., Hwang, S. Y., Kim, J., & Kim, S. (2017). Willingness to pay for over-the-top services in China and Korea. Telecommunications Policy, 41(3), 197-207. https://doi.org/10.1016/j.telpol.2016.12.011.
  28. Kübler, R., Seifert, R. & Kandziora, M. (2021). Content Valuation Strategies for Digital Subscription Platforms. Journal of Cultural Economics, 45, 295-326.
  29. Lestari, E., & Soesanto, O. R. (2020). Predicting Factors That Influence Attitude to Use and Its Implications on Continuance Intention to Use SVOD: Study on Netflix Users of Indonesia [Prediksi Faktor-Faktor Yang Mempengaruhi Sikap Penggunaan Dan Implikasinya Terhadap Keberlanjutan Niat Penggunaan SVOD: Studi Pada Pengguna Netflix di Indonesia]. DeReMa (Development Research of Management). Jurnal Manajemen, 15(2), 183.
  30. Levrini, G. R., & Santos. J. D. M. (2021). The Influence of Price on Purchase Intentions: Comparative Study between Cognitive, Sensory, and Neurophysiological Experiments. Behavioral Sciences, 11(2), 16.
  31. Lomboan, L. K. (2017). Analysis the Influence of Perceived Quality, Perceived Price and Perceived Value on Consumer Purchase Intention in Traditional Fabrics (Case Study Kaeng Manado). Journal Berkala Ilmiah Efisiensi, 17(1), 100-112.
  32. Lu, J. (2014). Are Personal Innovativeness and Social Influence Critical to Internet Research Article information? Internet Research, 24(2), 134-159.
  33. Mazurek, J., García, C. F., & Rico, C. P. (2019). The Law of Demand and the Loss of Confidence Effect: An experimental study. Heliyon, 5(11), e02685.
  34. Nagaraj, S., Singh, S., & Yasa, V. R. (2021). Factors Affecting Consumers' Willingness to Subscribe to Over-The-Top (OTT) Video Streaming Service in India. Technology in Society, 65, 101534.
  35. Nilforushan, S., & Haeri, F. A. (2015). The Effect of Packaging Design on Customers’ Perception of Food Products’ Quality, Value, and Brand Preference (Case study: Pegah Pasteurized Cheese, in Isfahan city). WALIA Journal, 31(S3), 127-32.
  36. Nisriyna, N. A. (2022, July 25). Ini Platform Video on Demand yang Paling Banyak Digunakan di Indonesia. Gadgetdiva.id. https://www.google.com/amp/s/gadgetdiva.id/life/35079-platform-video-on-demand-banyak-pengguna/%3Famp
  37. Ogu, M. I. (2013). Rational Choice Theory: Assumptions, Strengths, and Greatest Weaknesses in Application Outside the Western Milieu Context. Arabian Journal of Business and Management Review (Nigerian Chapter), 1(3), 90-99.
  38. Oliver, R. L. (1980). A Cognitive Model for the Antecedents and Consequences of Satisfaction. Journal of Marketing Research, 17, 460-469,
  39. Ongkowijoyo, T. E. (2022). The Effect of Price and Product Quality on Consumer Satisfaction and Repurchase Interest at Cipork Keriyuk (Cab. G-Walk). International Journal of Review Management Business and Entrepreneurship (RMBE), 2(1), 11-23.
  40. Palomba, A. (2020). Do SVOD Product Attribute Trade-offs Predict SVOD Subscriptions and SVOD Account Access? Using Utility Constant Sums to Predict SVOD Subscriptions and SVOD Account Access. JMM International Journal on Media Management, 22(3-4), 168-190.
  41. Pancaningrum, E., & Rizaldy, D. V. (2022). Video on Demand: An Easy Way to Watch Movies - Studies on Consumer Behaviour. Journal of Management and Business, 21(1), 61-75.
  42. Pangaribuan, C. H., & Wijaya, J. T. (2020). Can Sexual Harassment Case Reduce Brand Reputation of a Ride-Sharing Company? Journal of Seybold Report, 15(8), 2348-2360.
  43. Pangaribuan, C. H., Ravenia, A., & Sitinjak, M. F. (2019). Beauty Influencer’s User-Generated Content on Instagram: Indonesian Millennials Context. International Journal of Scientific & Technology Research, 8(9), 1911-1917.
  44. Pardiman, P., & Khoirul, M. (2020). Entrepreneurial Readiness: What are the Roles of Entrepreneurial Education, Environment and Student’s Mindset? Technium Social Sciences Journal, 11, 339–354. https://doi.org/10.47577/tssj.v11i1.1483
  45. Putri, J. N. A. (2021, January 14). The Rise of Movie Streaming Platforms in Indonesia: What Comes After? Center for Digital Society. https://cfds.fisipol.ugm.ac.id/2021/01/14/the-rise-of-movie-streaming-platforms-in-indonesia-what-comes-after/#_edn1
  46. Reyes-Menendez, A., Palos-Sanchez, P. R., Saura, J. R., & Martin-Velicia, F. (2018). Understanding the influence of wireless communications and Wi-Fi access on customer loyalty: a behavioral model system. Wireless Communications and Mobile Computing, 1-16.
  47. Saputra, I. W., & Hidayat, Z. (2022). Networking as A Marketing Strategy: A case Study on the Indonesian Netflix Subscriber Community. Journal of Theoretical and Applied Information Technology, 100(19), 5696-5709.
  48. Schmidt, F. L., Viswesvaran, C., & Ones, D. S. (2006). Reliability is Not Validity and Validity is Not Reliability. Personnel Psychology, 53(4), 901-912.
  49. Septiani, D. I., & Chaerudin, D. I. (2020). The Effect of Customers’ Price Perception, Perceived Quality and Brand Image Toward Purchasing Intention in Bandung Local Shoe Brand. KnE Social Sciences, 1242-1254.
  50. Shintaputri, I. & Wuisan J. A. (2017). The Impact of Perceived Price towards Perceived Value Through the Mediation of Perceived Quality: A Case of Brand X Smartphone in Indonesian Middle-Class Customers. iBuss Management, 5(1), 29-42.
  51. Sürücü, L., & Maslakci, A. (2020> Validity and Reliability in Quantitative Research. Business and Management Studies: An International Journal, 8(3), 2694-2726.
  52. Taherdoost, H. (2017). Validity and Reliability of the Research Instrument; How to Test the Validation of a Questionnaire/Survey in a Research. SSRN Electronic Journal, 5(3), 28-36.
  53. The Jakarta Post. (2020, August 1). Netflix raises subscription prices for Indonesians. https://www.thejakartapost.com/life/2020/08/01/netflix-raises-subscription-prices-for-indonesians.html#
  54. Tjiptono, F. (2012). Strategi Pemasaran (III). Yogyakarta: Andi.
  55. Uslu, A., & Huseynli, B. (2018). Impact of Price Sensitivity on Repurchase Intention in terms of Personality Features. Uluslararası İktisadi ve İdari İncelemeler Dergisi, 515-532,
  56. Verma, D. P., & Gupta, S. S. (2004). Does Higher Price Signal Better Quality? Vikalpa: The Journal for Decision Makers, 29(2), 67-78.
  57. Vinzi, V. E., Chin, W. W., Henseler, J., & Wang, H. (2010). Handbook of Partial Least Squares: Concepts, Methods and Applications. Springer.
  58. Vlaev, I. (2018). Local choices: Rationality and the Contextuality of Decision-Making. Brain Sciences, 8(1), 8.
  59. Vo, T. T. N., & Nguyen, C. T. K. (2015). Factors Influencing Customer Perceived Quality and Purchase Intention Toward Private Labels in the Vietnam Market: The Moderating Effects of Store Image. International Journal of Marketing Studies, 7(4), 51-63.
  60. Wakefield, K. L., & Inman, J. J. (2003). Situational Price Sensitivity: The Role of Consumption Occasion, Social Context and Income. Journal of Retailing, 79(4), 199-212.
  61. Wang, T., Lin, C-L., & Su, Y-S. (2021). Continuance Intention of University Students and Online Learning during the COVID-19 Pandemic: A Modified Expectation Confirmation Model Perspective. Sustainability, 13, 4586.
  62. Wayne, M. L. (2022). Netflix Audience Data, Streaming Industry Discourse, and the Emerging Realities of ‘Popular’ Television. Media, Culture & Society, 44(2), 193-209.
  63. Whiting, A., & Williams, D. L. (2013). Why People Use Social Media: A Uses and Gratifications Approach. Qualitative Market Research, 16(4), 362-369.
  64. Willman-Iivarinen, H. (2017). The Future of Consumer Decision making. European Journal of Futures Research, 5(1). https://doi.org/10.1007/s40309-017-0125-5.
  65. Yu, L., Chen, Z., Yao, P., & Liu, H. (2021). A Study on the Factors Influencing Users’ Online Knowledge Paying-Behavior Based on the UTAUT Model. Journal of Theoretical and Applied Electronic Commerce Research, 16, 1768-1790.
  66. Yulisetiarini, D. Subagio, A, Paramu, H., & Irawan, B. (2017). Customer Repurchase Intention and Satisfaction in Online Shopping. International Business Management, 11(1), 215-221.
  67. Zhao, H., Yao, X., Liu Z., & Yang, Q. (2021). Impact of Pricing and Product Information on Consumer Buying Behavior with Customer Satisfaction in a Mediating Role. Frontiers in Psychology, 12, 720151.