i Drivers of customer switching behaviour in streaming video on demand (SVOD) services in South Africa Matthew Muizenheimer 0708404E Supervisor: Dr Thembekile Mayayise A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in the field of Digital Business Johannesburg, 2023 ii ABSTRACT The evolution of technology has disrupted traditional ways of consuming audio and visual entertainment. Streaming video on demand services (SVOD) have replaced brick-and-mortar- based video rental services and have become more accessible financially and geographically on a global scale. This has resulted in a competitive SVOD market where these platforms need to continually improve their service offerings in order to retain and grow their user base. Thus, the aim of this study was to explore the drivers of streaming video-on-demand services in South Africa. Data was collected through a qualitative approach by using semi-structured interviews. Fifteen interviews were successfully conducted, all of which focused on SVOD users within South Africa. This study found that consumers, above all else, value variety, the size of the catalogue, and exclusivity of content when deciding which SVOD service to subscribe to. However, the value placed on content was considered in conjunction with other important factors such as subscription cost, SVOD user interface, the strength of the recommender system, and the general popularity of the content being offered on the SVOD platform. This study builds on the literature of SVOD switching behaviour in South Africa and provides insight to SVOD companies on their strategic approach to gaining and retaining market share within the competitive environment. iii KEY WORDS Streaming Video On Demand (SVOD), Informational Influences, Attractiveness of Alternatives, Switching Costs iv DECLARATION I, ____Matthew_____, declare that this research report is my own work except as indicated in the references and acknowledgements. It is submitted in partial fulfilment of the requirements for the degree of Master of Management in the field of Digital Business at the University of the Witwatersrand, Johannesburg. It has not been submitted before for any degree or examination in this or any other university. Name: Matthew Henry Muizenheimer Signature: Signed at …………………………………………………… On the …………………………….. day of ………………………… 20….. v ACKNOWLEDGEMENTS I would like to express my gratitude to my supervisor, Dr. Thembekile Mayayise, for her invaluable feedback and patience. Thanks should also go to all the staff who assisted me at the Faculty of Commerce, Law, and Management, University of the Witwatersrand. Additionally, this report would not have been possible without the participants who made themselves available for the interviewing process. Lastly, I am grateful to my family for their support during this journey. vi Table of Contents ABSTRACT ........................................................................................................................ii KEY WORDS ..................................................................................................................... iii DECLARATION.................................................................................................................. iv ACKNOWLEDGEMENTS ..................................................................................................... v LIST OF TABLES .......................................................................................................... ix LIST OF FIGURES ......................................................................................................... x LIST OF ACRONYMS .................................................................................................... xi Chapter 1. Introduction ....................................................................................................1 1.1 Context of the study .................................................................................................... 1 1.2 Research problem ....................................................................................................... 2 1.3 Research questions ..................................................................................................... 3 1.4 Significance of the study ............................................................................................. 4 1.5 Delimitations of the study ........................................................................................... 5 1.6 Definitions of terms ..................................................................................................... 5 1.7 Assumptions ............................................................................................................... 6 1.8 Chapter 2 and 3 outline .............................................................................................. 6 Chapter 2. Literature Review ............................................................................................7 2.1 Introduction................................................................................................................ 7 2.2 Background discussion ............................................................................................... 7 2.4 External sources of influences that consumers consider before switching to other services ................................................................................................................................. 17 2.5 Interpersonal sources of influence consumers consider before switching to other services ................................................................................................................................. 17 2.6 Experiential sources of influence consumers consider before switching to other services ................................................................................................................................. 18 2.7 Switching costs consumers consider before switching to other services ..................... 19 2.8 Qualities of attractiveness of alternatives consumers consider before switching to other services ........................................................................................................................ 20 2.9 Analytical framework ............................................................................................... 22 2.10 Conclusion of literature review ................................................................................. 26 Chapter 3. Research Methodology .................................................................................. 28 3.1 Research approach ................................................................................................... 28 3.2 Research design ........................................................................................................ 29 3.3 Data collection methods ............................................................................................ 29 3.4 Population and sample .............................................................................................. 30 vii 3.5 The research instrument ........................................................................................... 31 3.6 Procedure for data collection .................................................................................... 32 3.7 Data analysis and interpretation ............................................................................... 32 3.8 Limitations of the study ............................................................................................ 33 3.9 Transferability and dependability............................................................................. 33 3.10 Demographic of respondents..................................................................................... 35 3.11 Ethical considerations ............................................................................................... 35 Chapter 4. Presentation of findings ................................................................................. 37 4.1 Introduction.............................................................................................................. 37 4.2 Findings for proposition 1: External sources of information encourage SVOD customers to switch ............................................................................................................... 39 4.3 Findings for proposition 2: Interpersonal sources of information encourage SVOD customers to switch ............................................................................................................... 41 4.4 Findings for proposition 3: Experiential sources of information encourage SVOD customers to switch ............................................................................................................... 43 4.5 Findings for proposition 4: Low switching costs encourages SVOD customers to switch 45 4.6 Findings for proposition 5: Strong attractiveness of alternatives encourage SVOD customers to switch ............................................................................................................... 46 4.7 Summary of the findings ........................................................................................... 47 Chapter 5. Discussion of the findings .............................................................................. 49 5.1 Introduction.......................................................................................................... 49 5.2 Discussion for proposition 1: External sources of information encourage SVOD customers to switch ............................................................................................................... 49 5.3 Discussion for proposition 2: Interpersonal sources of information encourage SVOD customers to switch .................................................................................................... 50 5.4 Discussion for proposition 3: Experiential sources of information encourage SVOD customers to switch ............................................................................................................... 51 5.5 Discussion for proposition 4: Low switching costs encourages SVOD customers to switch 52 5.6 Discussion for proposition 5: Strong attractiveness of alternatives encourage SVOD customers to switch ............................................................................................................... 53 5.7 Conclusion ............................................................................................................ 54 Chapter 6. Conclusions and recommendations ................................................................ 55 6.1 Introduction.......................................................................................................... 55 6.2 Conclusions for research question 1: Which external sources of influence do SVOD consumers consider before switching to other services, and why? ......................................... 55 6.3 Conclusions for research question 2: Which interpersonal sources of influence do SVOD consumers consider before switching to other services, and why? ............................. 56 viii 6.4 Conclusions for research question 3: Which experiential sources of influence do SVOD consumers consider before switching to other services, and why? ............................. 56 6.5 Conclusions for research question 4: Which switching costs do SVOD consumers consider before switching to other services, and why? .......................................................... 57 6.6 Conclusions for research question 5: Which qualities of attractiveness of alternatives do SVOD consumers consider before switching to other services, and why?...... 58 6.7 Final conclusion .................................................................................................... 58 6.8 Recommendations ................................................................................................. 59 6.9 Suggestions for further research ........................................................................... 60 Table 2. Consistency table: research questions, propositions, data collection and data analysis .......................................................................................................................... 62 References...................................................................................................................... 64 Appendix A: Consent form ............................................................................................. 70 Appendix B: Interview protocol...................................................................................... 72 Appendix C: Full sample Interview transcript: Participant 2 .......................................... 76 Appendix D: Full sample Interview transcript: participant 4 .......................................... 90 Appendix E: Full sample Interview transcript: participant 10 ....................................... 107 Appendix F: Full sample Interview transcript: participant 13 ....................................... 122 ix LIST OF TABLES Table 1: Summarised Consistency table: research questions and propositions..................... 21 Table 2: Consistency table: research questions, propositions, data collection and data analysis ......................................................................................................................................... 34 x LIST OF FIGURES Figure 1: The conceptual model (Wang, 2010) .............................................................. 12 Figure 2: A cognitive dissonance e-service switch framework ...................................... 13 Figure 3: The conceptual model ..................................................................................... 25 Figure 4: Cumulative years subscribed for each SVOD ................................................. 30 Figure 5: Cumulative amount of current subscribers ...................................................... 31 Figure 6: External sources of information ...................................................................... 32 Figure 7: Interpersonal sources of information ............................................................... 33 Figure 8: Experiential sources of information ................................................................ 34 Figure 9: Switching costs ................................................................................................ 35 Figure 10: Attractiveness of alternatives ........................................................................ 36 xi LIST OF ACRONYMS • SVOD: Streaming video on demand • 4G: Fourth-generation wireless • LTE: Long term evolution • DVD: Digital video disc • VHS: Video home system • TV: Television 1 Chapter 1. Introduction 1.1 Context of the study The rise of video streaming services is evident in developed and developing markets around the world with a global market valuation of $59.1 billion in 2021 (Grand View Research, 2022). The market for streaming video on demand (SVOD) services has a compound annual growth rate of 21% and the market is expected to be worth $224 Billion by 2028 (Grand View Research, 2022). SVOD is a service that provides a wide range of varying video and audio content, some of which include TV series, films and documentaries that are accessed by use of an internet connection (Mirabito & Morgenstern, 2012). The key players at the forefront of the SVOD industry are Netflix, Amazon Prime Video, YouTube and Disney+ to name a few (Wood, 2021). Within the context of Africa, Digital TV Research (2021) forecasts that the current number of subscribers will triple, growing from an estimated 5.11 million at the end of 2021 to 15.06 million at the end of 2026 (Digital TV Research, 2021). Among these African countries, South Africa and Nigeria are set to contribute the highest number of paying subscribers with an estimated 2.3 million each. This will make them the only African countries having more than 1 million subscribers (Digital TV Research, 2021). The African SVOD market is dominated by Netflix with a 51% market share however this is projected to fall to 39% by the end of 2026 (Digital TV Research, 2021). This was made apparent in Netflix’s quarterly earnings update, released on the April 19, 2022, as the report projected that subscriber numbers would drop by another two million in the current quarter, having already fallen by about two hundred thousand in the previous three months (Clarfelt, 2022). 2 The rapid adoption of video streaming content has been driven in part by the escalating demand for high-speed internet around the world alongside growing demand for devices that can support digital media (Wood, 2021). 4G/LTE coverage increased significantly from 53% in 2015 to 96.4% in 2020. In addition to the increased accessibility to fast, mobile internet, the growing smartphone demand has also more than doubled to 91.2% over the four-year period from 2016 to 2019 (Taylor, 2021). Africa also has the world’s youngest, fastest-growing, and increasingly urbanized workforce (International Finance Corporation, 2020). These demographics coupled with an increase in disposable income as well as higher education levels, have led to a greater consumption of online services (International Finance Corporation, 2020). The growth of SVOD services within the South African context has led to Netflix planning an investment of R900 million by partnering with local production houses (Leteba, 2022). This magnitude of interest will most likely encourage further investment and strategic development by other SVOD service providers in South Africa in order to retain and grow their market share. 1.2 Research problem According to Palomba (2022), the success of the SVOD business model is predicated on growing the subscriber base as well as limiting the amount of subscription cancellations from current subscribers, as SVOD service providers do not typically rely on advertisements as a source of revenue (Palomba, 2022). Significant efforts and resources focusing on brand and business strategy are allocated to retention of customers in order to sustain profitability and competitive advantage. Netflix and 3 Showmax, operating with the largest market share in Africa with an estimated 2.6 million subscribers respectively by the end of 2021 and 861 thousand users (Kamer, 2022), are both month-to-month subscription services thus, their biggest challenges can be solved with a greater understanding behind customer switching behaviour. Netflix for example, retains only two-thirds of the company’s monthly-paying customers 12 months after first signing up (Rieck, 2019). Allocation of these resources needs to be strategically aligned with addressing the root causes behind customer switching behaviour so as to maximise the efficient allocation of resources. The South African market is unique to that of other markets and understanding the switching behaviours behind these consumers in particular would lead to insights that could prove useful to SVOD companies in their efforts to prevent service switching. Consumers of SVOD services within South Africa may also have more than one subscription at any one time which would mean that they have made a decision to include some SVOD services and exclude others. This would mean exploring switching behaviour within this context will uncover what drives subscribers to keep the SVOD services that they have, as opposed to subscribing to one and not the other. 1.3 Research questions The main research question in the context of this study would be: What are the factors that influence SVOD consumers to switch service providers in South Africa? Thus, the subsequent sub-questions which form the foundation to answering this main question would be: 4 i. Which external sources of influence do SVOD consumers consider before switching to other services, and why? ii. Which interpersonal sources of influence do SVOD consumers consider before switching to other services, and why? iii. Which experiential sources of influence do SVOD consumers consider before switching to other services, and why? iv. Which switching costs do SVOD consumers consider before switching to other services, and why? v. Which qualities of attractiveness of alternatives do SVOD consumers consider before switching to other services, and why? 1.4 Significance of the study Despite the increase in the availability and accessibility of SVOD services within South Africa since 2012 as well as the literature review conducted between 2012 and 2022 within relevant databases Sage Premier Journal Collection, Communication & Mass Media complete as well as ProQuest Central, there is no evidence of any research that looked at the contributing factors of switching behaviours in SVOD in South Africa. Furthermore, the reasoning behind why some SVOD services are subscribed to and others are not introduces the importance of research from the subscriber’s perspective within the context of switching behaviour. Research into the feasibility for SVOD companies to address these concerns also needs to be considered which will require a greater understanding of consumer switching behaviour which this research will help address. 5 From a theoretical perspective, the move away from traditional consumption of video entertainment as well as greater accessibility to high-speed internet has created a space for researchers to explore the decision making process of consumers navigating the market for SVOD services. This would include developing the understanding behind switching behaviours from one service to another. Therefore, this research will contribute to the understanding of SVOD consumer behaviour in response to various influences within the unique context of South Africa. 1.5 Delimitations of the study i) Only paid SVOD services will be considered. ii) Only SVOD services available in South Africa will be considered. 1.6 Definitions of terms i) Consumer Switching: The migration of customers from one supplier to another (Niels Hermes et al., 2012). ii) SVOD: Streaming video on demand iii) 4G: Fourth-generation wireless iv) LTE: Long term evolution v) DVD: Digital video disc vi) VHS: Video home system vii) TV: Television 6 1.7 Assumptions i) Respondents will reflect normal perspectives and experiences and will provide an honest, subjective account. ii) Respondents have subscribed to or paid for an SVOD service before. 1.8 Chapter 2 and 3 outline The following two chapters of this research report will delve into literature review and research methodology, respectively. 7 Chapter 2. Literature Review 2.1 Introduction This chapter of the research addresses the literature review conducted around customer switching behaviour in the context of online services. Within this phenomenon there has been research conducted on various relationships of factors which influence customer switching behaviour. Based on the reviewed literature, the factors which were found to influence customer switching behaviour include trust, e-loyalty, perceived value and benefits, corporate image, switching costs, attractiveness of alternatives, customer satisfaction, informational influence (External/Interpersonal/Experiential) and purchase decision involvement. 2.2 Background discussion The emergence of digital technologies and the manner in which video entertainment is consumed has changed with companies like Netflix taking advantage of the movement. According to Investor’s Business Daily (2010), the move away from traditional video rental of physical DVDs and VHS has caused companies like Blockbuster to file for bankruptcy protection resulting in the closure of 800 stores. While growth within the United States for Netflix services has slowed down from 26% in 2012 to 10% in 2017, growth within the international streaming segment has seen steady growth of above 40% (Oliveira & Ribeiro, 2019). One of the sources for this growth has been evident through growing markets namely, Africa and the Middle East which had a projected growth of 10.9% until 2020 (Oliveira & Ribeiro, 2019). Furthermore, Africa, while being the least 8 internet connected continent, had a penetration rate of internet usage which tripled between 2008 and 2014 (Penard et al., 2015). Thus the growth and increased accessibility of broadband internet has also been a contributing factor, increasing the adoption of online services such as SVOD. The South African market, in comparison with the rest of Africa, is a very mature and developed one in relation to SVOD services. Nearly 1 in 2 South African households are subscribed to a SVOD service (Telecoming, 2021). Outside of Africa these statistics still prove competitive with the world average being below 30% of households (Telecoming, 2021). In 2021, South Africa had a market of $ 353 million, with users spending nearly $ 107M per annum in SVOD subscriptions (Telecoming, 2021). In 2025 it is projected, with current growth rates of 9% per annum, South Africa is projected to have almost 5 million active SVOD subscriptions (Telecoming, 2021). The South African market for SVOD services is not only mature and developed but also competitive, thus it will serve SVOD service providers to delve into consumer switching behaviour and the various phenomena that impact it, as it would illuminate areas of concern which these SVOD companies could use as inputs into their strategies to remain competitive in a growing market. The remainder of chapter 2 will comprise the exploration of literature addressing the factors that influence customer switching behaviour for online services followed by a conclusion on the reviewed literature. 2.3 Factors that influence customer switching behaviour 2.3.1 E-loyalty 9 Carter et al. (2014) defines trust as the inclination of a subject to be open to receive the responses of another subject based on the expectation that the other will provide a response that is important to the trustor. This response would not be able to be controlled. This definition emphasises the degree to which expectation of a certain level of performance can be relied upon without having control on the another parties ability to deliver. Milan et al. (2015) defined trust succinctly through a unidimensional approach in that trust is the action of looking for the fulfilment of performed promises within the context of the specific needs of customers. Furthermore, Milan et al. (2015) postulates that trust as a behavioural variable is a vital ingredient into service providers’ customer retention strategies as it concerns the likelihood of these customers keeping and developing relationships with the same service provider. Within the context of online services, the lack of personal interaction when engaging with service providers emphasises the need for trust in order for relationships to be formed equitably for all parties. Thus, the evolution of e-trust in the context of online services where e-trust is seen as trustworthiness perception regarding the different actors in e-commerce (Pennanen, 2011). Through the creation of positive perceptions, online service companies develop persuasive trusting beliefs which is an ingredient in customer decision making processes within the e- commerce environment which develops as an ingredient into e-loyalty (Carter et al., 2014). From this, the antithesis can be derived as well, in that a lack of trusting beliefs could result in 10 consumers displaying behaviours characterised by switching, more specifically, switching from one online service provider to another. 2.3.2 E-loyalty Consumer loyalty is the repeated purchase behaviour presented over a period of time encouraged by a positive attitude toward the service provider or business (Jin et al., 2008). This definition considers attitudinal and behavioural aspects, however, fails to address the nuanced environment that exists in the context of online service delivery. Within the context of online services, a more appropriate definition for this research is found in Carter et al. (2014) as they define e-loyalty as the understanding of online customers ties to merchants. Furthermore, Carter et al. (2014) defines e-loyalty, which is customer loyalty that is associated with an online environment, as a persistent psychological attraction by a customer to a particular online vendor or service provider. Carter et al. (2014) goes on to develop this definition of e-loyalty as a phenomena garnered through the means of developing customer trust as well as creating switching costs, which are the costs associated with customers replacing one service provider with another (Carter et al., 2014). 2.3.3 Perceived value and benefits A simplistic definition of perceived value is defined as the involvement of benefits and efforts of a relational exchange (Milan et al., 2015). Within the context of a technological product however, perceived value is seen as being comprised of functional, social, emotional, epistemic 11 and conditional values as presented in the Technology Acceptance Model developed by Fred Davis in 1989. Below is a summary of these values (Zolkepli et al., 2020): Functional value is defined as the benefit of the perceived customer satisfaction gained from the pragmatic quality of a product or service, whether a product can in fact perform its functions, by providing satisfaction to the customer, through physical or utilitarian means. Social value represents the perceived benefits of a social nature that are derived from the usage of the product. These social benefits from the consumers’ perspective are in part related to social image within the context of demographic profile, socio-economic status as well as their cultural group. Emotional value is the perceived state of emotion or feelings linked with the consumption of a product or service. Epistemic value refers to the act of curiosity, desire and novelty sought in the value of unique or unconventional products or services. This kind of perceived value is closely associated with users who present a high level of brand switching behaviour in that they are continually in the pursuit of experiencing new products and services. Conditional value refers to the change in buying preferences based on situations such as seasonal or lifetime events, or unplanned emergencies. Thus the perceived value of goods and services increase under these circumstances. 2.3.4 Corporate image Wang et al. (2010) describes corporate image as the overall impression made in the minds of the public about a firm. Corporate image comprises physical and behavioural attributes of the firm. Thus, a strong corporate image would positively affect customer satisfaction and loyalty. 12 The conceptual model developed by Wang et al. (2010) indicates that when switching costs are low, customer perceived value, service quality and corporate image become stronger effects which influence customer loyalty. Figure 1: The conceptual model (Wang, 2010) The value of corporate image as an antecedent in customer loyalty was also reinforced in the research conducted by Kaur & Soch (2018). The research found that corporate image was the most important determinant of attitudinal loyalty, especially in the context of the findings where the telecommunications sector being highlighted was characterised by low switching costs and non-differentiated products in the absence of reward or loyalty programs (Kaur & Soch, 2018). 2.3.5 Switching costs Switching costs come about through the expense of time and energy that may prevent customers from engaging in relationships as a result of evaluative efforts that are taken before a repeat purchase (or use) with the same supplier or service provider (Kaur & Soch, 2018). Kaur and Soch (2018) found that switching costs have been established as a mediator between 13 customer satisfaction and customer loyalty. Switching costs are also moderators in the relationship between satisfaction and loyalty as well as an antecedent of customer loyalty (Kaur & Soch, 2018). As this research pertains to the switching behaviour of online services, it is more appropriate to view switching costs as an antecedent of loyalty, more specifically, e- loyalty (which is the loyalty associated with internet based or online technologies), as it aligns with Carter et al. (2014) definition in the sense that higher switching costs increase e-loyalty. 2.3.6 Attractiveness of alternatives A basic understanding of attractiveness of alternatives is postulated by Liu et al. (2016) that consumers will be loyal to a service provider in the absence of suitable alternative service providers being available. Liu et al. (2016) continued to develop a research framework in the context of cognitive dissonance theory to further elaborate on this phenomena. Cognitive dissonance theory in this context results when consumers have to evaluate different service or product alternatives to make a purchase decision, as they have to settle on one choice out of the various options available. With this particular model illustrated in Figure 2, service quality, satisfaction and switching intention are all studied in relation to attractiveness of alternatives. Within the context of customer switching intention, it was established that a strong relationship exists based on the effect of attractiveness on the level of service and customer satisfaction consistent with the study confirming that positive feelings of alternate attractiveness will degrade positive perceptions of the existing e-service (Liu et al., 2016). In addition Liu et al. (2016) also established that deterioration of consumer perceptions of subscribed e-services may not be as a result of actual deterioration in service quality experienced but instead the enhanced attractiveness of competitors service offering. 14 Ghazali et al. (2016) has a very similar definition for attractiveness of alternatives as he defines the phenomena as the customers perceptions of the extent to which viable competing alternatives are available in the market. He does however include the additional notion that the alternative needs to be viable as it is an important consideration when comparing two services side by side. The consideration that the perceived lack of difference between two alternatives will also promote loyalty by a customer to their existing service (Ghazali et al., 2016). Ghazali et al. (2016) goes on to link attractiveness of alternatives directly with switching costs which is in line with this research, as opposed to switching intention as in Liu et al. (2016). 2.3.7 Customer satisfaction Customer satisfaction is defined by Gerpott et al. (2001) as an experience-based assessment made by customers which is based on the difference between their expectations and overall functionality of the services (or product performance) they received (Gerpott et al., 2001). Customer experience is thus measured against customer expectations. Customer experience was established as an antecedent of customer loyalty in this research, therefore if the post purchase experience is better than what was expected then the result would be a stronger loyalty by the customer to the service provider (Calvo-Porral & Lévy-Mangin, 2015). Srivastava & Sharma (2013) proposed a model where it is implied that relationships between customer satisfaction, repurchase intention and switching behaviour are all positively correlated. Customer satisfaction was described very similarly when comparing the research done by Srivastava & Sharma (2013) and Calvo-Porral & Lévy-Mangin (2015). However, for the purposes of this research (in the context of switching behaviour) the additional 15 consideration of customer satisfaction having a positive correlation with repurchase intention and ultimately switching behaviour elaborated in the research by Srivastava & Sharma (2013) as opposed to drawing the relationship between customer satisfaction and loyalty in Calvo- Porral & Lévy-Mangin (2015) would be more relevant. 2.3.8 Information influence Informational influence is described as a basic tenet in customer behaviour theory. Consumers use different sources of information to assist them to select amongst different options in order to maximise satisfaction and reduce post-purchase regret. Keaveney & Parthasarathy (2001) breaks down informational influence into 3 different sources: External sources of information is described as the investigation made by a consumer prior to purchase which involves all sources found in mass media, advertised information, and customer reviews from existing/prior customers. External sources of information can also be characterised as being impersonal. Consumers who seek out sources that are impersonal in nature are looking to gain factual information about the product or service attributes. Interpersonal sources of information include the word-of-mouth opinions of others. Consumers who lack the confidence to investigate product factual attributes or trust the value of customer reviews often rely on the help of people who they trust to provide insight into their experience given they have an personal account of the product or service in question. This is often the case in the context of services as opposed to products/goods as one customer’s experience of a service may differ to another. Customer expectations around these sources of information of a personal nature are vulnerable to disappointment if they do not match the actual experience of the customer who is influenced, thus resulting in switching behaviour or discontinuing usage. 16 Experiential sources comprise information that is derived from the consumer’s personal account, past memory of experiences or product-relevant knowledge. Keaveney & Parthasarathy (2001) hypothesizes, from research, that information derived from experiential sources are more likely to have a greater influence on customer behaviour than information from other sources of influence. 2.3.9 Purchase decision involvement Sang et al. (2018) defines purchase decision involvement as “a person’s perceived relevance of an object based on inherent needs, values and interests”. Thus, the degree to which an individual is involved in the purchasing decision could affect switching behaviour. Higher purchase decision involvement is associated with higher levels of risk (Sang et al., 2018). This would mean if a customer perceived the consequences of switching to be associated with low risk then their propensity to explore alternatives would be greater. Chan & Lin (2017) summarises the definition of customers involvement as the personal investment and effort, including time and money, based on personal needs, values and interests. This definition is less abstract than the one provided by Sang et al. (2018) in that it better describes the manner in which customers are involved, namely time and money. Sang et al. (2018) however continues to elaborate on his definition by the inclusion of a customer involvement profile which includes the dimensions: importance, risk and probability, symbolism, pleasure and interest. The combination of these definitions and explorations of customer involvement all lead to the conclusion that a customer’s level of involvement, whether it be time and/or money, based on their customer profile, impacts switching behaviour. 17 2.4 External sources of influences that consumers consider before switching to other services 2.4.1 External sources of influence External sources of influence or information are derived from consumers looking to gain factual information about a product or service’s attributes. (Keaveney & Parthasarathy, 2001). These are closely associated with sources characterised as being impersonal as they relate to brochures, flyers, advertisements, magazines, reviews, and ratings (Keaveney & Parthasarathy, 2001). For example, it is important to research whether customers are influenced by ratings of video content outside of the SVOD service they are subscribed to, which may stimulate switching behaviour. 2.4.2 Proposition 1 External sources of information encourage SVOD customers to switch. 2.5 Interpersonal sources of influence consumers consider before switching to other services 2.5.1 Interpersonal sources of influence Interpersonal sources of influence are word of mouth opinions of others. This is opposed to, from the customer’s perspective, relying on their own decision making process when choosing between competing service providers (Keaveney & Parthasarathy, 2001). In the event that a service experience is hard to research, then taking the advice of others, or insights into how others have experienced a service, will be the only other reliable source a consumer can make 18 before making a decision to purchase. In the context of SVOD services, users could find that they can better rely on their friends to guide them on whether certain content found on a platform would appeal to them or not, as opposed to relying on objective external sources of information. This relates closely to this research as it explores how interpersonal sources of information and relationships between consumers influence individual customer switching behaviour. 2.5.2 Proposition 2 Interpersonal sources of information encourage SVOD customers to switch. 2.6 Experiential sources of influence consumers consider before switching to other services 2.6.1 Experiential sources of influence Experiential sources of influence are sources that result from a consumer engaging in an internal examination of information through recollections from past experiences and product related knowledge (Keaveney & Parthasarathy, 2001). This is most applicable if the consumers in question have service relevant knowledge in memory, which include knowledge of how the service works and the likelihood that the service will satisfy his or her needs (Keaveney & Parthasarathy, 2001). Posing this question assists us to uncover whether the user is accustomed to the consumption of SVOD services in the event that they are potentially thinking about switching from one SVOD to another, or have prior experience having used a particular SVOD service and considering switching to it again. 2.6.2 Proposition 3: 19 Experiential sources of information encourage SVOD customers to switch. 2.7 Switching costs consumers consider before switching to other services 2.7.1 Switching costs: Carter et al. (2014) identifies 3 sources of switching costs namely financial, procedural and relational costs. Financial costs, are costs associated with the sum of all benefits and/or financial charges, or penalties, resulting from switching service providers. Procedural costs refer to costs which relate to the attention expended in order to switch. This includes searching and evaluating alternatives, gathering information about providers as well as the time and energy involved with adapting to using a different service provider (Carter et al., 2014). Relational costs refer to the costs associated with a bond or emotional attachment that a consumer has with a brand. This switching cost in the context of SVOD could be the ease of comfort associated with the customer’s familiarity with the service or the customer’s preference for a more popular brand as opposed to a lesser known brand of SVOD (Carter et al., 2014). The importance of this question lies in the exploration of how each one of the 3 costs affect customer switching behaviour. Within the context of SVOD services, we may find that a easy sign up process may encourage switching. Additionally, the degree to which a consumer is comfortable with learning a different user interface associated with another SVOD service may affect switching as well. 2.7.2 Proposition 4: Low switching costs encourages SVOD customers to switch. 20 2.8 Qualities of attractiveness of alternatives consumers consider before switching to other services 2.8.1 Attractiveness of alternatives: Liu et al. (2016) states that the intention to either continue or switch service providers is a function of the attractiveness of the existing service versus that of alternatives. Within the context of SVOD services, there exists various alternate options which at times offer appealing free trial periods for customers to try before they engage in a paid subscription option. This could potentially improve the attractiveness of the SVOD service thus stimulate switching. This question uncovers the qualities SVOD consumers are influenced by the most that trigger switching behaviour. 2.8.2 Proposition 5: Strong attractiveness of alternatives encourage SVOD customers to switch. Table 1. Summarised Consistency table: research questions and propositions RQ # Research Question Proposition # State Proposition 1 Which external sources of influence do SVOD consumers consider before P1 External sources of information encourage SVOD customers to switch 21 RQ # Research Question Proposition # State Proposition switching to other services, and why? 2 Which interpersonal sources of influence do SVOD consumers consider before switching to other services, and why? P2 Interpersonal sources of information encourage SVOD customers to switch 3 Which experiential sources of influence do SVOD consumers consider before switching to other services, and why? P3 Experiential sources of information encourage SVOD customers to switch 4 Which switching costs do SVOD consumers consider before switching to other services, and why? P4 Low switching costs encourages SVOD customers to switch 5 Which qualities of attractiveness of alternatives do SVOD consumers consider P5 Strong attractiveness of alternatives encourage SVOD customers to switch 22 RQ # Research Question Proposition # State Proposition before switching to other services, and why? 2.9 Analytical framework The analytical framework is an integration between theoretical and conceptual concepts. This section discusses the literature that this research is underpinned by and how it informed the development of the conceptual framework which will guide the rest of this research. 2.9.1 Theoretical framework The theoretical framework that this study is underpinned by is Liu et al. (2016) cognitive dissonance e-service switching framework illustrated in figure 2 taken from his research “Modelling consumer behaviour in social network games by exploring consumer dissonance and change experience”. This model was selected as it forms the basis for exploring the rationale behind a customer having to choose one service over another. Even though Liu et al. (2016) used this framework to guide his research into social network games and how the influence of alternate attractiveness could be modeled, he intentionally makes his study applicable to the broader e-service industry as well. This creates room for this study to be relevant in this research as SVOD falls under a service that is provided electronically, i.e. an e- service. Liu et al. (2016) approached the research quantitatively as the study sent out 220 000 questionaires to its targeted subjects. Even though this research is qualitative, the use of Liu et 23 al. (2016) was selected as it has formed a strong foundation in relation to which additional research in different contexts could be explored. Thus, the use of the model in this research. Liu et al. (2016) research framework is adapted to accommodate specific research into SVOD as customers could easily be subscribers to more than one SVOD service at any one time. Thus, the exploration would be more along the lines of which bouquet of SVOD services has a customer chosen and why, as opposed to which singular service was chosen. Therefore the proposed conceptual framework represented in figure 3 retains the independent factors that Liu et al. (2016) considers namely, alternative attractiveness and includes two other independent factors, namely information sources of influence as well as switching costs. 2.9.1.1 Informational sources of influence The study conducted by Keaveney & Parthasarathy (2001) considered three sources of informational phenomena and their respective relationships on customers switching from one service to another, as well as continuing with a specific service. These three informational phenomena are external informational influence, interpersonal informational influence as well as experiential informational influence (Keaveney & Parthasarathy, 2001). The study concluded the below findings: • Customers who continue with the service of their current provider were more likely than customers who switch to use external and experiential information sources. • Customers who continue with the service of their current provider were less likely than customers who switch to use interpersonal sources of information as their source. 24 • Higher service switching was associated with lower use of external and impersonal sources of information when deciding which service provider to choose from. • Reduced reliance on experiential sources is correlated with increased service provider switching. 2.9.1.2 Switching costs The research conducted by Carter et al. (2014) concerns the relationships that both switching costs and trust have with e-loyalty (which is customer loyalty within the context of online services). Adapting the findings to this study, the higher the level of e-loyalty, the lower the propensity of the customers switch. The study found that (Carter et al., 2014): • Both service switching costs and trust improve e-loyalty, although they do not improve e-loyalty equally within the context of e-services providers. • In the absence of trust, the study found that switching costs positively affect customers repurchase intentions. Although, if trust is present then switching costs have a harmful effect on loyalty. Thus, only a slight use of switching costs in the context of high trust would be effective. • Developing trust is a more effective approach to developing long-term relationships and thus improving e-loyalty. • Switching costs associated with using customers’ preferences, effective satisfaction of their needs, and high service quality could all contribute toward effective customer retention strategies. 25 2.9.1.3 Attractiveness of alternatives Essentially, the availability of viable and competitive alternatives is an important prerequisite for consumers to be able to switch service providers (Liu et al., 2016). The study conducted by Liu et al. (2016) looks into the degree to which attractiveness of alternatives has on switching intention and thus switching behaviour. Although the study is done within the context of social network games, the findings can be applied to e-services as well. The findings include: • Positive feelings of alternative attractiveness will decrease consumers’ positive perceptions of their current provider of service. • A breakdown in the consumer perceptions of an e-service may not necessarily be derived from an actual breakdown in the service quality of the provider. Instead, it may be as a result of enhanced attractiveness of the competitors’ products or services. • A significant proportional relationship was found between the degree of alternative attractiveness and the extent of customer switching behaviour. • Figure 2: A cognitive dissonance e-service switch framework (Liu et al., 2016) 2.9.2 Conceptual framework 26 Figure 3: Conceptual framework (Liu et al., 2016; Carter et al. 2014; Keaveney & Parthasarathy, 2001) Figure 3 illustrates the conceptual framework that will be used as a lighthouse for this research as it is underpinned by the conclusions drawn from the studies conducted by Liu et al., (2016); Carter et al. (2014) & Keaveney & Parthasarathy (2001). The assumption derived from this illustration is that informational sources (external, interpersonal and experiential), switching costs and attractiveness have an impact on switching behaviour. Thus, this research is designed to explore these relationships from a qualitative perspective. 2.10 Conclusion of literature review 27 The further understanding of Information sources of influence, switching costs and attractiveness of alternatives is important as these are elements which add to the understanding of customer behaviour within the context of SVOD services in South Africa. A summary of the resultant propositions are found below: 2.10.1 Proposition 1: External sources of information encourage SVOD customers to switch 2.10.2 Proposition 2: Interpersonal sources of information encourage SVOD customers to switch 2.10.3 Proposition 3: Experiential sources of information encourage SVOD customers to switch 2.10.4 Proposition 4: Low switching costs encourages SVOD customers to switch 2.10.5 Proposition 5: Attractiveness of alternatives encourage SVOD customers to switch 28 Chapter 3. Research Methodology The holistic intention behind this research is to take specific observations from the interview data, explore and recognise general similarities in behaviours and close with a general conclusion. More specifically this chapter will discuss research approach, research design, data collection methods, population and sample, procedure for data collection, data analysis and interpretation, limitations of the study, transferability and dependability, demographic profile of respondents and ethical considerations. 3.1 Research approach The goal of this research is not to “discover universal, context and value free knowledge and truth” (Rehman & Alharthi, 2016) but to attempt to understand the interpretations of individuals about the social phenomena they engage with. Thus, an interpretivism research paradigm approach is adopted. Interpretive research employs the use of qualitative data which in some cases relies on numerical data, however, is never based or relied upon. Aside from being aligned with the generic qualitative approach, the benefits of an interpretivism approach would be that it generates a better understanding of how people perceive and rationalise their world and their experiences (Kahlke, 2014). This would mean that the exploration of customer switching behaviour through a qualitative and interpretive approach would generate a better understanding into how consumers create meaning behind switching from one SVOD to another within the unique environment of South Africa. Therefore in line with this understanding this research has taken a qualitative approach. 29 In light of the limited amount of time provided to conduct this research, a cross-sectional study was selected. This would mean that subjects in the research were selected at one point in time as opposed to subjects being interviewed repeatedly over time. Data collected as a result of interviewing these subjects will also be primary as it is a personal account of an individual at the source of their experience. Based on the literature reviewed between 2012 and 2022 within relevant databases Sage Premier Journal Collection, Communication & Mass Media complete as well as ProQuest Central, it is observed that there is little to no research conducted on customer switching behaviour in the SVOD within South Africa. Thus, in conclusion this research took the interpretive and inductive approach, that is qualitative and exploratory in nature. This research approach and design has facilitated the exploration of data around the research questions posed. 3.2 Research design The design of this research has taken the exploratory method using a generic qualitative approach. The reason why this approach fits this research is because there exists limited theory into understanding social phenomena around consumer switching behaviour within the context of SVOD in South Africa. Therefore, delving into the consumers decision making process through the interviewing process has uncovered the basis for these understandings. 3.3 Data collection methods 30 A semi-structured interview approach has been selected as it is often used in the context of qualitative research. Research that yields qualitative results is conducted using various methods of interviewing approaches which include semi structured interviews (Rehman & Alharthi, 2016). This approach helps guide the interviewer and the data collected by the study. The main advantage of the selected approach is that it enables reciprocity between the interviewer and participant, enabling the interviewer to improvise through the use of follow-up questions based on participants responses which allows for individuals to express verbally (Kallio et al., 2016). In line with the research questions set out, answering the “how” and the “why” surrounding consumer behaviour is best explored using this method of data collection. 3.4 Population and sample 3.4.1 Population In order to conduct the research within the context of South Africa; South Africans have been selected as the population. This population is limited to South Africans over the age of 18 who have influence over the subscription, subscribed or currently subscribe to SVOD services available in South Africa. Furthermore, the population is familiar with the various SVOD services available in South Africa and has experienced one or more of them as a customer of their services. Thus, qualifying questions were posed to ensure that each subject of the interview was from the defined population and therefore included in the sample selection. 3.4.2 Sample and sampling method A sample is a subset of a population and we survey the units of the sample with the objective of gaining an understanding of the population as a whole (Vehovar et al., 2016). Due to the 31 time and resource constraints associated with this research a non-probability sampling approach has been selected. This means that subjects of the population do not get an equal opportunity to be represented by a sample. Within the various subtypes associated with non- probability sampling method, this research used the snowball sampling method. Snowball sampling, or network sampling, is a sampling method whereby select initial subjects form the basis of the interviewing process and from that point additional subjects are added from the network referred to by these initial subjects (Vehovar et al., 2016). Due to the successful proliferation of SVOD services in middleclass South Africa, it should not prove difficult in finding a qualifying sample. However, due to the convenience associated with interviewing individuals who have been referred as opposed to calling out individuals at random, the snowball sampling method has been most beneficial. The primary data collection method has been conducted through semi-structured interviews of 15 participants. According to Maxwell (2008), a typical qualitative researcher would study a small number of individuals with the intention of preserving the unique data that is collected which is why 15 interviews were conducted as opposed to a larger number. In order to identify sample interviewees, the researcher has first approached volunteers on social media and from that point onward, referrals from these initial subjects for additional interviewees has been approached. Sample members will be contacted via email, telephonic or social networking site means. 3.5 The research instrument The instrument to be used as a means of collecting data is through a semi-structured interview method. As the purpose of this research is to allow the subjects to respond to each question 32 posed in a detailed manner, a semi-structured approach was used. This has allowed each of the research questions to be addressed with the inclusion of providing the subjects to expound on any topics related to the question as they feel relevant. Thus, each question compiled into the interview guide has sought to address each one of the research questions respectively. The detailed interview guide is found under Appendix B. 3.6 Procedure for data collection The research begun by collecting primary data from the interviews conducted. Interviews were conducted either in person, or through electronic means such as telephone, or video call. As the medium of data collection needs to provide space for the interviewees to feel comfortable to address the questions freely without pre-meditation, any form of written feedback, either email or letter was avoided. 3.7 Data analysis and interpretation The data collected was analysed and interpreted by use of thematic analysis. Thematic analysis is where the data is characterised by topic or domain summaries (or content codes) that capture how often ideas, concepts and meanings are expressed by participants, often at a more explicit level (Ayre & McCaffery, 2022). Apart from being a common method of interview or transcript analysis associated with qualitative studies, this form of data analysis is selected as it facilitates the collection of subjects’ values, knowledge, opinions, experiences or views. 33 3.8 Limitations of the study • The researcher is aware of potential bias associated with non-probability sampling as it may be unrepresentative of the whole population which may affect the accuracy of the research (Saunders et al., 2003). • The population was limited to South Africa thus findings on customer switching behaviour will not be accurate in populations outside of this geographical context. • The subjects of the interview may be affected by social norms and consumer marketing such that their opinions, perceptions or attitudes may not be an accurate representation of their true behaviour. 3.9 Transferability and dependability From the perspective of data analysis and interpretation, the goal of this qualitative research is to present research characterised by a high level of trustworthiness. Thus, the objective of this research is to achieve transferability, credibility, dependability and confirmability as per respective criterion of a trustworthy interviewing process (Morse, 2015). 3.9.1 Transferability Being qualitative in nature, this research would lack in generalisability. However, the qualitative technique of providing a thick, rich description would assist the reader in having a better idea into the setting and context of the participants environment. This would be done by 34 providing the reader the setting, details of the participants and the themes of the qualitative study (Creswell & Miller, 2000). 3.9.2 Credibility In order to provide credible research, Saunders et al. (2003) describes a list of steps which need to be followed. These steps are namely having the appropriate degree of knowledge by studying and conducting literature review, providing the appropriate level of information to an interviewee before and during the interview such that he or she understands the context and intention behind each question, selecting an environment for the interview void of noise and distraction and adopting an approach to questioning which avoids jargon to mitigate any confusion or misunderstanding. 3.9.3 Dependability As this research is conducted in a cross-sectional approach, whereby data is gathered from subjects at a point in time, it is not intended to be repeatable. Rather, it is research that is meant to explore complex consumer behaviours on a topic at a specific point in time. In this research, it is the customer switching behaviour within the SVOD space. In addition, the triangulation technique will be used to create dependability. This will be done through the systematic process of going through and ordering the data to find common themes, ideas or categories (Creswell & Miller, 2000). 3.9.4 Confirmability 35 This study will use the member checking approach to confirm whether the data collected as a result of the interview is accurate. More specifically, the researcher has presented the data and interpretations to the subjects interviewed so that they can confirm the correctness of the information and understanding of the narrative as received by the interviewer (Creswell & Miller, 2000). This would mitigate any researcher bias that may find itself into the data. 3.10 Demographic of respondents The demographic of the respondents is not of particular importance however an even split of 50% male and 50% female was preferrable so as to include all views that may be represented as a result of differing gender. Participants will also be based in the province of Gauteng, South Africa. 3.11 Ethical considerations In order to uphold ethical considerations during the research, all interviewees were anonymous throughout the process and upon presentation of results had a number allocated to their interview data. In addition to this, all interviewees have signed a consent form which outlined the purpose of this research. A copy of this consent form and the transcription has been sent to each interviewee for their records. Thematic analysis has been conducted by the use of software, Atlas.ti, in order to mitigate any bias when establishing relevant codes in the interview transcripts. The process of obtaining an ethics protocol number required the researcher to submit an ethics application form to the Witwatersrand Business School Ethics Committee upon which it was approved. The Witwatersrand Business School Ethics Committee subsequently provided an ethics protocol number WBS/DB0708404E/397. 36 37 Chapter 4. Presentation of findings 4.1 Introduction This chapter will present and describe the findings as a result of the interviews conducted. A total of 15 interviews were conducted with all of them having been successful in addressing each research question this research has undertaken to answer. The findings of each proposition 1 to 5 described in this research will be summarized by use of bar graphs. Each bar graph being presented will have a respective description associated. A background of SVOD usage was conducted before each interview began with the intention of understanding how experienced each interviewee was within this context. The below findings were discovered: Figure 4: Cumulative years subscribed for each SVOD 0 2 4 6 8 1012141618202224262830323436384042444648505254565860 Netflix Showmax Disney Plus DSTV Now Youtube Premium Hulu Amazon Prime Apple TV Cumlative years subscribed SV O D 38 Figure 4 illustrates the cumulative number of years between 2016 and 2022 that each interviewee had been a subscriber of each respective SVOD. The intention behind gathering this information was to highlight which SVOD has had the most history of subscribers within the South African market. We can conclude from this bar graph that interviewees had the most experience with Netflix, Showmax and Amazon prime, with Netflix being the dominant SVOD in use. Figure 5: Cumulative amount of current subscribers In addition to the collection of cumulative years subscribed, the number of current subscribers for each SVOD was collected as represented by Figure 5. This data was to indicate which SVOD services were most subscribed to at the date and time the interview was conducted. Thus, even though Amazon Prime was top 3 in cumulative subscribed years, Figure 5 illustrates that Disney Plus is currently more subscribed to than Amazon Prime. From this understanding we can deduce that Disney Plus has become more popular than Amazon Prime at the time of the interview. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Netflix Showmax Disney Plus DSTV Now Youtube Premium Hulu Amazon Prime Apple TV Amount of current subscribers SV O D 39 The demographics of each participant does not bear any consequence in this study. Thus, it was not included in this chapter. The rest of this chapter will show the findings of each proposition, and end with a collective conclusion on the findings. 4.2 Findings for proposition 1: External sources of information encourage SVOD customers to switch This proposition dealt with external sources of information as an influence on customer switching behavior. From Figure 6 we can see exclusive content and the size of the SVODs catalogue being highly influential in customers adopting or switching from one SVOD to another. Figure 6: External sources of information 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Good reviews Good Ratings Appealing trailers Large catalogue of content Positive promotions / publicity Ability to stream on multiple devices Exclusive Content Good resolution Number of interviewees Fe e d b ac k 40 Exclusive content and a large content catalogue were highlighted by these participants respectively: Exclusive content: Participant 1 referred to how exclusive content would influence their switching behavior: “specific shows that were available, or only on a specific streaming service was the draw card” Participant 12: “Netflix is a bit like, you know, the Marvel content on Netflix is like, it's minimal, but the full catalog is on Disney Plus, so that would probably be the only thing that would make me switch” Participant 15: “Martin Scorsese's film was released on Netflix, it wasn't released in cinema, the Irishman and I know that Netflix is pumping out original series” Large content: Participant 14: “Netflix is just like a go to not necessarily the better, but definitely like just has a lot more options” Participant 4: “Netflix service because never first and I've got an extensive catalogue that works for the household” Participant 6: “But I usually I actually use Netflix way more than I use Showmax just because of the limitations of what's available. And I suppose what I'm interested in” 41 In addition, trailers promoting the content as well as the resolution of the video was found to be least influential. 4.3 Findings for proposition 2: Interpersonal sources of information encourage SVOD customers to switch Figure 7 explores the influence of interpersonal sources of information as a factor when customers decide on switching between SVODs. Recommendations of content by family and friends ranked the most influential. This is specifically when family or friends recommend SVOD content that does not exist within the interviewee’s current bouquet of SVOD subscriptions. Figure 7: Interpersonal sources of information Participants had the following to say regarding recommendations from family and friends respectively. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Recommendation from friends Recommendation from family Recommendation from colleague Social media (from friends) Positive word of mouth Fear of missing out (socially) Number of Interviewees Fe e d b ac k 42 Recommendations from family Participant 3: “get to watch like for instance for me to get the Showmax it was because my sister was watching the wife and she was telling me everything like all the drama that was going on there. Then I got Showmax” Participant 4: “with Disney Plus, because of the wide catalogue, like I said, people like my brother-in-law, he was very psyched up, he just kept on actively selling Disney Plus because of the catalogue” Participant 5: “Netflix, the family one also just add my family on because they keep pestering me” Recommendations from friends: Participant 2: “So I guess other people's opinions that I you know, but not just anyone like I think it's like my friends” Participant 15: “Amazon, there was one show that came on that got recommended or a movie or something that got recommended by a friends of theirs” Participant 14: “If a friend tells me that this movie was great, on the other hand, and it is Marvel one that I wouldn't normally watch, if it's a friend, I kind of understand his taste or whatever, then yeah, then I'm in. Definitely more influenced by my circles on that side of things.” 43 4.4 Findings for proposition 3: Experiential sources of information encourage SVOD customers to switch Experiential sources of information are a personal account of the experience that the interviewee with each respective SVOD had been a customer of, either within a paid subscription format, or a free trial. From the findings, the data presented in Figure 8 illustrates that an accurate algorithm/recommender system alongside a positive free trial experience and an intuitive user interface make up the leaders in influencing the behavior of a customer to switch SVODs. A recommender system or algorithm refers to the SVODs ability to form a customer profile around the content that you have watched. From this collection of data the accuracy in which it suggests similar shows to you to watch in the future is seen as a primary source of experiential information which can improve the customer’s experience of the respective SVOD, as well as promote customer switching. Figure 8: Experiential sources of information 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Positive free trial Intuitive user interface Postive ease of use Traditional television like experience Fast and well integrated on multiple devices Positive appeal of content High streaming quality/definition Accurate algorithm/recommender system Cant adjust resolution Postive prior experience Latest content Number of Interviewees Fe e d b ac k 44 Participants also brought to light the importance of free trials and user interface exemplified in the interview feedback: Free Trial: Participant 2: “sometimes there's a product on Amazon that's interesting to me, which is why I actually ended up going through this trial thing” Participant 8: “what was it Netflix that had a free trial? It's quite a cool feature, you know? I mean, you can make up your mind after that” User interface: Participant 1: “I think when you when you switch, and you have a bad experience on the verge of UI says it's like, it just puts you off and makes you want to go back to Netflix” Participant 7: “TV, the user interface, yeah, the resolution and all that type of thing would be important” Recommender system: Participant 10: “I think Netflix is very good at like pushing or promoting stuff that's really like good, the good content that they want you to see” Participant 12: “So the algorithm as also, obviously, it's developed an understanding of what your interests are. Yeah. So that plays a part as well. In you, like, enjoying this content that you're watching” 45 4.5 Findings for proposition 4: Low switching costs encourages SVOD customers to switch Figure 9 deals with the costs associated with switching. Positive emotional attachment with the brand relates to the loyalty that exists between the customer and the SVOD. A strong emotional attachment acts as a deterrent to switch in this case. Most influential of all switching costs is the financial consideration or whether the SVOD is competitively priced or not. Interviewees ranked this as the highest factor, as 80% of the participants are either positively or negatively influenced to switch by the financial cost of the SVOD being measured. Figure 9: Switching costs Participants provided the details regarding their sensitivity to price: Participant 15: “Price is probably one of the biggest factors for me” 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Competitively priced Easy to subscribe/unsubscribe/view options Positive familiarity of SVOD (ease of use) Positive emotional attachment with brand Number of Interviewees Fe e d b ac k 46 Participant 12: “Oh, definitely. It would be I mean, like, you know, especially in the economic climate that we're living in now. Everything is like, you're counting, you're counting everything.” Participant 16: “Definitely, that's another debit order that I don't want, there’s Showmax and Netflix and that's already you know, relatively significant amount of money that's going off in a month” 4.6 Findings for proposition 5: Strong attractiveness of alternatives encourage SVOD customers to switch Data illustrated in Figure 10 presents all the qualities that were found to be attractive by participants when deciding on whether switching SVODs is worth the move. Content and qualities associated with content were ranked highest of all qualities. More specifically, exclusive content, the size of the catalogue on the SVOD as well as the general popularity and positive public reviews of the content was ranked the highest forms of qualities that were attractive. 47 Figure 10: Attractiveness of alternatives The importance behind having positive general popularity was highlighted by participants 4 and 14: Participant 4: “I also use Reddit as well just to see what people on Reddit are saying about a particular show, or movie before I engage into it.” Participant 14: “Maybe YouTube like when YouTube is like sending like trailers and there's certain people I follow who speak about like series and stuff like that” 4.7 Summary of the findings From the data gathered, the results were clear in all propositions with either 2 or 3 categorized feedbacks provided from the participants being noticeably higher than the rest. This assists in 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Positive ease of use (speed, navigation, User interface) Large catalogue of content Exclusive content One subscription, multiple profiles Positive free trial experience Multiple device integration High streaming quality and definition Exclusive features Better Alternative to Traditional Satelite Television An appealing free trial offer General popularity/public reviews of content Up to date content Number of Interviewees Fe e d b ac k 48 the formulation of the next chapter’s discussions around the findings as it makes the narrative for answering each research question more accurate and less ambiguous. 49 Chapter 5. Discussion of the findings 5.1 Introduction This chapter will discuss and explain the results within the context of the literature contained in the literature review section. Thus, centered around the findings of this research, this chapter endeavors to resemble the literature review with these additional findings. The positioning of the findings will therefore also be discussed in relation to the literature underpinning the study. The discussion is organized in the order of the research questions presented in the consistency table. 5.2 Discussion for proposition 1: External sources of information encourage SVOD customers to switch External sources of information refer to the sources of information that exist in the environment of the participant. Keaveney & Parthasarathy (2001) measured this in the form of articles, reviews, advertising or other activities generated as a result of the company communicating their product/s with consumers. Within the context of this study, focus was shone on ratings of content that exist on the SVODs, as well as trailers and any form of review of content produced by third parties. As these forms of information were also characterized as impersonal or factual (Keaveney & Parthasarathy, 2001), additional sources included the size of the catalogue of content on each SVOD, and its technical integration and ability to stream on various forms of technological devices. The results of the research conducted by Keaveney & Parthasarathy (2001) supported that “online service continuers relied more on external sources of information when making their 50 subscription decisions than did online service switchers”. This contradicted the study’s findings, as 14 out of 15 participants valued exclusive content, and 13 out of 15 participants valued a large catalogue of content which served as strong influencers when considering whether or not to switch to other streaming platforms. Even though these external information sources were specifically centered around the SVOD content offerings, it none the less made up the highest-ranking considerations throughout all 5 propositions. Considering external influences which were more directly related to the research question presented in Keaveney & Parthasarathy (2001), the results from participants were not as convincing. Good reviews, and good ratings were 7/15 and 8/15 respectively as an influencer to switch to another SVOD. Similarly, the research of Keaveney & Parthasarathy (2001) also indicated that lower use of external, impersonal sources of information when making an online service choice was linked to higher service switching. Within the context of SVOD online services within South Africa, this research found the contrary, in that customers were more influenced to switch based on external, impersonal sources of information, more specifically, information regarding exclusive content, as well as size of content catalogue. It is also noted that Keaveney & Parthasarathy (2001) conducted their study through a quantitative approach which causes inherent differences in outcomes between their study and this research upon comparison, as this research used a qualitative approach. 5.3 Discussion for proposition 2: Interpersonal sources of information encourage SVOD customers to switch Keaveney & Parthasarathy (2001) proposed that online service continuers relied less on interpersonal sources of information when making the subscription decision than did switchers, 51 and their research results supported this. This would mean that the results of Keaveney & Parthasarathy (2001) research indicate that the majority of participants who switch are influenced by the opinions of friends, colleagues or relatives. The findings of this research does not support this convincingly, as 47% of participants are influenced to switch by recommendations from family, and only 40% of participants are influenced to switch by recommendations from their friends. Even more so, this research found that friends on social media, and recommendations from colleagues were even less impactful within the context of switching SVOD services. The profile of an online service switcher according to Keaveney & Parthasarathy (2001) was also characterized by someone who is influenced to switch through word of mouth, as opposed to research or previous experience. The findings of this research did not align with these results as only 13% of participants felt influenced to switch as a result by word-of-mouth sources. 5.4 Discussion for proposition 3: Experiential sources of information encourage SVOD customers to switch Experiential sources of information in Keaveney & Parthasarathy (2001) deals with the personal experience of the participant, along with their knowledge about general computers. Within the context of this study, the research explored participants personal experiences with SVOD services, as well as their knowledge of SVOD services within South Africa. According to the results found from the Keaveney & Parthasarathy (2001) study, “service continuers were significantly more likely than switchers… to use experiential information sources when making the online subscription decision”. This holds true in our findings. In the 52 cases where participants were highly influenced to switch through experiential sources, they would most likely add this SVOD to their already existing SVOD subscription as opposed to cancelling their current service in favor of the other. In many cases, the reason why 14/15 participants subscribed to Netflix was because they valued their experience with it. Any SVOD which rated high on their experiential influence vectors would be considered as an additional SVOD subscription to their already subscribed Netflix SVOD. Keaveney & Parthasarathy (2001) also found that continuers of services “had more prior experience with the service or with related services”. This holds true in our findings, as most participants who only had Netflix, or had their first SVOD as Netflix were found to still have it at the time they were interviewed. This would be represented by the cumulative years Netflix has been subscribed to by participants. 5.5 Discussion for proposition 4: Low switching costs encourages SVOD customers to switch The research conducted by Carter et al. (2014) investigated the connection between trust and switching costs and the subsequent results have concluded that trust has a stronger effect on e- loyalty than switching costs. Carter et al. (2014) goes on further to expound that switching costs have a harmful effect on loyalty when customers express a higher trust in e-services. Similarly, in the absence of trust, high switching costs prove to positively impact customers repurchase decision. Even though this study only explored the impact of switching costs in isolation of any other factors, it found that the switching costs between all SVOD service providers were mostly 53 influenced by financial cost of switching as well as the degree to which the participant had an emotional attachment to the respective brand of SVOD. Thus, this research supports the findings of Carter et al. (2014) in that the presence of positive emotional attachment participants had for their respective SVOD (Netflix or Showmax in this case), in conjunction with the presence of low switching costs, represented a high degree of loyalty with their current SVOD. This was not shown explicitly by the data collected however, evidence of low switching costs by Showmax and Netflix, along with their ability to retain subscribers suggest that loyalty is not a result of high switching costs but of other factors. 5.6 Discussion for proposition 5: Strong attractiveness of alternatives encourage SVOD customers to switch The results of (Liu et al., 2016) study suggest that there may not be a correlation between the actual deterioration of a brand and the service quality of the brand within the context of consumer perceptions, but instead switching may be caused by the degree to which competing products may be perceived as attractive. This research supports these findings in that 14 out of 15 participants value exclusive content which would mean that this would be a strong influence for them to switch services, which is not a result of a poor experience with their current SVOD service providers but rather attractive exclusive service offering provided by competitors. Liu et al. (2016) also found that users of IT services may make use of two different IT brands concurrently. This would mean that when users find other services attractive they may make use of this additional service without unsubscribing or abandoning their old service. The findings of this research within the context of SVOD services supports these findings. 54 Participants in this research often considerd additional SVOD services to compliment their already existing SVOD subscription or subscriptions. These additional services would enlarge the content selection available to the partipant or give them access to additional exclusive content which otherwise would not be available if they only were subscribed to one SVOD service. 5.7 Conclusion The findings of this research addressed the literature uniquely with the results found for each research proposition either being supported by literature or not. In cases where the literature data was supported by this research findings, it added a permutation to it which highlighted the changes technology has made over time, as well as the unique context to which South Africans experience SVOD services. 55 Chapter 6. Conclusions and recommendations 6.1 Introduction The primary aim for this research was to explore the drivers of customer switching behavior in SVOD services in South Africa. The benefit of understanding customer switching behavior will assist global and local SVOD players who have a presence in South Africa or who are researching the industry. These benefits will form important data points to include into their strategy such that they can maximize their performance in attracting SVOD users to subscribe to their platforms. Thus, this chapter will integrate the findings of the propositions into the original research questions set out in Chapter 1 and answer each question in turn. 6.2 Conclusions for research question 1: Which external sources of influence do SVOD consumers consider before switching to other services, and why? From the research results, large content selection as well as exclusive content were most influential to consumers when considering switching to other SVOD services. As some of the participants used Netflix as a cheaper alternative to DSTV (which is South Africa’s primary satellite television service provider) having a large content selection would make it compelling as consumers would be able to use the content available on Netflix to appeal to the whole household in terms of variety of taste and options. 56 The draw card however is the exclusive content that each one of these SVOD has on offer. Exclusive content creates a singular compelling argument to choose one SVOD over another due to it not being available anywhere else. Between these two external sources of content, they make up the primary assets SVOD have which further emphasizes the value that content has in the market. 6.3 Conclusions for research question 2: Which interpersonal sources of influence do SVOD consumers consider before switching to other services, and why? Because of the large number of options available for consumers to choose from, in terms of content as well as SVOD selection, it is important that consumers have a means with which they can narrow down what would appeal to them most. Interpersonal sources that rank highest in influence include recommendations of content from friends and family. The reason for this is that friends and family of the participant would be expected to know their tastes the best. In addition, assuming that the participant is influenced by someone who has watched the content themselves, it will aid in the social interaction between the two as they discuss the content that was recommended. The content that was recommended would also be closely related to the SVOD that it is available on, and therefore potential switching behavior. 6.4 Conclusions for research question 3: Which experiential sources of influence do SVOD consumers consider before switching to other services, and why? Consumers have shown that they value user interfaces when it comes to SVOD services. The importance of a good user interface would translate to an easy, intuitive experience by the consumer where they are free to navigate content and options without any challenges. This 57 would include the applications that exist on all kinds of devices some of which include pc/laptop, tablet, phone and smart tv. Another important experiential source of influence would be the recommender system that the SVOD uses. This is the system that forms a unique customer profile for the consumer based on what he or she was watched in the past. The strength and accuracy at which the SVOD recommends content to the user was seen as important as, typically, SVOD service providers have large content catalogues which can be cumbersome to sift through should a consumer want to watch something new that they would potentially enjoy. SVOD platforms have varying degrees at which they are successful in recommending content to a consumer which results in some being better than others. The potential for a consumer to switch from one SVOD to another would thus depend on the strength of the recommender system of the SVOD being switched to. 6.5 Conclusions for research question 4: Which switching costs do SVOD consumers consider before switching to other services, and why? Price and associated financial considerations that consumers may have as a result of switching SVOD service providers are important with consumers. Even though prices amongst SVOD services differ by relatively small amounts, it was the cost of adding an additional service that was predominantly the concern around cost. This was weighed heavily against the ease at which consumers could watch the content that interested them through illegal means such as pirating (torrenting) and free content streaming websites. 58 Consumers who considered a potential SVOD that they may switch to would always compare it with the service offering Netflix would have specifically. This natural inclination, along with most of the participants (and South Africa) being Netflix subscribers, would indicate a degree of loyalty South Africans have toward Netflix. Consumers who had more than one SVOD subscription would also use Netflix as a starting point when considering whether they would like to explore consuming new SVOD content. 6.6 Conclusions for research question 5: Which qualities of attractiveness of alternatives do SVOD consumers consider before switching to other services, and why? General popularity was found to be one of predominant qualities of attractiveness for alternative SVOD considerations. This could point to the general quality of content that is available to watch on the SVOD as well as how it was received by the market of consumers who have consumed it. If the content is being well received by the public in general as well as it being exclusive to a specific SVOD, then that particular SVOD would come across more attractive than others in competition with it. As content and exclusive content form the biggest assets that SVOD services have in the market, as alluded to above, the stronger the popularity of content that the SVOD has as well as the stronger the exclusive content, the more attractive it will be amongst its competitors. 6.7 Final conclusion The adoption of digital services in South Africa is on the rise as high-speed internet becomes more accessible and affordable. In turn, the market for SVOD services in South Africa is a young but growing one. This results in an opportunity for SVOD companies to get involved and grow with the market. Thus, as they develop their strategies around growing and retaining 59 their respective subscriber bases, it is important to be aware of what customers value most as well what influences their behavior as they navigate their way between all the various options available. This research set out to develop the understanding of South African customer behavior in the SVOD market within the context of switching behavior, and with the conclusions to each respective research question posed, it has provided a strong starting point in doing so. 6.8 Recommendations The growing market for SVOD services within South Africa has resulted in an increase in competition amongst existing players. This growing market has also incentivized new competitors to enter the market. The recommendations here address SVOD companies that are already in the market and wish to retain and grow market share, as well as SVOD companies who are researching the potential of entering the market as a competitor. For SVOD service providers to compete successfully in the South African market by taking market share away from existing players by way of customers switching from one service provider to another, original content is key. This could come in the form of creation of content that is applicable to their service globally, or more relevantly, through creation of original content made specifically for the South African market. SVOD services looking to gain traction in the South African market also need to bear in mind the fluctuations in the monetary exchange rates that may increase subscription fees unexpectedly from month to month. To maintain a cost expense that can be budget friendly in 60 the South African market, it is important for service providers to have their subscription fees quoted in the local currency (South African Rands). This will reduce any uncertainty that could potentially exist regarding subscription fees. A common barrier to entry within the South African market is the cost of data. Even though the participants in this study did not raise this as a concern when describing their challenges with their current and potential SVODs, it