Modelling the factors influencing Generation Y consumers' adoption of streaming services

Abstract

Within the last decade, individuals have started enjoying the benefits of streaming services which offer individuals unlimited entertainment options. The global entertainment and media industry has been transformed by digitisation, as indicated by the significant growth of video streaming services, such as Netflix and Amazon Prime, that had a projected revenue of US$51,617 million for 2020 with 882 million users worldwide. Furthermore, music streaming services such as Spotify and Apple Music had a projected revenue of US$16,395 million for 2020 and 595.8 million global users. Streaming services are one of the fastest-growing media markets in South Africa. The estimated revenue for video streaming in 2020 was US$107million, with 5 million users and the estimated revenue for music streaming in 2020 was US$37million, with 3.4 million users; hence, the traditional broadcasting model is being disrupted. This growth may also, in part, be attributed to the rapid penetration and decreasing prices of smartphones in the country. Smartphones contribute to the thriving popularity of social media platforms and other digital mediums that service providers use for marketing and branding purposes. Smartphones also serve as platform for accessing streaming services. Furthermore, the efforts of telecommunication companies to grant an increasing number of consumers’ access to the internet as well as the recent lower data bundle costs, have contributed to the preparation of the South African market for streaming services. For this reason and others, including affordability and repetitive entertainment schedules, numerous South Africans are cancelling their DStv subscriptions in favour of subscribing to streaming services. Concerning market segments, Generation Y (individuals born between 1986 and 2005) is fast manifesting as one of the most significant generations to date globally in terms of size and potential disposable income. In 2020, Generation Y included individuals aged between 15 to 34 years, with the adult portion of this generation comprising 18 to 34 year olds. Generation Y also represents a significant portion of the South African population. According to Statistics South Africa, approximately 35 percent of the population in South Africa was categorised as Generation Y in 2020. These individuals are accustomed to being technology enthusiasts since they are the first generation to be connected worldwide through the internet and social media. As such, Generational Y individuals are technologically advanced, entertainment driven and are known for

shopping online (Pollak, 2014). Moreover, this generation is accustomed to get what they want, when and where they want it. A number of studies indicate that members of Generation Y are gravitating toward streaming services due to the affordability and convenience of such services, as well as the variety of content available on streaming platforms. It is estimated that they make up 25.3 percent of the demographic that uses streaming services, which indicates that this is a growing and important market for marketers of streaming services. Therefore, Generation Y individuals are considered to be a salient target market for streaming services. As such, this study focuses on adult members of the Generation Y segment. The primary purpose of this study was to determine the factors that influence adult Generation Y consumers’ perceived value of and intention to adopt streaming services. The study utilised dimensions from three well-known theories, namely the technology acceptance model, the innovation diffusion theory and the perceived value of a medium model. Based on these theories, path analysis was conducted to determine the influence of trialability, risk avoidance, perceived usefulness, informativeness and enjoyment on Generation Y consumers’ perceived value of and, consequently, adoption intentions towards streaming services in the South African market. A structured self-administered online questionnaire was distributed by employing the snowball sampling method through social media platforms, namely WhatsApp and Facebook. Initially, 20 respondents were asked to complete the questionnaire and, after doing so, to share the Google Form link of the questionnaire with other individuals within the age group of 18 and 34 years old. A total of 369 Generation Y consumers took part in this study. The findings of the study indicate that trialability and perceived usability of streaming services have a direct positive influence on Generation Y consumers’ intention to adopt streaming services. Perceived informativeness, perceived enjoyment and risk avoidance were found to have a positive influence on Generation Y consumers’ intention to adopt streaming services through their influence of the perceived value of those services, which, in turn had a direct positive influence on their intention to adopt streaming services. Managers of streaming services need to take cognisance of these findings. This study recommends that when targeting Generation Y consumers in South Africa streaming service providers should constantly develop their user interfaces to enhance consumers’ content discovery and look at the possibility of offering the consumers interactive content. Furthermore, they should focus on delivering a consistent experience in order for Generation Y consumers to feel that the services are informative, useful and enjoyable. A key factor to encouraging more Generation Y consumers to adopt streaming services in South Africa is to deliver on the value

proposition, which means constantly innovating, both on content and on the user interface. Another salient result of this study was that it established how important a free trial period is to encouraging behavioural intentions towards streaming services amongst this target market. Therefore, it is recommended that streaming service providers consider lengthening their free trial period from the conventional three months to six months. This offer of a free trial period should also feature prominently in marketing communication messages promoting streaming services. As streaming services are relatively new in the entertainment industry and taking into consideration that research predicting the factors that influence streaming service adoption is still lacking both internationally and in South Africa, the findings of this study offer theoretical and practical contributions. The empirically tested model developed in this study, which is based on the technology acceptance model, the innovation diffusion theory and the perceived value of a medium theory, adds to the literature on consumer behaviour, new media platform adoption and profiling Generation Y consumers. In addition, this model can be used as it is or be extended for use in future studies amongst other segments of consumers in South Africa and internationally. Moreover, this study condenses several ideas regarding consumer behaviour, e-marketing, streaming services, and Generation Y consumers, which will help other academics to streamline their own research by utilising this study’s findings. Furthermore, the findings of this study will enable marketers of streaming service providers to tailor their marketing strategies to target the South African Generation Y segments more effectively.