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Writer's pictureKalle Noble

Consumer Preferences: A Conjoint Analysis of Features for Video Streaming Services

Video streaming services like Netflix and Hulu have become increasingly popular in recent years. With a wide range of options available to consumers, it is important for service providers to understand the factors that influence consumer preferences. In this article, we will explore the results of a conjoint analysis conducted to identify the most important features for consumers when choosing a streaming service.

Consumer Preferences

Features considered in the analysis

To determine the key features influencing consumer preferences, four factors were selected for the conjoint analysis:


1. Advertisements during streaming

One of the features considered was whether advertisements are shown on the streaming platform while users are watching video content. Advertisements can generate additional revenue for the service provider but may be seen as obnoxious by consumers.


2. Offline streaming capability

The ability to download video content for offline viewing was another factor analyzed. This feature allows users to enjoy their favorite shows and movies even when they are not connected to the internet, such as during a road trip or flight.


3. Video quality options (720p vs. 4K)

The streaming video quality is an important aspect for users. In this analysis, we compared the preference for 720p resolution with the preference for 4K resolution. While some users appreciate high-quality visuals, others may not notice a significant difference or prioritize it as much.


4. Price points ($6 vs. $12 per month)

Lastly, the analysis considered two fixed price points: $6 per month and $12 per month. The aim was to understand whether users value a lower price point or are willing to pay more for additional features.

Appendix A: Interview Recorded Data
Appendix A: Interview Recorded Data

Respondent profile and preferences

For this analysis, our respondent, Dante, represents an average consumer within the general population. Dante is not highly tech-savvy and has limited knowledge about the differences between various video resolutions. However, he does appreciate good visuals to some extent.


Dante does not travel frequently and has unlimited data coverage for his devices. Therefore, the ability to download content for offline streaming is not a significant factor for him. It is worth noting that Dante does not pay for his streaming services personally but acknowledges the importance of price differences for others. However, the absence of advertisements during streaming is of utmost importance to him.


Conjoint analysis results

The conjoint analysis revealed the part-worth percentages for each feature based on Dante's preferences. The coefficients indicated the importance of each feature in Dante's decision-making process.


According to the analysis, advertisements during streaming had a partworth percentage of 42.8%, indicating its significance to Dante. Visuals had a partworth percentage of 32.2%, while price had a partworth percentage of 24.3%. Downloadable content had the lowest partworth percentage at 0.7%.


Positive coefficients for advertisements, visuals, and downloadable content suggest that not having advertisements, having 4K visuals, and including downloadable content are favorable features for Dante. The negative coefficient for price indicates that Dante preferred the $6 price point over the $12 price point.


Based on these findings, the analysis also calculated the willingness to pay (WTP) for each feature. Dante was willing to pay an additional $10.54 to avoid advertisements, $7.95 for 4K visuals, and only $0.16 for downloadable content. These results suggest the possibility of different tiers for the streaming service, allowing users to choose the features they value the most.


Implications for the streaming service

Based on the conjoint analysis results, several implications arise for the streaming service:


1. Tiers and pricing options based on preferences

Similar to Hulu's model, the streaming service could offer different tiers with varying features. The base price point of $6 could be increased by $10.54 for an advertisement-free experience. This would allow users to opt for a higher-priced tier without advertisements.


2. Including 4K visuals as an optional feature

While Dante did not emphasize the importance of 4K visuals, it could still be offered as an optional upgrade. The standard resolution could be set at 720p to entice users to consider the upgrade if they desire a higher-quality viewing experience.


3. Considerations for downloadable content

The analysis indicated that downloadable content was not a significant factor for Dante. Therefore, the service provider should carefully evaluate the popularity and demand for this feature before deciding to include it. If it is not highly desired, it could be offered free of charge or excluded altogether.


Limitations of the analysis

It is essential to acknowledge the limitations of the conjoint analysis. One limitation is that Dante did not have hands-on experience with the product variants. This lack of firsthand experience may have impacted his ability to provide strong opinions on each individual variant.


Additionally, some of the variants analyzed may have seemed similar to each other, leading to challenges in differentiating and forming strong preferences. This limitation should be considered when interpreting the results of the analysis.


Ideal product recommendation

Based on the regression output and the conjoint analysis results, the ideal product configuration for the streaming service would include the following features:

  • Exclusion of advertisements during streaming

  • Optional upgrade for 4K visuals, with the standard resolution set at 720p

  • Starting price of $10.54, with the option to upgrade for additional features

This configuration aligns with Dante's preferences and is expected to resonate well with the general population, as he represents an average consumer.


Understanding consumer preferences is crucial in the highly competitive streaming service industry. The conjoint analysis provided valuable insights into the features that matter most to consumers. By tailoring the product offerings based on these preferences, streaming service providers can better attract and retain customers.


By prioritizing advertisement-free streaming and offering optional upgrades for visuals, the streaming service can cater to the preferences of consumers like Dante. Furthermore, considering different pricing tiers and evaluating the demand for downloadable content will contribute to a well-rounded service offering.

Overall, the conjoint analysis serves as a valuable tool for making informed decisions and optimizing the streaming service to meet the needs and desires of its target audience.


FAQs

1. Are there any plans to include other features in the streaming service?

While the conjoint analysis focused on specific features, service providers may consider incorporating additional features based on market research and consumer feedback. Continuous evaluation and adaptation are essential to meet evolving consumer preferences.


2. How will the streaming service differentiate itself from competitors?

Differentiation can be achieved by offering unique features, personalized recommendations, exclusive content partnerships, user-friendly interfaces, and exceptional customer service. Understanding and addressing consumer preferences is key to standing out in a crowded market.


3. What steps will be taken to ensure a user-friendly interface?

User experience design and usability testing play crucial roles in creating a user-friendly interface. Conducting user research, gathering feedback, and iterating on the design are essential steps to provide an intuitive and enjoyable streaming experience.


4. Will there be any content exclusivity agreements with studios or production companies?

Content exclusivity agreements can be an effective strategy to attract and retain subscribers. Collaborations with studios or production companies to offer exclusive content can be pursued to differentiate the streaming service and provide unique viewing options.


5. How will customer feedback and preferences be continuously evaluated and incorporated into the service?

Implementing feedback channels, conducting surveys, analyzing user behavior, and monitoring market trends are some of the ways to gather and evaluate customer feedback. Regularly incorporating consumer preferences and adapting the service accordingly ensures its continued relevance and success.

Appendix B: Regression Output
Appendix B: Regression Output

Appendix C: Partworth Pie Chart
Appendix C: Partworth Pie Chart

Appendix D: Additional Details
Appendix D: Additional Details

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Kalle Noble
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