Conjoint Analysis: Streaming Service
A conjoint analysis and interview on streaming service qualities.
For my product I chose to do a video streaming service like Netflix or Hulu. I chose this because there are a barrage of video streaming services right now and I wanted to understand what the most important features are to the consumer when deciding on their preferential streaming service. The four features I chose for these variety of streaming services were the following. Whether or not advertisements are shown on the platform while streaming video content. Whether or not the platform allows for the ability to download video content for offline streaming. 720p versus 4K visuals for the streaming video quality. Lastly, a $6 fixed price per month versus a $12 dollar fixed price per month. Advertisements would be shown four times throughout the viewing experience and would last two minutes long, which many consumers would find obnoxious, but would allow for additional revenue. Offline streaming would allow users to download a video for viewing when they aren’t connected to data or wifi, like on a road trip or flight. Higher quality visuals would allow for a more pristine user experience while viewing content.
My respondent, Dante, represents an average consumer for the general population. He is not extremely tech savvy and is not well informed on differences between higher and lower visual resolutions, but was informed for the purposes of this interview. Dante does however still appreciate good visuals, but did not notice that significant of a difference in visual quality when viewing 720p versus 4K streaming resolutions. Dante does not travel often and has unlimited data coverage for his devices, so he emphasized how little downloadable content matters to him. Dante does not pay for his streaming services himself, but understood how price difference would matter towards others. Above all else Dante emphasized the importance of not seeing advertisements when streaming content. I believe his W preferences are very applicable to the general public.
In my findings, as seen in appendix c, I found that Dante’s partworth percentage for advertisements was 42.8%, 32.2% for visuals, 24.3% for prices, and 0.7% for downloadable content. Advertisements, visuals, and downloadable content were positive coefficients, so not having advertisements, having 4K visuals, and having downloadable content were favorable features for Dante. The one negative coefficient was price, so Dante favored the $6 dollar price point instead of the $12 dollar price point. The price tradeoffs I calculated for willingness to pay(WTP) were $10.54 favoring not having advertisements, $7.95 favoring 4K visuals, and $0.16 favoring downloadable content. This means that there could be different tiers for the streaming service to include different features. Similar to Hulu, the price point could be increased from $6 by $10.54 for the option to disable advertisements. For visuals the price could be increased by $7.95 to include 4K visuals. When it comes to downloadable content, this feature either is necessary to include or should be included free of charge due to how low in popularity it is.
These results seem to accurately reflect the initial opinions given by Dante. The limitation of this exercise is that the different variants of the product not be experienced by the respondent and many of the variants seemed similar to each other, so it was difficult for the respondent to place strong opinions on each individual variant. Based on the regression output I believe the ideal product would not include downloadable content or advertisements. It would also have 4K visuals as an optional feature since this feature can be less desirable to the general population, however the standard resolution would be 720p in order to entice people to upgrade in order to not deal with low resolution visuals. The starting price would be $10.54 with an option to upgrade to 4K for an additional $7.95.
Appendix A: Recorded Data from interview.
Appendix B: Regression Output
Appendix C: Partworth Pie Chart
Appendix D: Additional Details