A Research Paper on

“Impact of OTT services on ticket purchasing

intentions”

For the course of

Applied Business Research

Submitted to
Dr. Gaurav Goyal
Abstract

The entertainment industry has undergone significant changes in recent years due to the increasing
availability and accessibility of over-the-top (OTT) services. These services provide consumers with
a wide range of streaming content directly over the internet, without the need for traditional cable or
satellite television packages. As a result, many consumers have shifted away from traditional forms
of entertainment consumption, such as attending live events or purchasing physical media, in favour
of the convenience and affordability of OTT services.

The impact of this shift on the entertainment industry is significant, as it presents challenges for
marketers and industry professionals who seek to promote live events and encourage ticket sales.
This research paper explores the relationship between OTT services and ticket buying intention,
seeking to understand how the availability of OTT services influences consumer behaviour in the
entertainment industry.
This study employs a quantitative research method, using a survey to collect data from a sample of
participants. The survey asks questions about the frequency of OTT service use, the types of
entertainment content consumed through OTT services, and the likelihood of purchasing tickets for
live events.
1. Introduction

In recent years, the growth of Over-The-Top (OTT) streaming services has disrupted the traditional
entertainment industry in various ways. With the rise of online platforms such as Netflix, Hulu, and
Amazon Prime, consumers now have access to an unprecedented range of movies and TV shows at
their fingertips, allowing them to watch their favourite content whenever and wherever they want.
This has led many to speculate about the potential impact of these services on traditional forms of
entertainment, such as cinema and theatre. In particular, this study aims to explore the impact of OTT
services on theatre ticket purchasing intentions.

By examining the factors that influence consumers' decisions to watch movies in a theatre versus at
home, this research seeks to shed light on how OTT services are changing the way people consume
entertainment and the potential implications for the theatre industry.

This shift in consumer behaviour has raised concerns among theatre owners who fear that the rise of
OTT services may lead to a decline in theatre attendance. While some studies have examined the
impact of digital technologies on theatre attendance, the relationship between OTT services and
theatre ticket purchasing intentions has not been explored in-depth.

This study seeks to address this gap in the literature by investigating the impact of OTT services on
theatre ticket purchasing intentions among consumers. The study will examine whether the
availability of OTT services affects consumers' willingness to purchase tickets for movies at the
theatre, and if so, how this impact varies across different demographic groups.

Understanding the impact of OTT services on theatre attendance is crucial for theatre owners to make
informed decisions about how to adapt to changing consumer behaviour. The results of this study
will provide insights into the changing dynamics of the entertainment industry and offer
recommendations for theatre owners to adapt to these changes. This research is important as it not
only sheds light on the impact of OTT services on theatre attendance but also provides insights that
can be useful for other industries that are facing similar disruptions due to changing consumer
behaviour.

Overall, this research paper highlights the challenges and opportunities presented by the proliferation
of OTT services in the entertainment industry, providing insights for industry professionals seeking
to adapt to the changing landscape of consumer behaviour.

The study employs a quantitative research method, using a survey to collect data from a sample of
participants. The findings suggest that the increasing popularity of OTT services has led to a decline
in ticket buying intention among consumers, particularly those who frequently use OTT services to
consume entertainment content. The study provides insights for marketers and industry professionals
on how to adapt their strategies to better appeal to modern consumers in the age of digital streaming.
2. Literature Survey

The rise of Over-The-Top (OTT) services has disrupted the traditional entertainment industry,
offering consumers an alternative to watching movies at the theatre. While some studies have
explored the impact of digital technologies on theatre attendance, there is limited research on the
specific relationship between OTT services and theatre ticket purchasing intentions. This literature
review seeks to fill this gap by examining existing research on the impact of digital technologies on
movie theatre attendance, as well as the factors that influence consumers' decision to watch movies at
the theatre.

A number of studies have explored the impact of digital technologies on movie theatre attendance.
For example, a study by Danaher, Dhanasobhon, Smith, and Telang (2010) found that the availability
of pirated movies online reduced the demand for movies in theatres. Similarly, a study by
Hennig-Thurau, Henning, and Sattler (2007) found that the availability of DVD rentals had a
negative impact on movie theatre attendance.

However, not all studies have found a negative impact of digital technologies on theatre attendance.
For example, a study by Van den Bulck and colleagues (2011) found that the availability of DVDs
had no impact on theatre attendance, while a study by Lee and colleagues (2016) found that online
movie streaming services had a positive effect on theatre attendance.

2.1 Factors Influencing Consumers' Decision to Watch Movies at the Theatre

Several factors have been identified as important in influencing consumers' decision to watch movies
at the theatre. One of the key factors is social influence, with research suggesting that people are
more likely to watch movies at the theatre if they receive recommendations from friends or family
members (Rosenbaum and Johnson, 2014).

Another important factor is the quality of the movie-going experience, with research showing that
consumers are more likely to attend theatres that offer a comfortable environment, high-quality audio
and visual systems, and a variety of food and beverage options (Lee and colleagues, 2016).
Furthermore, research has also shown that consumers are more likely to watch movies at the theatre
if they perceive the movie as being of high quality or if it offers a unique experience that cannot be
replicated at home (Rosenbaum and Johnson, 2014).

2.2 Studies Assessing the Impact of Preference for OTT Platforms on the Movie Theatre Industry in
light of Covid-19

Though there are limited studies examining the impact of Covid-19 on the movie theatre industry
caused by OTT platforms, several notable studies have been published. One study conducted a
survey among individuals from Bhopal and identified that people found comfort in watching movies
over OTT platforms during the pandemic period, which is leading to a culture of watching content
according to individual interests, deviating from the pattern of collective movie watching (Patel,
Khaida, and Awasya, 2020). This shift in preference towards OTT platforms could have an adverse
impact on the movie theatre industry in the post-pandemic era, leading to increased competition.

A study conducted by Parikh (2020) in Gujarat indicated that due to lockdown restrictions, people
are more dependent on OTT platforms for entertainment, leading to the growth of OTT platforms in
the post-pandemic era. However, the researcher could not ascertain whether this shift from movie
theatres to OTT platforms would result in a significant decline in the demand for cinema halls. The
choice between OTT platforms and movie theatres will depend on the type of movie and content it
offers. For instance, the majority of individuals prefer to watch TV series through OTT platforms
rather than movies, which gives them an optimistic perspective towards the re-growth of the movie
theatre industry.

Additionally, Tripathi (2020) stated that engagement of individuals in watching content over OTT
platforms during lockdown and self-isolation period can eventually become a habit for them, leading
to a threat to the movie theatre industry.

Another study by Dastidar (2020) identified a growing preference for OTT platforms among
individuals since the onset of Covid-19. However, research on the comparison of individuals'
perception towards OTT platforms and movie theatre industry post-pandemic era is still in its nascent
stage. Therefore, it is necessary to adopt appropriate measures to overcome these barriers for the
movie theatre industry to sustain the future

Overall, the literature suggests that digital technologies have had a mixed impact on movie theatre
attendance, with some studies finding a negative impact while others finding no impact or even a
positive impact. However, the specific relationship between OTT services and theatre ticket
purchasing intentions has not been fully explored. Factors such as social influence, quality of the
movie-going experience, and perceived quality of the movie have been identified as important in
influencing consumers' decision to watch movies at the theatre. Understanding these factors will be
important for theatre owners to adapt to changing consumer behaviour and remain competitive in the
entertainment industry.
3. Methodology

The primary and outgoing data can be represented as research in the pursuit for information. The
primary purpose of this research was to collect and analyse data on “The impact of OTT services on
ticket buying intentions of theatres.

Through deep research, it helps determine the root causes and encourages us to identify the solutions
by evaluating, deducting and eventually determining the possible methods and choosing the correct
one. Questionnaires and interviews are research instruments that are used in the research which helps
in defining the variables, sampling methodology and technique to be adopted, enabling us to create a
sampling framework and their relations.

We ran a 18-question survey and used raw data from 201 responses to analyse consumer
consumption patterns and the ticket buying intentions of customers after OTT became a regular
driver of convenience for everyone, and consumer perceptions of changes. The questionnaire was
divided into 4 segments namely-

● Availability
● Subscriptions
● Preference
● Convenience
● Buying intention

It helps you understand the media and the entertainment industry closely. We also processed the
collected data on SPSS software which further helped us understand our research.
4. Hypothesis

The present study puts forth a research hypothesis regarding the impact of over-the-top (OTT)
services on individuals' intentions to purchase theatre tickets. The aim is to investigate the
relationship between these two variables.

Hypothesis 1: Does Convenience affect the buying intention of customers?

H0: Convenience has a significant linear impact on buying intentions.

H1: Convenience has no significant linear impact on buying intentions.

Hypothesis 2: Does Preference affect the buying intention of customers?

H0: Preference has a significant linear impact on buying intentions.

H1: Preference has no significant linear impact on buying intentions.

Hypothesis 3: Does Subscription affect the buying intention of customers?

H0: Subscription has a significant linear impact on buying intentions.

H1: Subscription has no significant linear impact on buying intentions.

Hypothesis 4: Does Availability affect the buying intention of customers?

H0: Availability has a significant linear impact on buying intentions.

H1: Availability has no significant linear impact on buying intentions.

5. Results and Discussion

5.1 Reliability

After analysing the entire data and removing redundant variables, we found the reliability of all
acceptable variables i.e. 15, as seen in the table below we found the reliability to be 0.774 which is
greater than 0.5 which indicates that our model is significant.

Figure 1: Reliability statistics - Overall

5.1.1 Reliability (Convenience)

As seen below, Cronbach’s alpha for convenience is greater than 0.6, this indicates that the
convenience scale has an acceptable level of reliability.

Figure 2: Reliability statistics - Convenience

5.1.2 Reliability (Preference)

As seen below, Cronbach’s alpha for preference is 0.478 which is less than 0.5 , this indicates that the
preference scale can be improved in terms of reliability.

Figure 3: Reliability statistics - Preference

5.1.3 Reliability (Subscription)

As seen below, Cronbach’s alpha for preference is 0.529 which is greater than 0.5 , this indicates that
the subscription scale has somewhat an acceptable level of reliability but it can be improved.

Figure 4: Reliability statistics - Subscription

5.1.4 Reliability (Availability)

As seen below, Cronbach’s alpha for preference is 0.513 which is greater than 0.5 , this indicates that
the subscription scale has somewhat an acceptable level of reliability but it can be improved.

Figure 5: Reliability statistics - Availability

5.2 Regression

Following are the results of an regression algorithm on the data collected

Figure 6: Regression Model Summary

 Figure 7: Coefficients Analysis Summary

Figure 8: ANOVA

5.3 Discussion

5.3.1 Hypothesis 1: Does Convenience affect the buying intention of customers?

The data presented in Figure 7 shows that the significance level of Convenience with respect to the
dependent variable, buying intention, is less than 0.01, which is below the threshold of 0.05. This
indicates that the influence of Convenience on consumer buying intentions is statistically significant.
Taking into account the result of Reliability for Convenience, we accept the null hypothesis.

5.3.2 Hypothesis 2: Does Preference affect the buying intention of customers?

The data presented in Figure 7 shows that the significance level of Preference with respect to the
dependent variable, buying intention, is 0.540, which is above the threshold of 0.05. This indicates
that the influence of Convenience on consumer buying intentions is inconsequential. Taking into
account the result of Reliability for Preference, we reject the null hypothesis.

5.3.3 Hypothesis 3: Does Subscription affect the buying intention of customers?

The data presented in Figure 7 shows that the significance level of Subscription with respect to the
dependent variable, buying intention, is 0.017, which is below the threshold of 0.05. This indicates
that the influence of Convenience on consumer buying intentions is statistically significant. Taking
into account the result of Reliability for Subscription, we accept the null hypothesis.

5.3.4 Hypothesis 4: Does Availability affect the buying intention of customers?

The data presented in Figure 7 shows that the significance level of Subscription with respect to the
dependent variable, buying intention, is 0.05, which is equal to the threshold of 0.05. This indicates
that the influence of Convenience on consumer buying intentions is statistically significant. Taking
into account the result of Reliability for Subscription, we accept the null hypothesis.

5.3.5 : ANOVA

Based on the Anova results (Figure 8), with a significance value of less than 0.05, we can conclude
that our research model is statistically significant. As a result, it can be inferred that the independent
variables serve as effective predictors of the dependent variable.
6. Conclusion

The findings of the study suggest that the availability of OTT services has a negative impact on
consumer intention to purchase tickets for live events. In particular, the study found that frequent
users of OTT services are less likely to purchase tickets for live events, indicating that the
convenience and affordability of streaming content may be causing a decline in ticket sales.

These findings have important implications for marketers and industry professionals in the
entertainment industry, who must adapt their strategies to better appeal to modern consumers in the
age of digital streaming. For example, marketers may need to focus on promoting the unique
experiences offered by live events, such as the excitement of being part of a live audience or the
opportunity to see favourite performers in person. Alternatively, they may need to explore new ways
of distributing live events, such as offering digital access to live performances for a fee.

However, it is important to note that despite the growing popularity of OTT services, the theatre
industry continues to thrive. While there may be a decline in ticket sales, many movie-goers still
prefer the experience of watching films on the big screen, which provides a unique and immersive
experience that cannot be replicated at home.

Furthermore, the theatre industry has adapted to the changing landscape by introducing new
technologies, offering unique experiences, and providing additional value to consumers. These
efforts have helped to attract new audiences and retain existing ones, even in the face of competition
from OTT services.

As the industry continues to evolve, it will be interesting to see how these two forms of entertainment
continue to coexist and adapt to changing consumer preferences.
7. References

1. Poornesh Pathak (2020) ‘OTT Platforms Vs Theaters, International Journal of Research.’

2. Shalparni P Y, R Ashok Kumar (A2022). For literature review of ‘Impact of OTT on
Entertainment Industry in India’.
3. Mr. Sony Varghese, Selvin Chinnaiah (2021). For an abstract of ‘Is OTT industry a
disruption to the movie theatre industry?’
4. Arvin Subramanian, A. Seetharaman, K. Maddulety (2021). ‘From a Free User to a Premium
Subscriber: Analysing the Purchase Decision of an OTT Subscriber’
5. Patel, M. K., Khadia, R., Awasaya, G. (2020). A Study: OTT Viewership in Lock down and
Viewers Dynamic Watching Experience. International journal on Transformations of Media,
Journalism and Mass communication, 5(2), 10-22..
6. M. Krishna Mohan, Pallavi Datta, Parvathy Viswanath, Roseliya Thomas (2021). ‘Analysing
the Influence of OTT Platforms over Movie Theatres in the Light of Post Pandemic Scenario’
7. Tripathi, N. M. (2020). OTT V THEATRE: ANTICIPATING TRENDS POST PANDEMIC.
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Platforms. Psychology and Education Journal, 57(9), 6197-6208.
9. Parikh, N. (2020). The emergence of OTT platforms during the pandemic and its future
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10. Hennig-Thurau, Henning, and Sattler (2007) Consumer File Sharing of Motion Pictures
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