Strategic management of over-the-top services: Focusing on Korean consumer adoption behavior

- We empirically analyze consumer preferences for various attributes of OTT services.
- The relationship between OTT and traditional broadcasting services is examined.
- We propose a user-centered OTT strategy to lead the OTT market.

With the emergence of over-the-top (OTT) services, consumers can enjoy broadcasting contents using personal computers, smartphones, and tablets whenever and wherever they want. Not only are traditional broadcasting service providers entering the OTT service market, but Internet service providers are as well, and they are competing with each other to achieve market power. We estimated consumers' preference for OTT service based on conjoint survey data, and conducted a market simulation based on the estimation result in order to analyze the change of market penetration ratio in accordance to the change of market strategy of each broadcasting service provider. As a result, consumers have the highest priority for real-time broadcasting. When the terrestrial television broadcasting service provider does not provide its contents to other service providers, Internet service providers and pay TV service providers can increase their market power by decreasing the price and by increasing the number of VODs respectively.