Exploring the competitive market structure of digital-based subscription economy: The empirical investigation of South Korea

Abstract

The digital-based subscription economy has experienced rapid growth and diversification, yet existing research predominantly focuses on single-service adoption factors, failing to capture the complexity of multi-service consumer behavior. This study aims to provide a comprehensive analysis of the digital-based subscription economy in South Korea by examining the interrelationships between various subscription services and identifying distinct consumer segments. Utilizing data from the 2022 Korea Media Panel Survey, we employ Multivariate Probit (MVP) and Latent Class Model (LCM) analyses, to elucidate the correlations among service types and ascertain patterns of concurrent or substitutive usage. Our findings reveal a clear hierarchy of preferences, with Subscription Video on Demand (SVOD) emerging as the most preferred option, followed by music streaming, newsletters, e-books, educational content, and knowledge information services. The MVP analysis also uncovers significant negative correlations between SVOD and other content types, suggesting a potential substitution effect, while positive correlations are observed among newsletters, music streaming, and e-book services, indicating complementary relationships. The LCM analysis identifies three distinct consumer segments: “News-centric Subscribers,” “Diverse Content Consumers,” and “SVOD Enthusiasts,” each characterized by unique subscription patterns and demographic profiles. This study contributes to the literature by developing a comprehensive framework for understanding multi-service adoption in the digital content subscription market, challenging traditional single-service adoption models. Our findings also have significant implications for content providers and marketers, offering insights for developing targeted bundling strategies and demographic-based marketing approaches.