Adaptive Perceived Value–Fatigue (APVF) Theory for OTT Subscription Pricing:
The Adaptive Perceived Value–Fatigue (APVF) Theory explains how consumers’ willingness to pay (WTP) for OTT subscriptions is influenced by both perceived value and subscription fatigue under different pricing models. While earlier theories such as Uses and Gratifications Theory, Price Sensitivity Theory, Perceived Value Theory, IS Success Model, and Continuance Intention Models explain adoption and continuance behavior, they do not fully address how pricing structures interact with psychological fatigue over time. APVF Theory bridges this gap by integrating pricing perception, value evaluation, and fatigue into one dynamic framework.
The theory is built on five core assumptions. First, consumers are value maximizers but emotionally bounded, meaning they evaluate subscriptions both economically and psychologically. Second, perceived value is dynamic and changes based on content quality, personalization, and alternatives. Third, subscription fatigue moderates value perception, as managing multiple subscriptions can create cognitive overload and reduce perceived benefits. Fourth, pricing complexity influences evaluation, as tiered, freemium, bundled, or ad-supported models affect perception differently. Finally, willingness to pay is adaptive, meaning consumers continuously reassess renewal decisions.
The theory consists of five key constructs. Pricing Structure Perception (PSP) refers to how consumers evaluate subscription models such as tiered plans, ad-supported options, and bundling strategies in terms of fairness, affordability, and transparency. Perceived Functional Value (PFV) includes non-monetary benefits like content quality, exclusivity, usability, and streaming performance. Perceived Economic Value (PEV) reflects price fairness and cost–benefit comparison. Subscription Fatigue (SF) includes cognitive overload, budget exhaustion, content redundancy, and switching stress. Adaptive Willingness to Pay (AWTP) represents the dynamic intention to purchase, renew, upgrade, or continue subscriptions.
The conceptual model follows a sequential structure: Pricing Structure Perception influences Perceived Functional and Economic Value, which in turn determines Adaptive Willingness to Pay. Subscription fatigue acts as a moderating factor that can weaken the positive effect of perceived value on willingness to pay.
The APVF Theory contributes theoretically by integrating pricing perception and psychological fatigue into a unified model, conceptualizing willingness to pay as dynamic, and explaining subscription churn in digital ecosystems. From a managerial perspective, the theory suggests that OTT platforms should simplify pricing, reduce redundancy, personalize plans, and monitor fatigue signals to sustain long-term consumer acceptance.
In summary, APVF Theory proposes that sustainable subscription intention occurs when perceived value consistently outweighs cumulative psychological and financial fatigue.