A Study on AI-Driven Pricing Strategies Used by OTT Platforms

Abstract

Abstract Over-the-top (OTT) streaming platforms have moved beyond using artificial intelligence (AI) purely for content recommendation and are increasingly deploying it to set and personalise the price a subscriber sees. This study examines consumer awareness, comfort, and fairness perceptions surrounding AI-driven pricing on OTT platforms through a structured survey of 70 valid respondents, supported by a review of existing academic literature and a real-world industry case study. The research finds that awareness of algorithmic pricing is only moderate while fairness concern is strong: 52.9% of respondents said they were aware that OTT platforms use algorithms to personalise price, only 38.6% said they were comfortable paying a different price than another user for the same plan, and 61.4% said it would feel unfair if a friend paid less for an identical plan a gap of nearly 23 points between discomfort and perceived unfairness. When directly offered a choice between a plainly stated fixed price and a cheaper AI-personalised price, 51.4% of respondents chose the fixed price over the AI-personalised alternative, indicating that transparency outweighs the promise of a discount. Price transparency emerged as the single most valued factor in a subscription decision (34.3%), ahead of content library size, ad-free experience, personalised recommendations, and multi-profile sharing. A supporting case study of Netflix's password-sharing crackdown and ad-supported tier rollout illustrates that a well-executed, AI-enabled monetisation strategy can still deliver substantial subscriber and revenue growth even amid visible consumer frustration. The study concludes that AI-driven pricing is not a purely technical back-end function but a measurable driver of consumer trust, and that long-term commercial success depends on pairing algorithmic sophistication with genuine transparency toward the consumer. Keywords: AI-Driven Pricing, OTT Platforms, Dynamic Pricing, Consumer Behaviour, Price Fairness, Personalisation, Subscription Economy.