Cancellation vs Continuance on Subscription-Based Services: How Expected Utility Shapes User Decision
(A2025-126211)

AUTHORS

Pablo Antonio Muñoz-Gallego, Universidad de Salamanca; Marta Nieto-García, Universidad de Salamanca; Ismael Becerril-Castrillejo, Universidad de Burgos

ABSTRACT

The rise in subscription cancellation rates is becoming a prominent challenge for companies. This study delves into users’ decision making, particularly assessing inter-temporal dynamics as one of the factors behind subscription cancellation. Building on expected utility theory, we propose that future utility expectations -shaped by individual and markets- influence the continuance decision. We also analyse the moderating effect of user involvement with the service. We test our model with a 3-year household panel of subscription video on demand services (n=2.389). Our preliminary findings show that meeting heightened expectations can be challenging for companies and may undermine the long-term continuance decision. User involvement moderates this effect by accelerating or decelerating the cancellation process. By including expectations in the decision-making model and utilising a longitudinal dataset, we advance subscription services research and provide key managerial implications.