Measuring Consumer Preferences for Video Content Provision via Cord-Cutting Behavior
AbstractThe television industry is undergoing a generational shift in structure; however, many demand-side determinants are still not well understood. We model how consumers choose video content provision among: over-the-air (OTA), paid subscription to cable or satellite, and online streaming (also known as over-the-top, or OTT). We apply our model to a U.S. dataset encompassing both the digital switchover for OTA and the emergence of OTT, along with a recession, and use it to analyze cord-cutting behavior (i.e., dropping of cable/satellite subscriptions). We find high levels of cord cutting during this time, and evidence that it became relatively more prevalent among low-income and younger households – suggesting this group responded to changes in OTA and streaming options. We find little evidence of households weighing relative content offerings/quality when choosing their means of video provision during the timespan of our data. This last finding has important ramifications for strategic interaction between content providers.
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Bibliographic InfoPaper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2013-09.
Date of creation: Oct 2013
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Telecommunications; Cord-cutting; video; digital switchover; online streaming; content;
Find related papers by JEL classification:
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-15 (All new papers)
- NEP-COM-2013-12-15 (Industrial Competition)
- NEP-ICT-2013-12-15 (Information & Communication Technologies)
- NEP-MKT-2013-12-15 (Marketing)
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