IDEAS home Printed from https://ideas.repec.org/p/zbw/tuiedp/138.html
   My bibliography  Save this paper

What drives binge-watching? An economic theory and analysis of impact factors

Author

Listed:
  • Gänßle, Sophia
  • Kunz-Kaltenhaeuser, Philipp

Abstract

Behavioral patterns in media consumption are changing. With the upcoming of video-on-demand platforms, so-called "binge-watching" gained broad awareness. To the best of our knowledge, this is the first economic analysis explicitly on binge-watching. We approach the phenomenon by arguing that it follows fundamental patterns of addictive behavior. By applying concepts of rational addiction and behavioral economics, we derive (i) a theoretical understanding of binging-watching behavior and (ii) factors increasing the likelihood of binging, especially with modern technologies and digital media services. The decision to binge depends on individual factors such as the accumulation rate of consumption capital (speed of learning and acquiring knowledge), opportunity costs, and the expected value of consumption. Consumption capital in the form of specific knowledge positively influences marginal utility. Moreover, binge-watching is not specific to online streaming services (video-on-demand), but modern platforms facilitate certain factors which increase the consumers' engagement. Non-linear, self-organized video scheduling and a single narrative (coherent plot) increase the likelihood for con-sumers to binge.

Suggested Citation

  • Gänßle, Sophia & Kunz-Kaltenhaeuser, Philipp, 2020. "What drives binge-watching? An economic theory and analysis of impact factors," Ilmenau Economics Discussion Papers 138, Ilmenau University of Technology, Institute of Economics.
    • Handle: RePEc:zbw:tuiedp:138
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/215812/1/1694670686.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Miguel Godinho de Matos & Pedro Ferreira, 2020. "The Effect of Binge-Watching on the Subscription of Video on Demand: Results from Randomized Experiments," Information Systems Research, INFORMS, vol. 31(4), pages 1337-1360, December.
    2. Frank J. Chaloupka & Michael Grossman & Warren K. Bickel & Henry Saffer, 1999. "The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research," NBER Books, National Bureau of Economic Research, Inc, number chal99-1, March.
    3. Budzinski, Oliver & Gänßle, Sophia & Kunz-Kaltenhäuser, Philipp, 2019. "How does online streaming affect antitrust remedies to centralized marketing? The case of European football broadcasting rights," Ilmenau Economics Discussion Papers 128, Ilmenau University of Technology, Institute of Economics.
    4. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    5. Adler, Moshe, 1985. "Stardom and Talent," American Economic Review, American Economic Association, vol. 75(1), pages 208-212, March.
    6. Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
    7. Lothar Mikos, 2016. "Digital Media Platforms and the Use of TV Content: Binge Watching and Video-on-Demand in Germany," Media and Communication, Cogitatio Press, vol. 4(3), pages 154-161.
    8. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1991. "Rational Addiction and the Effect of Price on Consumption," American Economic Review, American Economic Association, vol. 81(2), pages 237-241, May.
    9. Kenneth E. Train & Daniel L. McFadden & Moshe Ben-Akiva, 1987. "The Demand for Local Telephone Service: A Fully Discrete Model of Residential Calling Patterns and Service Choices," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 109-123, Spring.
    10. Victor Ginsburgh & David Throsby, 2006. "Handbook of the economics of art and culture," ULB Institutional Repository 2013/1673, ULB -- Universite Libre de Bruxelles.
    11. Budzinski, Oliver, 2012. "Empirische Ex-Post Evaluation von wettbewerbspolitischen Entscheidungen: Methodische Anmerkungen," Ilmenau Economics Discussion Papers 69, Ilmenau University of Technology, Institute of Economics.
    12. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    13. Jani Merikivi & Antti Salovaara & Matti Mäntymäki & Lilong Zhang, 2018. "On the way to understanding binge watching behavior: the over-estimated role of involvement," Electronic Markets, Springer;IIM University of St. Gallen, vol. 28(1), pages 111-122, February.
    14. Kelly Merrill Jr. & Bridget Rubenking, 2019. "Go Long or Go Often: Influences on Binge Watching Frequency and Duration among College Students," Social Sciences, MDPI, vol. 8(1), pages 1-12, January.
    15. Adler, Moshe, 2006. "Stardom and Talent," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 25, pages 895-906, Elsevier.
    16. Gaenssle, Sophia & Budzinski, Oliver, 2019. "Stars in social media: New light through old windows?," Ilmenau Economics Discussion Papers 123, Ilmenau University of Technology, Institute of Economics.
    17. Frank J. Chaloupka & Michael Grossman & Warren K. Bickel & Henry Saffer, 1999. "Introduction to "The Economic Analysis of Substance Use and Abuse: An Integration of Econometrics and Behavioral Economic Research"," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research, pages 1-14, National Bureau of Economic Research, Inc.
    18. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    19. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Budzinski, Oliver & Gänßle, Sophia & Lindstädt-Dreusicke, Nadine, 2021. "Wettbewerb und Antitrust in Unterhaltungsmärkten," Ilmenau Economics Discussion Papers 147, Ilmenau University of Technology, Institute of Economics.
    2. Gänßle, Sophia, 2020. "Big data comes to Hollywood: Audiovisuelle Medienmärkte im digitalen Zeitalter," Ilmenau Economics Discussion Papers 144, Ilmenau University of Technology, Institute of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Budzinski, Oliver & Kohlschreiber, Marie & Kuchinke, Björn & Pannicke, Julia, 2019. "Does music quality matter for audience voters in a music contest?," Ilmenau Economics Discussion Papers 122, Ilmenau University of Technology, Institute of Economics.
    2. Popovic, Milenko, 2009. "Dynamic Models of Arts Labor Supply," MPRA Paper 19397, University Library of Munich, Germany.
    3. Budzinski, Oliver & Gänßle, Sophia & Lindstädt-Dreusicke, Nadine, 2021. "Wettbewerb und Antitrust in Unterhaltungsmärkten," Ilmenau Economics Discussion Papers 147, Ilmenau University of Technology, Institute of Economics.
    4. Gaenssle Sophia & Budzinski Oliver & Astakhova Daria, 2018. "Conquering the Box Office: Factors Influencing Success of International Movies in Russia," Review of Network Economics, De Gruyter, vol. 17(4), pages 245-266, December.
    5. Wang Ruqu, 2007. "The Optimal Consumption and the Quitting of Harmful Addictive Goods," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-38, February.
    6. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    7. Hofmann, Julian & Clement, Michel & Völckner, Franziska & Hennig-Thurau, Thorsten, 2017. "Empirical generalizations on the impact of stars on the economic success of movies," International Journal of Research in Marketing, Elsevier, vol. 34(2), pages 442-461.
    8. Stephan Nuesch & Egon Franck, 2009. "The Role of Patriotism in Explaining the TV Audience of National Team Games—Evidence From Four International Tournaments," Journal of Media Economics, Taylor & Francis Journals, vol. 22(1), pages 6-19.
    9. Egon Franck & Stephan Nüesch, 2005. "Talent, Past Consumption and/or Popularity - Are German Soccer Celebrities Rosen or Adler Stars?," Working Papers 0005, University of Zurich, Center for Research in Sports Administration (CRSA), revised 2006.
    10. Budzinski, Oliver & Pannicke, Julia, 2017. "Does popularity matter in a TV song competition? Evidence from a national music contest," Ilmenau Economics Discussion Papers 106, Ilmenau University of Technology, Institute of Economics.
    11. Michael Grossman, 2005. "Individual Behaviours and Substance Use: The Role of Price," Advances in Health Economics and Health Services Research, in: Substance Use: Individual Behaviour, Social Interactions, Markets and Politics, pages 15-39, Emerald Group Publishing Limited.
    12. Milenko POPOVIĆ & Kruna RATKOVIĆ, 2013. "Oversupply Of Labor And Other Peculiarities Of Arts Labor Market," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 4(2), pages 204-230.
    13. Hofmann, Julian & Schnittka, Oliver & Johnen, Marius & Kottemann, Pascal, 2021. "Talent or popularity: What drives market value and brand image for human brands?," Journal of Business Research, Elsevier, vol. 124(C), pages 748-758.
    14. Manel Baucells & Rakesh K. Sarin, 2013. "Determinants of Experienced Utility: Laws and Implications," Decision Analysis, INFORMS, vol. 10(2), pages 135-151, June.
    15. de La Bruslerie, Hubert & Pratlong, Florent, 2012. "La valeur psychologique du temps : une synthèse de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(3), pages 361-400, Septembre.
    16. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    17. Olivier Gergaud & Vincenzo Verardi, 2021. "Untalented but successful? Rosen and Adler superstar Pokemons," Empirical Economics, Springer, vol. 60(5), pages 2637-2655, May.
    18. Frank Sloan & Lindsey Eldred, 2015. "Do preferences of drinker-drivers differ?," International Journal of Health Economics and Management, Springer, vol. 15(2), pages 241-268, June.
    19. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    20. Alex Imas & Sally Sadoff & Anya Samek, 2017. "Do People Anticipate Loss Aversion?," Management Science, INFORMS, vol. 63(5), pages 1271-1284, May.

    More about this item

    Keywords

    binge watching; video on demand; television; streaming; consumption capital; behavioural economics; media economics;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • Z10 - Other Special Topics - - Cultural Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:tuiedp:138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/ivtuide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.