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Program substitutability in network television: Evidence from Argentina

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  • Carare, Octavian
  • Zentner, Alejandro

Abstract

Inference about television program substitutability from the consumer perspective is complicated by unobserved shocks to viewership and endogenous programming choices by television networks. High-frequency changes in program scheduling are commonplace in Argentina. This paper uses this variation in program scheduling as an instrumental variable in order to measure the degree of substitution across the programs broadcast by the five network television stations in a large Argentinean market. In line with the results of prior studies, the results of this paper show evidence of substantial business stealing in network television: increases in the ratings of a station primarily decrease the ratings of other stations. However, the estimates also show that the increases in ratings attributable to new viewers entering the market range between 3 and 5 percentage points for each 10-point increase in a channel’s viewership. The size of this market expansion effect is significantly larger than that found by prior studies.

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  • Carare, Octavian & Zentner, Alejandro, 2012. "Program substitutability in network television: Evidence from Argentina," Information Economics and Policy, Elsevier, vol. 24(2), pages 145-160.
    • Handle: RePEc:eee:iepoli:v:24:y:2012:i:2:p:145-160
    DOI: 10.1016/j.infoecopol.2012.02.004
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    More about this item

    Keywords

    Television; Substitution; Estimation; Instrumental variables;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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