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The characteristics of videos on demand for television programs and the determinants of their viewing patterns: Evidence from the Korean IPTV market

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  • Jo, Jee Hyung
  • Lee, Jong Hee
  • Cho, Shin

Abstract

Korea's video-on-demand (VOD) market is led by pay TV service providers, especially internet protocol television (IPTV) service providers, and VODs for television programs (TV-VOD) represent the largest share of VOD in the country. TV-VOD is therefore of strategic importance to providers in terms of their current sales share and future growth. Focusing on the time-shift characteristics of TV-VOD and the serial complementarity of television programs, this study examines how various factors such as the characteristics of paid vs. free VOD services, and the average and variance of broadcast ratings affect VOD viewing patterns. An empirical analysis was conducted using data for TV-VODs of all television programs broadcast by major Korean broadcasters in 2015. The key findings are as follows: (1) There is an inverted-U shape relationship between broadcast ratings and TV-VOD views. This implies that there exists a positive window effect between the original broadcast and TV-VOD, with an exceptional substitution effect in segments with very high ratings. (2) Even if the average ratings are similar, there are more VOD views for programs that have a large fluctuation in ratings between episodes, mainly due to serial complementarity. (3) In terms of the distribution of VOD views over time, the initial concentration is higher in paid VOD packages and dramas, which implies that immediate decay appears for TV-VOD content because of subscriber preferences for novelty and the serial nature of drama shows. The study concludes with various implications for VOD service providers and policy makers.

Suggested Citation

  • Jo, Jee Hyung & Lee, Jong Hee & Cho, Shin, 2020. "The characteristics of videos on demand for television programs and the determinants of their viewing patterns: Evidence from the Korean IPTV market," Telecommunications Policy, Elsevier, vol. 44(8).
    • Handle: RePEc:eee:telpol:v:44:y:2020:i:8:s0308596120300938
    DOI: 10.1016/j.telpol.2020.102001
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    1. Chakraborty, Debarun & Siddiqui, Mujahid & Siddiqui, Aaliyah & Paul, Justin & Dash, Ganesh & Mas, Francesca Dal, 2023. "Watching is valuable: Consumer views – Content consumption on OTT platforms," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    2. Jang, Moonkyoung & Baek, Hyunmi & Kim, Seongcheol, 2021. "Movie characteristics as determinants of download-to-own performance in the Korean video-on-demand market," Telecommunications Policy, Elsevier, vol. 45(7).

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