Measuring Consumer Preferences for Video Content Provision via Cord-Cutting Behavior

Jeffrey Prince, Shane M. Greenstein
2013 Social Science Research Network  
The television industry is undergoing a generational shift in structure; however, many demandside 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
more » ... or (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.
doi:10.2139/ssrn.2241680 fatcat:gfrakepxlvcjtgyri4ejrbubyq