Video-Viewing Behavior in the Era of Connected Devices

Aniruddha Banerjee, James Alleman and Paul Rappoport
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Aniruddha Banerjee: Centris Marketing Science, USA

Communications & Strategies, 2013, vol. 1, issue 92, 19-42

Abstract: In the United States and elsewhere, traditional sources of television programming (or "pay TV") are facing rising competition from bypass or over-the-top ("OTT") alternatives in the form of streamed or downloaded access to video content. As a result, consumers of video content now fall into three segments: "cord loyalists" that continue to use pay TV exclusively, "non-pay TV" that includes consumers who have cut the video cord, i.e., dropped pay TV entirely in favor of OTT, and "cord couplers" that use both pay TV and OTT. Household demographics, use of connected OTT-capable devices, and availability of subscription-based and free streaming video services are hypothesized to influence how consumers choose to view video content. This paper reports on an empirical study of US households to answer two questions: (1) do households transition among the three OTT segments over time? and (2) what factors determine the household's decision to stay in, or move from, an OTT segment? Using a longitudinal survey panel of 7,655 unique households observed over three consecutive quarters in 2011 and relative risk ratios from multinomial choice models estimated using the data, the study confirms that connected devices (both their use and their variety) and certain key demographics (age, annual household income, and race/ethnicity) influence the household choice of OTT segment.

Keywords: pay TV; OTT; cord loyalists; non-pay TV; cord couplers; transition among OTT segments; household demographics; connected devices; relative risk ratio. (search for similar items in EconPapers)
JEL-codes: C35 D12 L82 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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