No such thing as a free movie? Cross-country evidence on the potential impact of AVOD streaming services

Jordi McKenzie (), Paul Crosby, Alan Collins and Thorsten Chmura
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Jordi McKenzie: Macquarie University
Paul Crosby: Macquarie University
Alan Collins: Nottingham Trent University
Thorsten Chmura: Nottingham Trent University

Journal of Cultural Economics, 2025, vol. 49, issue 3, No 2, 407-433

Abstract: Abstract This study investigates potential disruption from advertising-based video-on-demand (AVOD) streaming for new-release in-home films. Using stated-preference discrete choice experiments on representative samples from four major countries, we model demand and examine substitution patterns between AVOD and the incumbent transactional video-on-demand (TVOD) model. In addition, we consider illegal streaming alternatives, including the possibility of using a VPN to provide anonymity of the unlawful activity. We find strong preferences for AVOD across each country sample, with large cross-price substitution patterns away from TVOD. An entry simulation exercise provides back-of-the-envelope estimates for ad pricing required to offset reduced revenues if AVOD were offered alongside TVOD for new-release in-home films.

Keywords: Video on demand; Digital distribution; Movie industry; Stated preference; Online piracy (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10824-024-09505-1

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