Do DVRs Influence Sales?

33 Pages Posted: 28 Oct 2009 Last revised: 30 Jan 2010

Bart J. Bronnenberg

Tilburg University, CentER

Jean-Pierre Dubé

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Carl F. Mela

Duke University - Fuqua School of Business

Date Written: October 1, 2009

Abstract

We analyze a multimillion dollar, three-year field study sponsored by five firms to assess whether DVRs impact consumers’ shopping behavior for advertised and private label goods. A large sample of households received an offer for a free DVR and service and close to 20% accepted. We observe each household's shopping history for 48 consumer packaged goods categories during the 13 months prior and the 26 months following the DVR offer. We fail to reject the null of no DVR treatment effect on household spending on advertised branded or private label goods, either 1 or 2 years after the DVRs are shipped. Our predicted DVR effect is tightly centered around 0, suggesting the data may have sufficient power to identify a true null effect. Using advertising exposure information for seven of the brands in the study, we offer suggestive evidence that ad-skipping occurs for a relatively small fraction of the total television content viewed. Other potential explanations for the lack of a DVR effect are also discussed.

Keywords: Digital Video Recorder, advertising, field study, brand, consumer packaged goods

JEL Classification: L82, M37

Suggested Citation

Bronnenberg, Bart J. and Dubé, Jean-Pierre and Mela, Carl F., Do DVRs Influence Sales? (October 1, 2009). Chicago Booth Research Paper No. 10-08. Available at SSRN: https://ssrn.com/abstract=1494914

Bart J. Bronnenberg

Tilburg University, CentER ( email )

Warandelaan 2
Tilburg, 5037 AB
Netherlands
+31 13 466 8939 (Phone)
+31 13 466 8354 (Fax)

Jean-Pierre H. Dube (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 South Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://gsb.uchicago.edu/fac/jean-pierre.dube

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Carl F. Mela

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7767 (Phone)

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