Do DVRs Influence Sales?
Bart J. Bronnenberg
Tilburg University, CentER
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
Carl F. Mela
Duke University - Fuqua School of Business
October 1, 2009
Chicago Booth Research Paper No. 10-08
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.
Number of Pages in PDF File: 33
Keywords: Digital Video Recorder, advertising, field study, brand, consumer packaged goods
JEL Classification: L82, M37
Date posted: October 28, 2009 ; Last revised: January 30, 2010