TV's Dirty Little Secret: The Negative Effect of Popular TV on Online Retail Sales
41 Pages Posted: 22 May 2014
Date Written: February 13, 2014
An ongoing debate questions whether TV viewers can spread their attention across multiple devices while watching TV. As a result, recent research has focused on understanding media cross-effects, particularly the relationship between TV viewing and simultaneous Internet usage. However, little attention has been given to TV viewership’s relationship with a very important economic activity: online shopping. This study examines whether online sellers need to account for exogenous effects, particularly popular TV, when predicting online sales. Applying an instrumental variable (IV) regression, where the presence of an unexpected disaster that is highly televised is used as the IV, we find evidence of a significant spillover effect between TV consumption and online sales. A lower level of interest in TV on the part of viewers leads to a significant increase in online sales, indicating that TV consumption and online sales for a large online retailer are substitutes for each other, rather than complements.
Keywords: Media Cross Effects, Second Screen, Two-Sided Markets, Electronic Commerce, Online Auctions, Attention Economy, Instrumental Variable Approach
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