Video-Viewing Behavior in the Era of Connected Devices

Communications & Strategies, No. 92, 4th Quarter 2013, pp. 19-42

24 Pages Posted: 31 Jul 2014

See all articles by Aniruddha Banerjee

Aniruddha Banerjee

Centris Marketing Science

James Alleman

University of Colorado at Boulder

Paul Rappoport

Temple University - Department of Economics

Date Written: December 1, 2013

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.

JEL Classification: C35, D120, L820

Suggested Citation

Banerjee, Aniruddha and Alleman, James and Rappoport, Paul, Video-Viewing Behavior in the Era of Connected Devices (December 1, 2013). Communications & Strategies, No. 92, 4th Quarter 2013, pp. 19-42, Available at SSRN: https://ssrn.com/abstract=2463719

Alexandre Jolin (Contact Author)

IDATE ( email )

BP 4167
Montpellier cedex 5, 34092
France
0467144444 (Phone)

Aniruddha Banerjee

Centris Marketing Science

755 Business Center Dr
Horsham, PA 19044
United States

James Alleman

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO CO 80309
United States

Paul Rappoport

Temple University - Department of Economics ( email )

Philadelphia, PA 19122
United States

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