Effects of Media Use Behavior on the Preference for Channel Bundling of Multichannel Services

20 Pages Posted: 31 Mar 2015 Last revised: 15 Aug 2015

Sangin Park

Seoul National University

Joohyoen Kim

Seoul National University

Date Written: August 15, 2015

Abstract

This paper analyzes the factors that influence the consumer’s preference for channel bundling of multichannel services (provided by Cable TV, DBS and IPTV) in Korea, focusing on the consumer’s media use behaviors as key determinants. For the analysis, we use the mixed logit model and estimate the coefficients of interaction terms between household attributes and channel bundle characteristics of the multichannel service. The micro data on household attributes including media use behavior comes from the Korean Media Panel survey conducted by Korea Information Society Development Institute (KISDI) in 2013, while the data on the characteristics of multichannel services were collected from the operators’ homepages, except viewer ratings which were provided by the Nielsen Korea, Inc..

We find that (i) households who preferred channel bundles composed of higher viewer-rating programs are those who spent more time watching terrestrial broadcaster’s programs than the other TV programs or who spent more time surfing the internet; (ii) households who preferred channel bundles composed of a variety of genres are those who spent more time watching VOD on TV or who spent more time either watching videos via PCs/mobile devices or surfing the internet; and (iii) single dwellers or married couples without children have preferences for the channel bundle composed of more watched channels, while upper-income households are less sensitive to the price.

Keywords: multichannel services, channel bundle, media use behavior, mixed logit model

JEL Classification: L82

Suggested Citation

Park, Sangin and Kim, Joohyoen, Effects of Media Use Behavior on the Preference for Channel Bundling of Multichannel Services (August 15, 2015). TPRC 43: The 43rd Research Conference on Communication, Information and Internet Policy Paper. Available at SSRN: https://ssrn.com/abstract=2586917 or http://dx.doi.org/10.2139/ssrn.2586917

Sangin Park (Contact Author)

Seoul National University ( email )

Seoul
Korea, Republic of (South Korea)

Joohyoen Kim

Seoul National University ( email )

Kwanak-gu
Seoul, 151-742
Korea, Republic of (South Korea)

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