The Impact of Time-Shift TV on TV Viewership and on Ad Consumption: Results from Both Natural and Randomized Experiments

33 Pages Posted: 19 Oct 2016  

Rodrigo Belo

Rotterdam School of Management, Erasmus University Rotterdam

Pedro Ferreira

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management; Carnegie Mellon University - Department of Engineering and Public Policy

Miguel Godinho de Matos

School of Business and Economics, Católica-Lisbon; Carnegie Mellon University

Filipa Reis

Catholic University of Portugal (UCP)

Date Written: September 19, 2016

Abstract

We partner with a major telecommunications provider to study the effect of Time-Shift TV (TSTV) on TV consumption. TSTV automatically records in the cloud programs that were broadcasted live for the past few days and thus allows users to watch the programs they want when they want. In 2012, our industrial partner deployed TSTV to half the TV channels it offered to premium consumers. Using difference-in-differences with Inverse Probability of Treatment Weighting we find that, on average, the introduction of TSTV increased the consumption of daily TV by 11 minutes (p < 0.01), from a baseline of 3.4 hours, and did not change the consumption of live TV. Furthermore, we find that the concentration of TV consumption increased after TSTV was available. In 2015, our industrial partner ran a randomized experiment in which a random set of households was selected to obtain access to a new set of TV channels broadcasting movies and TV shows. A random subset of these households obtained access to these channels with TSTV and another random subset of them obtained access to these channels without TSTV. Using difference-in-differences we find that, on average, the former set of households consumed 4.5 more minutes of TV per day (p < 0.01), from a baseline of 5.0 hours, and as much live TV as the latter set of households. In addition, the consumption of TV by the former set of households was more concentrated towards the most popular programs. Finally, we show that households do not seem to use TSTV as a new tool to strategically avoid ads. In particular, and in 2015, households given access to the new TV channels with TSTV exit ads in the original TV channels as much as the households given access to these channels without TSTV. Therefore, the concern of advertisers that TSTV may reduce their revenues is unwarranted. However, advertisers do not have data on TV audiences. Instead, content distributors do. Therefore, the latter are in a unique powerful position to deploy auction-based systems to sell TV ad slots taking advantage of the fine-grained information they have on TV viewership, much like websites do today online using cookies.

Keywords: TV, TSTV, DVR, TIVO, Randomized Experiment, Media

Suggested Citation

Belo, Rodrigo and Ferreira, Pedro and Godinho de Matos, Miguel and Reis, Filipa, The Impact of Time-Shift TV on TV Viewership and on Ad Consumption: Results from Both Natural and Randomized Experiments (September 19, 2016). Available at SSRN: https://ssrn.com/abstract=2854704

Rodrigo Belo

Rotterdam School of Management, Erasmus University Rotterdam ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

HOME PAGE: http://www.rsm.nl/people/rodrigo-belo/

Pedro Ferreira

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

Carnegie Mellon University - Department of Engineering and Public Policy ( email )

Baker Hall 129
5000 Forbes Ave
Pittsburgh, PA 15213
United States

Miguel Godinho de Matos (Contact Author)

School of Business and Economics, Católica-Lisbon ( email )

Palma de Cima
Lisbon, Lisboa 1649-023
Portugal

Carnegie Mellon University ( email )

Pittsburgh, PA 15213
United States

Filipa Reis

Catholic University of Portugal (UCP) ( email )

Palma de Cima
Lisboa, 1649-023
Portugal

Paper statistics

Downloads
42
Abstract Views
134