The Effect of Binge-Watching on the Subscription of Video on Demand: Results from Randomized Experiments

Information Systems Research (forthcoming)

55 Pages Posted: 2 Oct 2017 Last revised: 5 Jun 2020

See all articles by Miguel Godinho de Matos

Miguel Godinho de Matos

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

Pedro Ferreira

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

Date Written: Jun 05, 2020

Abstract

We analyze the outcomes of two randomized field experiments to study the effect of binge-watching on the subscription of Video-on-Demand (SVoD). In both cases, we offered access to SVoD to a random set of households for several weeks and used another random set of households as a control group. In both cases, we find that the households that binge watch TV shows are less likely to pay for SVoD after these free trials. Our results suggest that binge-watchers deplete the content of interest to them very quickly, which reduces their short-term willingness to pay for SVoD. We also show that recommendation reminders aimed at widening the content preferences of households offset the negative effect of binge-watching, and lessen the concerns of binge-watchers with lack of content refresh. We discuss that these recommendation reminders may help content providers manage supply costs, which may otherwise become prohibitive with frequent updates to SVoD catalogs.

Keywords: Binge Watching, Subscription-based Video-on-Demand, Recommendation Reminders, Randomized Experiment

Suggested Citation

Godinho de Matos, Miguel and Ferreira, Pedro, The Effect of Binge-Watching on the Subscription of Video on Demand: Results from Randomized Experiments (Jun 05, 2020). Information Systems Research (forthcoming). Available at SSRN: https://ssrn.com/abstract=3045568 or http://dx.doi.org/10.2139/ssrn.3045568

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

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

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