What Drives Binge-Watching? An Economic Theory and Analysis of Impact Factors

Ilmenau Economics Discussion Papers, Vol. 26, No. 138, April 2020

30 Pages Posted: 9 May 2020

See all articles by Sophia Gaenssle

Sophia Gaenssle

Ilmenau University of Technology

Philipp Kunz-Kaltenhäuser

Ilmenau University of Technology

Date Written: April 15, 2020

Abstract

Behavioral patterns in media consumption are changing. With the upcoming of video-on-demand platforms, so-called ‘binge-watching’ gained broad awareness. To the best of our knowledge, this is the first economic analysis explicitly on binge-watching. We approach the phenomenon by arguing that it follows fundamental patterns of addictive behavior. By applying concepts of rational addiction and behavioral economics, we derive:

(i) a theoretical understanding of binge-watching behavior and

(ii) factors increasing the likelihood of binging, especially with modern technologies and digital media services.

The decision to binge depends on individual factors such as the accumulation rate of consumption capital (speed of learning and acquiring knowledge), opportunity costs, and the expected value of consumption. Consumption capital in the form of specific knowledge positively influences marginal utility. Moreover, binge-watching is not specific to online streaming services (video-on-demand), but modern platforms facilitate certain factors which increase the consumers’ engagement. Non-linear, self-organized video scheduling and a single narrative (coherent plot) increase the likelihood for consumers to binge.

Keywords: Binge Watching, Video on Demand, Streaming, Television, Consumer Behavior, Consumption Capital, Behavioural Economics, Media Economics

JEL Classification: D03, D11, D90, L82, Z10

Suggested Citation

Gaenssle, Sophia and Kunz-Kaltenhäuser, Philipp, What Drives Binge-Watching? An Economic Theory and Analysis of Impact Factors (April 15, 2020). Ilmenau Economics Discussion Papers, Vol. 26, No. 138, April 2020, Available at SSRN: https://ssrn.com/abstract=3576598 or http://dx.doi.org/10.2139/ssrn.3576598

Sophia Gaenssle (Contact Author)

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

Philipp Kunz-Kaltenhäuser

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

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