Webinar: Jordi McKenzie, Macquarie University - Now streaming! Cross-country evidence on in-home entertainment consumption

Melbourne Institute Seminar Series

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Title: Now streaming! Cross-country evidence on in-home entertainment consumption

Abstract: This study investigates consumption of entertainment content using modern streaming services.  Employing stated-preference choice experiments, we consider four alternative streaming types: 1) Transactional Video on Demand (TVoD); 2) Advertising-based Video on Demand (AVoD); 3) Illegal streaming (without anonymity); and 4) Illegal streaming (with anonymity).  We conduct separate analyses on consumers from US, UK, Germany, and France.  We observe broad evidence that consumption preferences across countries are consistent with both cultural and institutional features. For example, TVoD is popular among US consumers, AVoD is popular in the European counties, and illegal options are shunned in Germany where penalties are stringently enforced.  We find TVoD cross-price elasticity is stronger towards AVoD, relative to both illegal alternatives.  Broadly, consumers are tolerant of advertising in exchange for free content.  With respect to the illegal alternatives, increasing punishment probability appears to have little effect on consumption behaviour.  Relatedly, increasing the cost of anonymity for illegal consumption shifts consumers relatively more towards legal alternatives – in particular, AVoD.  We also collect incentive-based time and risk preference information using well-known behavioural experiments, along with other information concerning individuals’ histories, attitudes, and perceptions regarding illegal consumption.  We find strong evidence that illegal consumption history affects observed consumption decisions and some evidence that attitudes and perceptions are also relevant.  However, we find no evidence that behavioural preferences play any role, which supports the evidence from our choice experiments.

Presenter: Jordi McKenzie, Macquarie University

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