Paccar Hall, Room 394

Seminar Speaker: Uttara Ananthakrishnan
Affiliation: Carnegie Mellon University
Area: Information Systems

Name of Presentation: 
Much Ado About Streaming : Effect of Subscription based Video on Demand Platforms on Movie Sales

Abstract:
Subscription-based video on demand (SVOD) platforms have become major channels for consuming entertainment content in recent years. Content producers benefit from additional revenue generated through these streaming platforms. However, these streaming platforms may have a large-scale impact on existing content distribution channels in both the short and the long-term. In this paper, we assemble a unique and comprehensive dataset containing detailed movie-level information including price, sales, and other movie-level characteristics for 177 movie titles. This allows us to empirically measure the impact of streaming platforms on viewership and sales on traditional digital-sales platforms. We exploit the natural variation in the way movies enter and exit SVOD streaming windows in our identification strategy.

Using this model, we estimate that the cannibalization effect of SVOD streaming on digital sales is large and negative ranging from 60% to 80% depending on the streaming platform. We find that the effect remains stable within the streaming window and there is little heterogeneity. We also find that the displacement in sales persists even after the movies exit the streaming window.

To better understand the long-term displacement, we build a model of consumer choice both inside and outside the streaming period. We argue that when a movie enters a streaming platform, there is a high level of consumption due to zero-pricing and large-scale information diffusion by the streaming platform. This leaves fewer consumers who will purchase the movie in the post-streaming period, thus affecting the movie’s medium to long-term sales. We recover the relevant structural parameters that drive this post-window decline in sales.