As the “on-demand” suggests, SVOD services are designed to allow viewers to watch TV how they want and when they want. With thousands of series at their fingertips, many viewers choose to “binge” watch content, consuming multiple episodes in one sitting.

But research suggests that giving viewers exactly what they want can backfire.

Pedro Ferreira is an associate professor in the department of engineering and public policy at Carnegie Mellon University. In 2020, he co-authored a paper entitled “The Effect of Binge-Watching on the Subscription of Video on Demand”. 

Ferreira’s research found that binge-watching can have a negative impact on SVOD platforms’ subscriber rates.

“With binge-watching, people consume entire seasons in a matter of days and all the seasons of the same TV show in a few weeks. Once they do so, they are more likely to quit service or, for example, abandon a free trial. Our research shows that binge watching can reduce SVoD subscription as much as 10 percent,” Ferreira said. 

Some SVOD platforms, in particular Netflix, will release all the episodes of an original series at one time. Something which allows viewers to binge-watch new content as well as back catalogues of TV on the platform. 

As the largest SVOD platform in the world, Netflix set the standard for how subscription services release content. However, newer players coming onto the scene have since eschewed the tactic established by Netflix of releasing all episodes in one go. 

Having a more gradual release schedule does make sense for these services, says Rahul Patel, a senior analyst at Ampere Analysis. 

“A lot of the newer services, like Disney+ and Apple TV Plus, have been releasing their shows weekly,” said Patel, “And I think as a mechanism to fight against the threat of subscriber churn, the logic is fairly sound. Drawing out a show’s release over two or three months increases the ability to monetise users. If a consumer wants to see that content as it’s released, that will require them to subscribe for a longer period.”

Netflix has a huge back catalogue of well-known originals for viewers to consume, but for smaller services, slower release schedules can be particularly impactful. 

“I think it’s definitely a good strategy for these new platforms in particular. These platforms typically have less developed slates of content, and they’re releasing fewer originals per month compared to Netflix and Amazon,” he said. 

Keeping the viewer on the service for longer periods of time through a gradual release schedule has additional advantages for retaining subscribers. 

“This repeated interaction with the platform is likely to get them to browse additional content that may then interest them. Then in the process and organically, users end up getting exposed to more content, realising more value from their subscription,” said Pedro Ferreira.

Beyond the release schedule

A more gradual release schedule is one obvious way that SVOD services can prevent viewers from bingeing and then unsubscribing, but there are other ways in which platforms can prevent this behaviour. 

“Our research also shows that one way to mitigate this effect is to issue recommendations to users pointing them to other titles in the SVoD catalogue that they would not otherwise search for or know about. This way, the platform may keep users engaged for longer periods of time and thus avoid churn,” said Pedro Ferreira. 

“Some of the most effective recommender systems for movies and TV shows work by suggesting titles to watch that “people like you” have been watching but you have not, where “people like you” are identified as people that have been watching the same titles as you,” added Ferreira. 

Recommendation mechanisms may be an effective way to keep users on the platform, but in order to do this SVOD platforms must have the content to tempt users to move onto other shows. 

“Consumers usually have a hard time searching for content when there is too much of it to browse through. This is when recommendations work well. They reorder titles showing first the most promising ones to each user,” said Ferreira, “Also, recommendations work better if there are enough users on the platform to learn from. In sum, a provider with few users and a small catalogue will have a very hard time if it allows for binge-watching, even with recommendations.”

Rahul Patel says that discounts over a period of time can be another way to retain users. 

“One strategy, not necessarily related to content offering, can be a discounted rate across the year, which is something we’ve seen Disney+ employ. That can work to essentially lock consumers into a 12 month contact,” he said. 

Is streaming hinged on binge? 

Is the ability to binge-watch a new show something that consumers have come to expect from SVOD services? 

“One of the questions we include in a survey, which we run every two quarters, is do you agree with the statement that ‘I watch several episodes of a TV show back to back’? So essentially, asking consumers if they binge watch,” said Ampere’s Patel, “And the interesting thing is that respondents agreeing with that sentiment was generally rising from late 2015, up to 2019. But since then, it’s actually started to decrease a bit.”

Binge watching is not necessarily something that has become embedded in viewers’ behaviour, says Rahul Patel.

“For decades, people have been watching weekly releases for their top new shows.It’s only when Netflix started releasing originals that binge-behaviour for new content became quite common,” he said. 

Source: https://www.publishersweekly.com/pw/by-topic/columns-and-blogs/soapbox/article/88406-digitization-can-support-publishers-with-decision-making.html

According to the “Global Book Publishers Market Report (2021 to 2030): Covid 19 Impact and Recovery,” worldwide sales of e-books are predicted to grow at a compound annual growth rate of 11.7% in the forecast period. This continues a trend that started in 2008 with the introduction of e-reading devices, most prominently Amazon’s Kindle.

Looking at the volume of e-books released each year since 2008, many titles are published directly on self-publishing platforms such as Smashwords or Kindle Direct Publishing. This has created a plethora of new information for traditional publishers—not only about which books are released but also about how individual titles, authors, and entire genres are perceived by readers.

In new research with my colleague Imke Reimers from Northeastern University, we studied how publishers use the information generated through digitization—such as online reviews, detailed bestseller lists, and download figures—to make decisions. Platforms such as Amazon and Goodreads, as well as services such as BookScan or Bookstat, provide new sources of data that can be tapped to make decisions about which authors to work with and which manuscripts to buy.

Using data on almost 50,000 book deals over a period of 12 years starting in the early 2000s, we looked at how digitization has affected the relationships between authors and publishers. In particular, we studied how the advances that authors receive for individual titles or series changed after 2008. As we looked at the data, it became clear that one genre is much more affected by digitization than others: romance and erotica.

No other genre is published as frequently in the e-book format, and no other genre is published as frequently on self-publishing platforms. Likewise, no other genre has seen as many works with a self-publishing background appear on USA Today’s bestseller lists.

So we compared how advances to romance authors changed relative to advances paid to authors who write in other genres. This comparison allowed us to isolate the effect of digitization from other industry trends.

First, we found that advances to romance authors increased by about 20% after the introduction of the Kindle, compared to advances to authors in other genres. We identified two possible explanations for this rise. On the one hand, it might have been driven by a relative improvement of the authors’ bargaining power, given that they now had the option to circumvent traditional publishers and use self-publishing platforms to find their audiences. Alternatively, it could have been driven by an increase in demand for romance books after spectacular hits such as Fifty Shades of Grey.

Secondly, we found that publishers benefitted from the data that became available to them as a result of digitization. To explore this, we took our analysis one step further and asked whether the authors involved in the book deals we reviewed eventually turned out to be successful in the market. This allowed us to study whether publishers’ predictions about manuscripts’ market potential (which we approximate with the size of advances to authors) are accurate.

Strikingly, we found that publishers made relatively fewer errors when choosing manuscripts after the arrival of Kindle, and these improvements are again more substantial for romance authors. This is true for both types of errors: false positives (high advances for manuscripts that eventually flop) and false negatives (low advances for manuscripts that eventually become bestsellers).

In addition, based on regression analyses that estimate whether a book from a deal becomes a bestseller, we found that an advance to a romance author can predict a book’s success at making USA Today’s top 150 bestseller list 33% more accurately, relative to before 2008 and to authors in other genres. This led us to conclude that digitization has made book publishing more efficient.

Finally, we found that publishers that are more likely to invest resources in data analytics (as measured by relevant job postings) see the largest improvements in prediction.

In summary, our research shows the multidimensional effects of digitization in book publishing. While the availability of self-publishing platforms may have hurt traditional publishers’ bargaining power with authors, the increased availability of information has in turn proved advantageous to publishers. And publishers that have the resources to make sense of the data provided by digitization are in a better position to decide which potential investments are more likely to become successful as opposed to those with only marginal appeal.

Christian Peukert is associate professor of digitization, innovation, and intellectual property at HEC Lausanne. The study “Digitization, Prediction and Market Efficiency: Evidence from Book Publishing Deals” was published online on Jan. 12, 2022, by the journal Management Science.

People looking forward to binge watching their favorite TV shows over the holidays could be surprised to find that it’s not only bad for streaming platforms, but also negatively impacts their personal viewing experience.

Jeff Galak, associate professor of marketing at Carnegie Mellon University’s Tepper School of Business, has found that bingers tend to watch too quickly for their own good.

“When people are allowed to consume enjoyable experiences like TV shows at their own pace, they experience a lot of what we call ‘hedonic decline,’” Galak said. This idea of “hedonic decline” speaks to how enjoyment of once loved experiences decreases with repetition.

“On the other hand, when people are forced to slow down how quickly they consume, they tend to keep enjoying their favorite experiences for much longer,” Galak said. “For streaming services with a slower viewing schedule, viewers actually will enjoy what they’re watching more, and across a longer period of time.”

Because their enjoyment doesn’t decline, Galak said people will keep watching more episodes and seasons before quitting. Additionally, by virtue of the fact that they’re going through a season at a slower pace, they can enjoy a TV show for a longer time period.

Galak’s colleague Pedro Ferreira, associate professor of information systems in CMU’s Heinz College of Information Systems and Public Policy, said many streaming services bought into binge watching as a way to get consumers in front of the screen as much as possible. But even with platforms’ deep catalogues, consumers still have limited time and specific preferences on what they’d like to watch. As binge watchers keep returning to a platform to search for more content, Ferreira said they will eventually see the quality of their matches diminish, which could lead them to cancel their service.

A viewer watching Netflix on a laptop”However, it would be difficult to take binge watching away from consumers now because they are used to this high intensity consumption,” Ferreira said. “But if one platform does it, then I think all platforms will do it. Everybody is realizing right now that you don’t have enough content to feed the interests of binge watchers.”

Ferreira and Galak also point to the obvious: Binge watching allows consumers to rapidly consume the content they want to watch and, in turn, cancel their subscription earlier than they might otherwise.

Some platforms, such as Disney+ with “The Mandalorian,” are releasing shows on an episode-by-episode basis, and that could help keep viewers for a longer period of time. But Ferreira said a once-a-week release might not be enough to motivate viewers to keep watching. He said there likely is an optimal cadence between a once-a-week release and releasing an entire season at once to keep viewers hooked.

“If a new subscriber can binge watch everything of interest to them inside of a platform’s free trial period, then they might never pay a subscription fee,” Ferreira said. “That is impacting the industry quite dramatically.”

Source: https://medium.com/mit-initiative-on-the-digital-economy/algorithms-as-editors-2784f2c120dc

Algorithms can be better than human editors at predicting what news stories people will read online — but the advantage has distinct limits and can lead readers to consume a less diverse mix of news.

Those are two key findings of new research by a team studying how use of artificial intelligence (AI) impacts consumption of online news.

The main takeaway from the work is that humans and algorithms can complement one another, said Ananya Sen, a postdoctoral student at MIT’s Initiative on the Digital Economy, who conducted the study with Joerg Claussen of the Munich School of Management, and Christian Peukert of the Catolica-Lisbon School of Business and Economics. Human editors, for instance, consistently do a better job than algorithms when there’s an unexpected breaking news story, since there’s limited data on breaking news that can help guide the machines.

Strategic Advantage?

“Data can give [a news organization] some level of strategic advantage,” said Sen, “but it doesn’t seem to be a runaway hit that will give you dominance in the market.”

In a new paper, The Editor vs. the Algorithm: Targeting, Data and Externalities in Online News, published in June, the researchers laid out how they tested their ideas at an unnamed German news organization which receives more than 20 million unique visitors to its website each month. “It is important to note that it is rare for major legacy news outlets in the world to experiment with algorithmic curation of their homepage,” the researchers wrote in the paper. It is a new field of research.

The researchers separated a control group of readers — which saw the organization’s website as assembled by human editors — and a “treatment group,” which saw a version in which one of the four slots on the page was personalized using an algorithm that studied the reader’s preferences.

Diminishing Economic Returns

At first, when there’s limited data on where readers click, the humans outperform the algorithm — meaning they do a better job of picking stories that readers are more likely to click on to read. But this shifts as the number of visits grows and the algorithm gains insight on what people prefer to read. Starting at around 10 visits, the algorithm and the editor perform roughly equally. But as data piles up, the algorithm pulls ahead. Nonetheless, there’s a limit to the gains. The researchers found that after about 50 website visits, there’s a decreasing economic return from this growing trove of data. (See Figure 1).

“Overall, the algorithm outperforms the human editor when it has access to sufficient data though in the early stages, the human is better at predicting the average taste of readers,” the researchers note.

“Therefore, the optimal strategy for a news outlet seems to be to employ a combination of the algorithm and the human to maximize user engagement.”

The findings have implications for anti-trust and market power issues associated with online platforms. The fact that there are diminishing economic and revenue returns from access to individual user data suggests there are limited strategic and financial advantages for firms that gather it. In addition, if privacy concerns lead to limits on how much of this data firms can gather and hold, the results suggest such limits shouldn’t hamper the performance of algorithms.

Built-in Bias

The study also looked at the potential downside of predicting reader preferences using AI. “The news is different from a standard product because of its public-good nature,” the authors wrote. “In particular, the algorithm is trained on prior individual-level data, which is ‘biased’ toward personal preferences and could be at odds with ‘socially optimal’ reading behavior.”

The researchers discovered that readers who had articles selected by the algorithm were more likely than those in the control group to read articles similar to those recommended. In other words, the algorithm tended to reinforce the “bubble” around readers, as they opted to read a narrower set of topics than they might have otherwise.

The researchers also sought to assess the characteristics of readers who are prone to “go down the rabbit hole” and reduce the variety of stories they read.

One example of this trend can be seen in voting patterns. The researchers discovered that readers who lived in German states where there was a high share of votes for extreme political parties — both left and right wing — in the last election were more likely to increase their consumption of political stories when their stories were selected by the algorithm. In addition, readers in regions with higher voter turnout — a proxy for being more informed — were less likely to increase their share of political news.

Sen said these findings show that there’s a limit to the power of algorithms. “When you use recommendation algorithms you don’t see the 40% or 50% rise in engagement that some researchers have hypothesized,” he said, which means the best tools going forward will remain a mix of human and machine.

A study by researchers at three universities in the US, Netherlands and Portugal has found that contrary to received wisdom, people with time-shift TV capability did not watch less live TV and they did not watch fewer advertisements.

Moreover, the The Impact of Time Shifting on TV Consumption and Ad Viewership study found that with time-shift viewers consumed slightly more TV overall than they did before having the technology.

The researchers at Carnegie Mellon University, Erasmus University Rotterdam, and Católica Lisbon School of Business and Economics, based their findings on a study using a randomised control trial that involved cable customers from more than 50,000 households. Some of the households were given premium TV channels, which included popular films and shows without commercial breaks, for six weeks. In some of those households, consumers were given access to time-shift TV, which the researchers said allowed them to observe the effect of the technology on consumers’ consumption of TV.

Overall, the study revealed that having time-shift technology did not change the amount of time consumers viewed live TV but boosted the concentration of total TV viewership because viewers used the technology disproportionately more to watch popular programmes.

Households in the research’s control condition watched, on average, 5.0 hours of TV per day and 58% of them used time shifting at least once during an 11-day pre-experimental period. General purpose channels such as national free-to-air accounted for most of the viewership, both in live and in time shifting, followed by entertainment, news, and children’s viewing.

General purpose and entertainment channels were also found to capture a disproportionate larger viewership share in time shifting than in live TV and conversely for news and sports channels. The researchers said that this was expected given that the value of the latter types of content was extremely time dependent. That is, it was highest when consumed live and decreases quickly after the original broadcast. By contrast, films and TV shows remained valuable to viewers for much longer after their original broadcast.

On average, 80% of the programmes watched using time shifting aired in the previous 48 hours. The analysts noted that this short lag between original broadcast time and time-shift consumption suggested that time shifting was mostly used to catch-up on content missed recently. This time was larger for time-sensitive content, such as sports and news, and smaller for entertainment and general-purpose content, which supported the idea that time shifting is more valuable for the latter types of content.

The technology didn’t change the consumers’ behaviour towards watching advertisements when they watched the original TV channels live, suggesting that consumers didn’t use the technology to strategically avoid advertisements.

“Advertisers have been concerned that using time-shift TV would decrease the amount of time people spend watching live TV, which would reduce their exposure to ads,” remarked Pedro Ferreira, associate professor of information systems at Carnegie Mellon’s Heinz College of Information Systems and Public Policy commenteing on The Impact of Time Shifting on TV Consumption and Ad Viewership studyhe Impact of Time Shifting on TV Consumption and Ad Viewership study. “Our findings should interest advertisers as well as cable companies and producers of TV content. Our study showed that having time-shift TV technology didn’t reduce the amount of time people spend watching live TV. In addition, we also showed that people aren’t abandoning ads more frequently even when they have time-shift TV.”

In fact, the study finds that people watch slightly more TV overall than they did before having the technology, which allows people to watch TV shows they missed without presetting devices to record them.

“Advertisers have been concerned that using time-shift TV would decrease the amount of time people spend watching live TV…”

“Advertisers have been concerned that using time-shift TV would decrease the amount of time people spend watching live TV, which would reduce their exposure to ads,” explains coauthor Pedro Ferreira, associate professor of information systems at Carnegie Mellon University’s Heinz College of Information Systems and Public Policy. “Our findings should interest advertisers as well as cable companies and producers of TV content.”

The researchers used a randomized control trial that involved cable customers from more than 50,000 households. Some of the households received premium TV channels, which included popular movies and shows without commercial breaks, for six weeks. In some of those households, consumers also got access to time-shift TV, which allowed the researchers to observe the effect of the technology on consumers’ consumption of TV.

The study found that on average, having access to the premium channels with time-shift TV increased households’ total consumption of TV through viewership of both live and previously aired programs. Having time-shift technology did not change the amount of time consumers viewed live TV but boosted the concentration of total TV viewership because viewers used the technology disproportionately more to watch popular programs.

“…people aren’t abandoning ads more frequently even when they have time-shift TV.”

The study also found that people used time-shift TV more frequently for watching TV programs and movies, and not as frequently for watching sports and news. The technology didn’t change the consumers’ behavior towards watching advertisements when they watched the original TV channels live, suggesting that consumers didn’t use the technology to strategically avoid advertisements.

“Our study showed that having time-shift TV technology didn’t reduce the amount of time people spend watching live TV. In addition, we also showed that people aren’t abandoning ads more frequently even when they have time-shift TV,” says Pedro Ferreira.

The study appears in Management Science. Additional researchers who contributed to the work came from Carnegie Mellon University, Erasmus University Rotterdam, and Católica Lisbon School of Business and Economics.

Source: https://www.engadget.com/2019-02-11-dvr-time-shifting-not-ad-killer.html

Time-shifting set-top boxes from the likes of TiVo are often referred to as “ad-skipping technology,” but apparently that’s not quite the case. People that use the devices apparently watch the same number of ads that they did before getting the tech and watch the same amount of live TV, according to a new study. Overall, users do watch a bit more TV, but their viewing habits don’t really change all that much.

The study, from Carnegie Mellon University, Erasmus University Rotterdam and Catolica Lisbon School of Business, used a randomized control trial of over 50,000 cable customers. In some of those households, customers were given access to premium TV channels, including popular movies and TV shows without commercial breaks. Within that group, some household could use time-shift TV, letting the researchers observe how the tech changed their viewing habits.

Advertisers have been concerned that using time-shift TV would decrease the amount of time people spend watching live TV, which would reduce their exposure to ads. Our findings should interest advertisers as well as cable companies and producers of TV content.

Households with time-shifting technology and premium channels watched more TV, both live and previously aired programs. However, it didn’t change how much live TV viewers saw overall, because they “disproportionately used [time-shift technology] to watch the more popular programs, which increase[d] the concentration of overall TV consumption,” according to the study.

The team found that time-shift TV was used more often for TV shows and movies, not sports and news. Furthermore, consumers didn’t use it to avoid ads when they watched non-premium content live.

The researchers noted some limitations in the results, mainly that they may not apply regions outside the (unnamed) study region. However, they note that time-shifting was used about as often in the study country as it is in France, the UK and the US. The experiment also ran for a short time (six weeks), and once consumers get used to time-shifting, they may start using it more often to skip ads or watch less live TV, the study said.

Overall, though, it’s a bit of an eye-opener about user viewing habits. “Advertisers have been concerned that using time-shift TV would decrease the amount of time people spend watching live TV, which would reduce their exposure to ads,” said CMU study co-author Pedro Ferreira. “Our findings should interest advertisers as well as cable companies and producers of TV content.”

Time-shift television, a technology that allows people to watch TV shows they missed without presetting devices to record content, is becoming more widely available, giving those with the feature the opportunity and flexibility to view previously aired programs. A new study looked at whether this technology has affected how people watch TV. The study found that people with time-shift TV watched slightly more TV overall than they did before having the technology; they did not watch less live TV, and they did not watch fewer advertisements.

The study, by researchers at Carnegie Mellon University, Erasmus University Rotterdam, and Católica Lisbon School of Business and Economics, is published in Management Science.

“Advertisers have been concerned that using time-shift TV would decrease the amount of time people spend watching live TV, which would reduce their exposure to ads,” explains Pedro Ferreira, associate professor of information systems at Carnegie Mellon University’s Heinz College of Information Systems and Public Policy, who coauthored the study. “Our findings should interest advertisers as well as cable companies and producers of TV content.”

The researchers used a randomized control trial that involved cable customers from more than 50,000 households. Some of the households were given premium TV channels, which included popular movies and shows without commercial breaks, for six weeks. In some of those households, consumers were also given access to time-shift TV, which allowed the researchers to observe the effect of the technology on consumers’ consumption of TV.

The study found that on average, having access to the premium channels with time-shift TV increased households’ total consumption of TV through viewership of both live and previously aired programs. Having time-shift technology did not change the amount of time consumers viewed live TV but boosted the concentration of total TV viewership because viewers used the technology disproportionately more to watch popular programs.

The study also found that time-shift TV was used more frequently for watching TV programs and movies, and not as frequently for watching sports and news. The technology didn’t change the consumers’ behavior towards watching advertisements when they watched the original TV channels live, suggesting that consumers didn’t use the technology to strategically avoid advertisements.

“Our study showed that having time-shift TV technology didn’t reduce the amount of time people spend watching live TV. In addition, we also showed that people aren’t abandoning ads more frequently even when they have time-shift TV,” says Pedro Ferreira.