Effects of Media Use Behavior on the Channel Bundle Preferences

This paper analyzes the factors that influence what kinds of preferences consumers display with respect to channel bundles provided by multichannel services (cable TV, DBS and IPTV) in Korea, focusing on consumers’ media use behaviors as key determinants. For the analysis, we use the mixed logit model and estimate the coefficients of interaction terms between household attributes and characteristics of the channel bundles offered by multichannel services. We find that households that prefer channel bundles composed of higher viewer-rating programs have a tendency to spend more time watching terrestrial broadcaster’s programs than other TV programs and allocate more time for surfing the internet; that households that prefer channel bundles featuring various genres are likely to spend more time surfing the internet and watching VOD via TV or other digital devices; and that single dwellers or married couples without children have preferences for channel bundles composed of more watched channels, while upper-income households are less sensitive to price.