TV Channel Search and Commercial Breaks

Song Yao, Wenbo Wang and Yuxin Chen
Article Snapshot
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TV Channel Searches During Commercial Breaks
Key Takeaways

​What? Viewers are more likely to search alternative channels during commercial breaks, especially when their current shows' quality deteriorate.

So What? Channel programmers need to consider how to time commercial breaks in face of competing channels.

Now What? High-rated channels should differentiate timing from their competitors while low-rated channels should schedule commercials for similar times as their competition.

Article Snapshot​s: Executive Summaries from the Journal of Marketing Research

This paper investigates how viewers search alternative channels during the commercial breaks of their current channels and the implications for channels in terms of how to manage the timing of breaks strategically.


Research Question
We investigate time lapses that interrupt product consumption. Preeminent examples are commercial breaks during television or radio programming. We suggest that breaks facilitate consumers searching for alternatives. Specifically, when there is so much uncertainty that consumers are unclear about utility levels of different products, they engage in costly search to resolve the uncertainty. For TV programming, breaks lower the opportunity cost of search, allowing the consumer to sample alternative channels without further interrupting the viewing experience on her current channel.

Methods
Using data from the Chinese TV market, we estimate a sequential search model to understand consumer TV channel choice behavior. The data contain a quasi natural experiment due to the Chinese government banning in-show commercial breaks. Consequently we are able to estimate how viewers behave differently before and after the ban.

Findings

We find that low-rated channels should try to synchronize their breaks with high-rated ones. Doing so lowers the expected return of searching alternatives during breaks, because other channels will also air commercials at the same time. In contrast, a high-rated channel should differentiate so as to poach viewers from competing channels that are on commercial breaks. Meanwhile, it loses less viewers to competitors during its own commercial breaks.

Implications

The results offer strategies for timing of advertisements beyond televisions. The study has implications for any kind of a pause in the availability of a product. For example, video-game manufacturers might benefit if they synchronize the release of new games. Popular video games (i.e. Call of Duty) will garner more players if they release at separate times from popular competitors, so consumers can focus on one game. For mobile apps and games, where developers release upgrades or new features periodically, carefully timing the breaks between such releases could help keep their audiences interested. This is more than just television commercials, it is about acknowledging that customers often need breaks to learn about the new product features. Those breaks can't be too long though as customers may bore or find other products/activities to fill their time. 

Questions for the Classroom

  • Do viewers tend to switch away during commercial breaks?
  • Do they switch back after the commericals end?
  • Depending on the answers above, how do you think a high-rated channel should time its commercial breaks? How about a low-rated channel?

Article Citation: Song Yao, Wenbo Wang, and Yuxin Chen (2017) TV Channel Search and Commercial Breaks. Journal of Marketing Research: October 2017, Vol. 54, No. 5, pp. 671-686

doi: http://dx.doi.org/10.1509/jmr.15.0121 


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Song Yao, Wenbo Wang and Yuxin Chen
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