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Return of the Movie Night? Analyzing the Impact of Netflix Subscriptions on Offline Movie Spending 2023-11-20

Subject:Return of the Movie Night? Analyzing the Impact of Netflix Subscriptions on Offline Movie Spending

Guest:Sihan Fang, PhD candidate, Nanyang Technological University

Host:WEI Xuan, Assistant Professor of ACEM

Time:Thursday, November 23, 2023,  13:30-15:00 pm.

Venue:Room N314, the New Shang Yuan, Xuhui Campus



The subscription-based business model is disruptive in the copy-right industries. More than a digitalized distribution channel, it fundamentally transforms both supply and demand sides by offering new forms of content creation, provision, and consumption. However, the effects of these business models on the local offline industry are less well-understood, especially in the case of the motion picture industry. This study investigates the impact of the subscription-basedbusiness model on offline activity consumption in the motion picture industry. Leveraging a unique dataset with individuals’ every transaction record and a difference-in-differences approach, we show that Netflix subscription interestingly increases offline movie consumption. Based on the argument that individuals have unmet social and hedonic demands that are imperfectly met by subscription-based services like Netflix, we show that offline movie consumption actually increases post-subscription, accompanied by social and hedonic activities like dining and entertainment spending. We also provide evidence that the identified effect on offline movie consumption is more pronounced for individuals with higher social (i.e., lower-income people) and hedonic (i.e., younger people) needs. Our work provides clear implications for managers and policy makers who are involved in both subscription-based platforms like Netflix and the traditional offline movie industry. In addition, we provide theoretical implications for the study of subscription-based platforms, imperfect substitution of channels, and the role of social and hedonic value in technology-supported platforms.

Guest Bio:

Sihan Fang is a Ph.D. candidate in Information Systems at Nanyang Business School (NBS). Prior to joining NBS in 2019, she received her master’s degree in Business Analytics from the University of Hong Kong and B.S. in Accounting from Shandong University.

Her research focuses on understanding the impact of digital innovation on consumer behaviour, which is under revision and review in premier academic journals. She has previously presented her work at ICIS, PACIS, AOM, SCECR, CSWIM, and ISMS Marketing Science Conference. She has received several awards, including ICIS Doctoral Consortium 2023 and AOM Best Division Paper Award Runner Up 2022. She is also shortlisted for the ISS Clusters Best Paper Award at INFORMS Annual Meeting 2023.