The Consumer Gains from Direct Broadcast Satellites and the Competition with Cable Television

The Consumer Gains from Direct Broadcast Satellites and the Competition with Cable Television
Author: Austan Goolsbee
Publisher:
Total Pages: 39
Release: 2001
Genre: Cable television
ISBN:
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This paper examines the introduction of Direct Broadcast Satellites as an alternative to cable television and the welfare gains such satellites generated for consumers. The extent to which satellites compete with cable has become an important issue in the debate over re-regulation of cable prices. We estimate a consumer level demand system for satellite, basic cable, premium cable and local antenna using extensive micro data on the television choices of more than 15,000 people as well as price and characteristics data on cable companies throughout the nation. The results indicate that, after properly controlling for unobservable product attributes and the endogeneity of prices, the direct welfare gain to satellite buyers averages about $50 dollars per year or approximately $450 million annually in the aggregate. Estimates that do not control for unobserved attributes and endogenous prices overstate the welfare gains by almost a factor of fifteen. The price sensitivity of satellite to both its own price and the price of cable is extremely high. The price sensitivity of cable, however, is low, likely indicating that satellite is not a close substitute at the time of our sample

Competition Between Cable Television and Direct Broadcast Satellite - It's More Complicated Than You Think

Competition Between Cable Television and Direct Broadcast Satellite - It's More Complicated Than You Think
Author: Andrew Wise
Publisher:
Total Pages: 0
Release: 2020
Genre:
ISBN:
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Direct Broadcast Satellite (DBS) is often considered a substitute for basic cable service, but current cable subscribers may face substantial switching costs to move from cable to DBS services. We use aggregate firm-level price data and other related demographic variables to examine the cost of switching from cable to DBS and vice versa. We find some firm-specific attributes and demographic variables that influence consumer choice and switching costs that appear to affect consumers' desire to switch from one service to another. We then use observation-specific dummy variables that stratify cable price based on changes in the level of cable prices between two periods to examine whether consumer behavior varies depending on the size of price change. We find that when quality-adjusted prices for basic cable services increase substantially, subscribers will switch from cable to DBS, presumably at the point at which the price change is larger than the cost of switching.

Microeconomics

Microeconomics
Author: David Besanko
Publisher: John Wiley & Sons
Total Pages: 821
Release: 2010-10-25
Genre: Business & Economics
ISBN: 0470563583
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Business professionals that struggle to understand key concepts in economics and how they are applied in the field rely on Microeconomics. The fourth edition makes the material accessible while helping them build their problem-solving skills. It includes numerous new practice problems and exercises that arm them with a deeper understanding. Learning by Doing exercises explore the theories while boosting overall math skills. Graphs are included throughout the mathematical discussions to reinforce the material. In addition, the balanced approach of rigorous economics gives business professionals a more practical resource.

Direct Broadcast Satellite, Telephone / Traditional Cable

Direct Broadcast Satellite, Telephone / Traditional Cable
Author: Christoph Koch
Publisher: GRIN Verlag
Total Pages: 15
Release: 2002-05-02
Genre: Performing Arts
ISBN: 3638124533
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Seminar paper from the year 1999 in the subject Communications - Movies and Television, grade: 2+ (B+), Ohio University (School of Telecommunication), course: Cable Communications, language: English, abstract: It was only a very small report on the front page of last Thursday’s issue of USA Today, but it indicated a tremendous change not only for America’s telecommunications market, but also for its society as a whole. In a small box between headlines about the crisis in Kosovo the interested reader could find out that AT&T had announced to purchase cable giant MediaOne and that software producer Microsoft was about to invest $5 billion in AT&T shares. This huge move won’t let the video distribution market unchanged and many experts believe that this merger has triggered a lot of new developments in all kinds of fields. This paper deals with the competition between traditional wired cable (as we know it since the beginnings of television) on the one hand – and newer services like direct broadcast satellites (DBS) and video and data distribution via telephone lines. While the first part will mainly cover the latest developments in the telephony business (focusing on the breathtaking AT&T deal), the second part will compare the benefits of cable and DBS in detail. It lies in the nature of the subject that the playing field can change in a couple of weeks (if not even in a couple of hours). Therefor it is very important to rely on up-to-date information and literature. Especially literature from before the 1996 Telecommunications Act, which allowed cross-ownership between cable and telephony and the like, can’t be considered too useful and was used only to get a historic idea of the subject matter. In doing research in this field one also has to be especially careful not to rely on sources that are heavily influenced by either the cable or the DBS lobby. Both groups naturally try to present the facts in a light that makes them look better and emphasizes the advantages of their particular system over the ones of the competition.