Gravity and trade in video on demand services

Abs­tract:

We esti­ma­te the pat­terns of cata­lo­gue ava­ila­bi­li­ty (exten­si­ve mar­gin) and num­ber of clicks per title (inten­si­ve mar­gin) using a novel data set con­ta­ining the infor­ma­tion on Net­flix cata­lo­gu­es and vie­wing across 20 coun­tries. Our results show evi­den­ce of the gra­vi­ty fra­me­work expla­ining both mar­gins of Net­flix wat­ching. In par­ti­cu­lar, we find that Net­flix users have a strong pre­fe­ren­ce for dome­stic pro­duc­tions. Deta­iled infor­ma­tion on movie/show cha­rac­te­ri­stics gives us a uni­que oppor­tu­ni­ty to esti­ma­te the impor­tan­ce of quali­ty in deter­mi­ning the pat­terns of Net­flix wat­ching. Inde­pen­dent vie­wers» ratings and title’s age play a key role in expla­ining the num­ber of clicks going to a par­ti­cu­lar title. Final­ly, Net­flix ori­gi­nal pro­duc­tions attract a dispro­por­tio­nal­ly lar­ge num­ber of clicks.