Free TV-Show Streaming Hurts Online Sales, Research Finds (torrentfreak.com)

New research from Carnegie Mellon University shows that online piracy is not the only worry for TV distributors. Based on Downton Abbey streaming and sales data provided by PBS, as reported by TorrentFreak, the researchers find that free legal streams can significantly reduce download sales. However, that doesn't necessarily mean that free streaming options should be banned. From the report: The researchers were able to estimate the impact in a natural experiment, since PBS was required to pull the free streams for all episodes at the same time. This means that some were streamable for more than a month, while others only for a week, or two. In addition, they had sales data for several seasons, allowing them to make an alternative comparison between years, where the streaming windows varied. In both cases, they show that free streaming cannibalizes download sales. "Our analysis in our primary specification indicates that availability in the free streaming window reduces EST sales by 8.4%. Using an alternative specification we find that free availability reduces EST sales by 9.9%," they write. The negative effect is not unexpected. However, it doesn't mean that it is wrong to offer free streaming in the long run, as there are several positive side-effects. That's where the puzzle starts to get complicated.

Comments

The obvious solution

[Calydor]

Make the first part of the first season free for streaming. Like, the first four-six episodes so you can get a taste for the show.

Is the show good? People will buy the rest.

Is the show bad? People will not give it money it does not deserve.

Win-win.

Re:DUH!

[pr0fessor]

I'm sure that other companies have already figured out that free and legal streams offer an addition avenue for advertising look at CW they have a lot of their current content provided as a free stream with ads then when it goes to netflix or dvd at the begging of the next season they take down the old content.

Re:Six of one....

[gfxguy]

Ah... the single ad at the beginning of the show doesn't really bother me. I have prime, too, and there are a couple of Hulu shows that do that, too, even if you have the commercial free option. It really doesn't bother me. I also don't need to watch the show live, but right after it airs, or the next day, or even the next week is fine for me. For some shows, Hulu will post it immediately after the broadcast ends; for others it's the next day. The problem is Hulu only has about a quarter to a third of what I would like, but I have found originals that are good, too, and it's only $13 month for the commercial free subscription. I would pay $50 if it had AMC (Walking Dead and Preacher) and a handful of other shows.