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

Prof. Hyeokkoo Eric KWON, Assistant Professor of Information Technology and Operations Management, Nanyang Technological University (NTU)

Date:         23 November 2022 (Wednesday)
Time:        3:00pm – 4:00pm
Venue:      Online via Zoom
Host:         Prof. Yan LIN, Assistant Professor of Business Intelligence and Analytics
Online registration:  https://umac.au1.qualtrics.com/jfe/form/SV_0v6pf4LfZKhi4nk

Registration deadline: 21 November 2022


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-based business 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.


Hyeokkoo Eric Kwon is an Assistant Professor of Information Technology and Operations Management in Nanyang Business School (NBS) at Nanyang Technological University (NTU), Singapore. His research interests include mobile analytics of AI, platforms, FinTech, digital healthcare, and customer targeting in particular and economics of IT, big data analytics, and technology management in general. He has been closely working with a number of leading companies in diverse industries, including mobile marketing, telecom, banking, consumer/market research, healthcare, retail, CRM, and F&B, for business analytics-related projects and consulting works. Based on the industry collaboration, he has published in leading journals, including Information Systems Research (ISR), Journal of Management Information Systems (JMIS), Journal of Operations Management (JOM), and Production and Operations Management (POM). He has received a series of honors and awards, including Research Excellence Award (2019) and Teaching Excellence Award (2021) by Nanyang Business School and Best Paper Award by International Conference on Information Systems 2020 (ICIS 2020).

All are welcome!