Content Sampling, Household Informedness, and the Consumption of Digital Information Goods

Abstract

ABSTRACTTechnology and media are delivering content that is transforming society. Providers must compete for consumer attention to sell their digital information goods effectively. This is challenging, since there is a high level of uncertainty associated with the consumption of such goods. Service providers often use free programming to share product information. We examine the effectiveness of content sampling strategy used for on-demand series dramas, a unique class of entertainment goods. The data were extracted from a large set of household video-on-demand (VoD) viewing records and combined with external data sources. We extended a propensity score matching (PSM) approach to handle censored data, which permitted us to explore the main causal relationships. Relevant theories in the marketing and information systems disciplines informed our research on consumer involvement and informedness for decision making under uncertainty, the consumption of information goods, and seller strategies for digital content. The results show that content sampling stimulates higher demand for series dramas, but in a more nuanced way than was expected. Samples of the series reveal quality information to consumers and allow them to assess preference fit directly. As a result, they become more informed about their purchase decisions. Also, households seem to be willing to pay more to be better informed, and informed households tend to purchase more. This suggests that content providers should invest in strategies that help consumers to understand the preference fit of information goods.