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Willingness to pay for paid channels of digital TV: an Empirical Analysis
Unformatted Document Text:  WILLINGNESS TO PAY FOR PAID CHANNELS 4 revenue and total cost in TIANSHENG Company nowadays ( Wang, 2008 ) . The situation of other paid channel s is also not optimistic. F or instance, the revenue of the best paid channel has 10 million RMB in 2007, and there is very little profit left after subtracting the cost ( Guo, 2008 ) . These facts show that the revenue figures for paid channels are not optimistic, which also mean the willingness to pay for a paid channel is low among digital TV use rs . How willing are users to pay for paid channels? What are the predictor factors of willing to pay for paid channels? How to promote the users’ willingness to pay for paid channels? These are the problems motivating this research study. Literature review and research problems In economics, the willingness to pay (WTP) is the maximum amount that an individual states they are willing to pay for a goods or service (UK Department for International Development [DFID], 1998). Therefore WTP is a personal evaluation on particular goods or services, with strong subjective assessment. However, the maximum amount which a person would be willing to pay could not reflect the overall willingness to pay because a person would consider more than the price when buying goods , For example, users may not be “happy” paying a certain tariff, but they are willing to pay this amount rather than go without, just as householders in the UK might not be happy paying their gas but know that they must pay them, or go without (Webster,1999). Furthermore, previous study used more questions to measure WTP for some television service, such as “What is the British public willing to pay for the current BBC services and proposed new activities?” ,“Does their WTP vary depending on whether they were thinking from a ‘citizen perspective’(i.e., public value) or a ‘consumer

Authors: Zeng, Fan-Bin.
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WILLINGNESS TO PAY FOR PAID CHANNELS                                                 4 
revenue and total cost in TIANSHENG Company nowadays
Wang, 2008
. The situation of 
other paid channel
 is also not optimistic. 
or instance, the revenue of the best paid channel 
has 10 million RMB in 2007, and there is very little profit left after subtracting the cost
. These facts show that the revenue figures for paid channels are not optimistic, which 
also mean the willingness to pay for 
 paid channel is low among digital TV use
. How 
willing are users to pay for paid channels? What are the predictor factors of willing to pay for 
paid channels? How to promote the users’ willingness to pay for paid channels? These are the 
problems motivating this research study.
Literature review and research problems  
In economics, the willingness to pay (WTP)
is the maximum amount that an individual 
states   they  are   willing   to   pay  for   a   goods   or   service
(UK   Department   for   International 
Development [DFID], 1998). Therefore WTP is a personal evaluation on particular goods or 
services, with strong subjective assessment. However, the maximum amount which a person 
would be willing to pay  could  not reflect  the overall  willingness to pay  because a person 
would consider more than the price when buying goods , For example, users may not be 
“happy” paying a certain tariff, but they are willing to pay this amount rather than go without, 
just as householders in the UK might not be happy paying their gas but know that they must 
pay them, or go without (Webster,1999). Furthermore, previous study used more questions to 
measure WTP for some television service, such as “What is the British public willing to pay 
for the current BBC services and proposed new activities?” ,“Does their WTP vary depending 
on whether they were thinking from a ‘citizen perspective’(i.e., public value) or a ‘consumer 

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