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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 7 media product is even for free to gain more users, in order to get more advertising revenue, such as free newspaper. Although at present policies in mainland China, paid channels are not allowed to do advertisement, but if the user willingness to pay is low, then it can also consider changing policy related to broadcast advertisement. However, the key is whether it is suitable for advertisement or not which depends on the users' attitude toward paid channels to switch to advertisement in order to reduce the price. Fifth, the key to solving the problem of unwilling to pay is to conduct more research on the status of unpaid users. Although we can explore the reasons why people are willing to pay through asking open questions, the potential predictors cannot reflect reality by just depending on self report only; therefore regression analysis based on related variable s must be conducted. In previous research, Schwer and Daneshvary (1995) used regression methods to examine the potential predictors of willingness to pay, including income, television use, preference for a substitute good, and demographics. As paid channel is one of media goods, previous research also found demographics and media use related to willingness to pay (Chyi & Lasorsa, 2002; Dimmick,Chen,&Li, 2004). Paid channels , newspapers and magazines are also media goods, so willingness to pay for them may be related. Previous empirical research studies have not focused on this and this study has tried to explore it. According to microeconomics, income is an important variable in researching willingness to pay because it refers to the consumer's budget constraints. As normal goods, under other equal conditions, the higher the income, the higher is the willingness to pay. Most media products are assumed to be normal goods. An article (Brooks, 2008) in the New York Times discussed a 9% decline in DVD sales in the third quarter of 2008 in the context of the economic crisis negatively

Authors: Zeng, Fan-Bin.
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WILLINGNESS TO PAY FOR PAID CHANNELS                                                 7 
media product is even for free to gain more users, in order to get more advertising revenue, 
such as free newspaper. Although at present policies in mainland China, paid channels are not 
allowed  to  do  advertisement,  but   if  the   user   willingness  to   pay  is  low,  then   it  can   also 
consider changing policy related to broadcast advertisement. However, the key is whether it 
is suitable for advertisement or not which depends on the users' attitude toward paid channels 
to switch to advertisement in order to reduce the price. 
Fifth, the key to solving the problem of unwilling to pay is to conduct more research on 
the status of unpaid users. Although we can explore the reasons why people are willing to pay 
through   asking   open   questions,   the   potential   predictors   cannot   reflect   reality   by   just 
depending on self report only; therefore regression analysis based on related variable
s
 must 
be conducted. In previous research, Schwer and Daneshvary (1995) used regression methods 
to examine the potential predictors of willingness to pay, including income, television use, 
preference for a substitute good, and demographics. As paid channel is one of media goods, 
previous research also found demographics and media use related to willingness to pay (Chyi 
& Lasorsa, 2002; Dimmick,Chen,&Li, 2004). Paid channels
,
 newspapers and magazines are 
also media goods, so willingness to pay for them may be related. Previous empirical research 
studies   have   not   focused   on   this   and   this   study   has   tried   to   explore   it.  According   to 
microeconomics, income is an important variable in researching willingness to pay because it 
refers to the consumer's budget constraints. As normal goods, under other equal conditions, 
the higher the income, the higher is the willingness to pay. Most media products are assumed 
to be normal goods. An article (Brooks, 2008) in the New York Times discussed a 9% decline 
in DVD sales in the third quarter of 2008 in the context of the economic crisis negatively 


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