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The Rise and Rise of Cable TV: Demand elasticity of cable television during the Great Recession
Unformatted Document Text:  CABLE SUBSCRPITIONS Discussion By supporting both hypotheses, these data lend support to the PIH and empirically contribute to the argument that consumers in both recession-weak and recession-strong DMA’s will purchase goods offered by Cable/ADS providers no matter what the current economic climate. During the recession time period, housing starts slowed (United States Census Bureau, 2010), therefore the building of new homes would not have been a factor in the increase of Cable/ADS penetration. Population also was not a factor, especially in the larger recession-weak DMA’s – such as Detroit, MI (11), which saw a decrease in population during the recession period (United States Census Bureau, 2010), but an increase in Cable/ADS subscriptions (Television Bureau of Advertising, 2008-2009). One of the limitations of this study is that it does not take into account the amount of new Cable/ADS subscribers based on an increase in either new cable passed, or broadband cable laid. Also, the sample size was limited to DMA’s for which market data was readily available. A study involving more widespread DMAs and Cable/ADS data could have varying results. Future research in this area could include showing whether sales of televisions also increased during the recession period, or if discounts on newer models of televisions related to the increase in Cable/ADS penetration. Dupagne also showed that the demand for most mass- media programming is inelastic (1997), and may additionally explain why some unemployed during this most recent recession did not view canceling Cable/ADS services as necessary. In addition, since more Americans now watch certain types of programming via different modalities – i.e. the Internet (Gross, 2010), – it would be interesting to see if these increase in Cable/ADS subscriptions had more to do with procuring high-speed online access, or watching actual televised content on television sets. 10

Authors: Danelo, Matthew.
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CABLE SUBSCRPITIONS
Discussion
By supporting both hypotheses, these data lend support to the PIH and empirically 
contribute to the argument that consumers in both recession-weak and recession-strong DMA’s 
will purchase goods offered by Cable/ADS providers no matter what the current economic 
climate. During the recession time period, housing starts slowed (United States Census Bureau, 
2010), therefore the building of new homes would not have been a factor in the increase of 
Cable/ADS penetration. Population also was not a factor, especially in the larger recession-weak 
DMA’s – such as Detroit, MI (11), which saw a decrease in population during the recession 
period (United States Census Bureau, 2010), but an increase in Cable/ADS subscriptions 
(Television Bureau of Advertising, 2008-2009).
One of the limitations of this study is that it does not take into account the amount of new 
Cable/ADS subscribers based on an increase in either new cable passed, or broadband cable laid. 
Also, the sample size was limited to DMA’s for which market data was readily available. A 
study involving more widespread DMAs and Cable/ADS data could have varying results.
Future research in this area could include showing whether sales of televisions also 
increased during the recession period, or if discounts on newer models of televisions related to 
the increase in Cable/ADS penetration. Dupagne also showed that the demand for most mass-
media programming is inelastic (1997), and may additionally explain why some unemployed 
during this most recent recession did not view canceling Cable/ADS services as necessary. In 
addition, since more Americans now watch certain types of programming via different 
modalities – i.e. the Internet (Gross, 2010), – it would be interesting to see if these increase in 
Cable/ADS subscriptions had more to do with procuring high-speed online access, or watching 
actual televised content on television sets. 
10


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