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Is Netflix a threat to the cable TV industry? Evidence from Brazil

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  • Silva, João Marcos Soares da
  • Lima, Ricardo Carvalho de Andrade

Abstract

In recent years, the Brazilian cable TV industry has experienced a sharp downturn. In parallel, the over-the-top platform Netflix gained popularity and Brazil has become one of its biggest markets. The objective of this paper is to investigate the competitive effects of Netflix's entry on the incumbent cable TV industry. We explore the regional variability of Netflix's popularity (measured by Google Trends) and combined this information with official data of the cable TV market. Using a two-way fixed effects estimator with state-month observations (covering the period of 2012–2019), we showed that the increase in one standard deviation in Netflix popularity is associated with a 3.62% reduction in the density of cable TV subscribers and with a 19.69% reduction in the number of small firms that operate cable TV.

Suggested Citation

  • Silva, João Marcos Soares da & Lima, Ricardo Carvalho de Andrade, 2022. "Is Netflix a threat to the cable TV industry? Evidence from Brazil," Telecommunications Policy, Elsevier, vol. 46(3).
    • Handle: RePEc:eee:telpol:v:46:y:2022:i:3:s0308596121001786
    DOI: 10.1016/j.telpol.2021.102274
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    References listed on IDEAS

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    Cited by:

    1. Sung, Nakil & Kim, Minchang, 2023. "COVID-19 and changes in content usage behavior: The case of South Korea," Telecommunications Policy, Elsevier, vol. 47(1).

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