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A Forecast Simulation Analysis of the Next-Generation DVD Market Based on Consumer Preference Data

Author

Listed:
  • Jongsu Lee
  • Jae Young Choi
  • Youngsang Cho

    (Technology Management, Economics, and Policy Program (TEMEP); Seoul National University)

Abstract

Just as standards wars over formats had characterized VCRs upon introduction to the market, the next-generation DVD standards war between Blu-Ray and HD-DVD lasted six years before Blu-Ray won the contest. Beginning with stated preference data drawn from a structured conjoint survey conducted before Blu-Ray became the de facto standard of the next-generation DVD format, we estimated consumer preferences on digital video players. A Bayesian mixed-logit model was used and market share simulations were conducted under various scenarios based on estimated parameters to surmise the future South Korean digital video-player market. Results indicate that consumers feel that network size and title availability are more important than hardware-related facets of the product, such as definition and storage capacity. The level of title availability and price of the Blu-Ray player for Blu-Ray¡¯s dominance over DVD will vary by the penetration rate of DVD players.

Suggested Citation

  • Jongsu Lee & Jae Young Choi & Youngsang Cho, 2009. "A Forecast Simulation Analysis of the Next-Generation DVD Market Based on Consumer Preference Data," TEMEP Discussion Papers 200933, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2009.
    • Handle: RePEc:snv:dp2009:200933
    as

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    File URL: http://temep-repec.my-groups.de/DP-33.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Next-generation DVD; de facto standard; mixed logit; market share simulation; standard competition grade; willingness to pay; relative importance.;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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