Program substitutability in network television: Evidence from Argentina

Inference about television program substitutability from the consumer perspective is complicated by unobserved shocks to viewership and endogenous programming choices by television networks. High-frequency changes in program scheduling are commonplace in Argentina. This paper uses this variation in program scheduling as an instrumental variable in order to measure the degree of substitution across the programs broadcast by the five network television stations in a large Argentinean market. In line with the results of prior studies, the results of this paper show evidence of substantial business stealing in network television: increases in the ratings of a station primarily decrease the ratings of other stations. However, the estimates also show that the increases in ratings attributable to new viewers entering the market range between 3 and 5 percentage points for each 10-point increase in a channel’s viewership. The size of this market expansion effect is significantly larger than that found by prior studies.