The effects of consumer switching costs on competition between direct broadcast satellite and cable

Abstract

This study examines and measures the effects of switching costs as a barrier to DBS entering the market to compete with cable. The study finds switching costs exist and that switching costs don't deter new residents choosing a service for the first time from choosing a new competitor entering the market. The study also finds the Satellite Home Viewer Improvement Act of 1999 allows DBS and cable to become more substitutable products, which makes switching cost a more important factor in consumers' decisions to switch products.