Content proliferation and narrowcasting in the age of streaming media.

This article develops a theoretical model to determine optimal content policies for streaming media companies aiming to maximize customer engagement rather than short-term profits. It contrasts traditional transaction-based firms, which produce just enough non-overlapping programs to cover consumer preferences, with engagement-based streaming firms that benefit from placing programs closer together, allowing overlapping coverage intervals to enhance customer satisfaction and retention. The model incorporates learning of customer taste distributions, showing that streaming firms should produce more content and create greater overlap in high-density customer segments, while adopting a high-quality, low-variety strategy for crowded clusters and a low-quality, high-variety approach for niche clusters. Extensions consider endogenous content quality and multi-viewing behavior, concluding that producing multi-episode TV series suits frequent viewers better than individual movies. The findings provide insights into content production strategies tailored to subscription-based streaming platforms leveraging data-driven personalization.