The impact of ambient air quality on consumer demand in the multi-channel setting: a movie industry case

Despite the growing interest in the effects of air pollution on consumer behavior, its role in shaping channel choice within a multi-channel environment remains underexplored. This study provides empirical evidence on how variations in outdoor air quality influence consumer decisions between traditional (theatrical) and digital (video-on-demand, VOD) movie consumption. By integrating unique nationwide datasets, including box office revenues, digital home VOD purchases, and particulate matter (PM) levels across regions in South Korea, we identify the conditions under which air quality becomes a more significant factor in shifting consumer demand from offline to digital channels. Our results show that poor air quality significantly reduces theatrical attendance and increases VOD purchases when movies are available simultaneously in theaters and on digital home VOD channels. These findings advance our understanding of the environmental influences on consumer demand and offer strategic insights for firms managing release strategies in multi-channel contexts.