Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers
In the two-sided market for online streaming content, the platform’s co-opetitive strategy has been wildly discussed, where the platforms cooperate in sharing the broadcasting right of content and meanwhile compete for both subscribers and advertisers. Although platform co-opetition in practice can...
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-03-01
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| Series: | Journal of Theoretical and Applied Electronic Commerce Research |
| Subjects: | |
| Online Access: | https://www.mdpi.com/0718-1876/18/1/38 |
| _version_ | 1797610737630183424 |
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| author | Jing Li Shuying Gong Xing Li |
| author_facet | Jing Li Shuying Gong Xing Li |
| author_sort | Jing Li |
| collection | DOAJ |
| description | In the two-sided market for online streaming content, the platform’s co-opetitive strategy has been wildly discussed, where the platforms cooperate in sharing the broadcasting right of content and meanwhile compete for both subscribers and advertisers. Although platform co-opetition in practice can be easily captured, the impacts of cross-side network effects on pricing strategy are contingent upon the participation decision of both sides, including single-homing and multi-homing. Therefore, we examine the optimal co-opetitive strategy of duopoly platforms using a Hotelling model to capture user behaviors and investigate the equilibriums of pricing decisions and profits in three scenarios: single-single, multi-single, and multi-multi. The main findings are: (1) Advertisers choose multi-homing only when subscribers are also multi-homing, and the broadcasting cost is relatively low. (2) With single-homing advertisers, the primary broadcasting platform earns more profit than the re-broadcasting one. (3) With multi-homing advertisers, the primary broadcasting platform’s profit increases with the broadcasting rights cost. (4) Platforms should focus on building strong cross-side network effects with multi-homing advertisers. Alternatively, they would be better off contracting with single-homing advertisers if the effects are relatively low. |
| first_indexed | 2024-03-11T06:19:26Z |
| format | Article |
| id | doaj.art-ae9cc1c0c09f4d0ca34a5d4ede83157e |
| institution | Directory Open Access Journal |
| issn | 0718-1876 |
| language | English |
| last_indexed | 2024-03-11T06:19:26Z |
| publishDate | 2023-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Journal of Theoretical and Applied Electronic Commerce Research |
| spelling | doaj.art-ae9cc1c0c09f4d0ca34a5d4ede83157e2023-11-17T12:04:53ZengMDPI AGJournal of Theoretical and Applied Electronic Commerce Research0718-18762023-03-0118174476410.3390/jtaer18010038Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and AdvertisersJing Li0Shuying Gong1Xing Li2School of Economics and Management, Shanghai University of Political Science and Law, Shanghai 201701, ChinaCollege of Business, Shanghai University of Finance and Economics, Shanghai 200437, ChinaDepartment of History, The Chinese University of Hong Kong, Hong Kong, ChinaIn the two-sided market for online streaming content, the platform’s co-opetitive strategy has been wildly discussed, where the platforms cooperate in sharing the broadcasting right of content and meanwhile compete for both subscribers and advertisers. Although platform co-opetition in practice can be easily captured, the impacts of cross-side network effects on pricing strategy are contingent upon the participation decision of both sides, including single-homing and multi-homing. Therefore, we examine the optimal co-opetitive strategy of duopoly platforms using a Hotelling model to capture user behaviors and investigate the equilibriums of pricing decisions and profits in three scenarios: single-single, multi-single, and multi-multi. The main findings are: (1) Advertisers choose multi-homing only when subscribers are also multi-homing, and the broadcasting cost is relatively low. (2) With single-homing advertisers, the primary broadcasting platform earns more profit than the re-broadcasting one. (3) With multi-homing advertisers, the primary broadcasting platform’s profit increases with the broadcasting rights cost. (4) Platforms should focus on building strong cross-side network effects with multi-homing advertisers. Alternatively, they would be better off contracting with single-homing advertisers if the effects are relatively low.https://www.mdpi.com/0718-1876/18/1/38multi-homingco-opetitive strategycross-side network effectpricing decision |
| spellingShingle | Jing Li Shuying Gong Xing Li Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers Journal of Theoretical and Applied Electronic Commerce Research multi-homing co-opetitive strategy cross-side network effect pricing decision |
| title | Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers |
| title_full | Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers |
| title_fullStr | Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers |
| title_full_unstemmed | Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers |
| title_short | Co-Opetitive Strategy Optimization for Online Video Platforms with Multi-Homing Subscribers and Advertisers |
| title_sort | co opetitive strategy optimization for online video platforms with multi homing subscribers and advertisers |
| topic | multi-homing co-opetitive strategy cross-side network effect pricing decision |
| url | https://www.mdpi.com/0718-1876/18/1/38 |
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