Study of Video Platform Pricing Strategies under Different Distribution
- 1 School of Business, East China University of Science and Technology, Shanghai, China
- 2 School of Business, East China University of Science and Technology, Shanghai, China
Abstract
This paper develops a two-stage game model containing a monopolistic independent video provider and two free video platforms, and explores the distribution choices of the video provider as well as the advertising pricing strategies of the two platforms in different distribution choices. We found the following: (i) When video quality is high, the video provider offers its video exclusively to one platform; when video quality is low , the video provider offers its video non-exclusively to both platforms. (ii) In exclusive distribution, the platform with the exclusive video has an advantage in advertising price, viewer share, and advertiser share over its competitor, and this advantage increases with video quality. (ii i ) In non-exclusive distribution, the advertising prices, viewer market shares, and advertiser shares of the two platforms are equal and independent of video quality.
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