Choice of Business Model and Pricing Strategy with Ad-Sponsor and Subscription Fee

DOI

10.2991/lemcs-15.2015.306How to use a DOI?

Keywords

Business model; Ad-sponsor; Model; Pricing; Video website

Abstract

This paper studies the strategy and best pricing tactics of two-sided platforms, and analyzes how the platforms will perform when facing both ad-sponsors and subscription fee.Researchers Researchers focus on the video websites as the research object, due to the peculiarity and negative cross-group network externalities of video websites. Based on the revenue structure and operation model, this paper considers 3 business models, including pure ad-sponsored model, pure subscription model, and a mixed model. With the help of modeling and game theory, researchers get the equilibriums of these three models. The result shows that, the pure model will incur a fixed portion of audience, if the platform wants to expand its customer, it needs the mixed model. Meanwhile, success of the mixed model depends on the add-on utility gained by VIP users compared with the free uses. The findings of this paper could contribute to development of video websites during the early and mid in their lifecycle.

Copyright

© 2015, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Zhihui Wu
AU  - Gang Liu
PY  - 2015/07
DA  - 2015/07
TI  - Choice of Business Model and Pricing Strategy with Ad-Sponsor and Subscription Fee
BT  - Proceedings of the International Conference on Logistics, Engineering, Management and Computer Science
PB  - Atlantis Press
SP  - 1536
EP  - 1540
SN  - 1951-6851
UR  - https://doi.org/10.2991/lemcs-15.2015.306
DO  - 10.2991/lemcs-15.2015.306
ID  - Wu2015/07
ER  -