Pay for Content or Pay for Marketing? An Empirical Study on Content Pricing
Xintong Han () and
Pu Zhao ()
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Xintong Han: Concordia University, Department of Economics, 1455 Boulevard de Maisonneuve O, Montreal, QC H3G 1M8, Canada.
Pu Zhao: Boston University, Questrom School of Business, 595 Commonwealth Avenue, Boston, MA 02215, USA.
No 19-03, Working Papers from NET Institute
In this paper, we use unique data from a popular Chinese content provision platform to examine three issues: first, content providersâ€™ pricing strategies when each follower needs to pay an annual fee for access to content; second, content providersâ€™ trade-oï¬€s between traffic and referral marketing expenses; and third, the effect of a platform policy on the welfare of content providers and their followers. We use a structural model for a content providerâ€™s pricing and referral marketing decisions. The model estimates highlight the link between the referral effectiveness and potential revenue loss. Our counterfactual analysis shows vast difference in communitiesâ€™ reactions towards increased platform commissions and potential homogeneity of content provision as well as huge demand loss beyond certain commission thresholds.
Keywords: content pricing; referral marketing; platform policy; structural estimation (search for similar items in EconPapers)
JEL-codes: L12 L14 L25 L51 (search for similar items in EconPapers)
Pages: 59 pages
New Economics Papers: this item is included in nep-com, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:1903
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