Exclusive Content, Developments Cost and Streaming Service Competition

Yen-Ju Lin ； Yi-Mei Yang

《Business and Technology Innovation Journal》 Volume 1 Issue 1 (2021/12) Pp. 37-47

https://doi.org/10.29680/BTIJ.202112_(1).0003

Abstracts

We consider an over-the-top media service market, which consists of a vertical integrated incumbent and an independent firm. We explore the incentive of vertical integrated incumbent to license its exclusive premium content with two-part tariff licensing for its rival, who may alternatively develop its own premium content for an imperfectly substitutable product. We identify the incentive for licensing based on the development cost incurred by the rival and the quality of premium content is developed. Moreover, we find that the incumbent always has an incentive to license its premium content to its rival. However, it is detrimental to the consumer surplus.

Keywords

Two-Part Tariffs ； Vertically-Related Market ； Social Welfare ； Exclusive Content

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