The Effects of Platform and Consumer Lifecycles on Content Sales in a Platform-Mediated Market
52 Pages Posted: 16 Feb 2013
Date Written: February 15, 2013
Previous research has demonstrated the importance of installed base size effects, in which content released on a platform with a larger installed base tends to generate greater sales. We further examine the role of the installed base by considering the impact of installed base composition on content sales. We specifically investigate the roles of the platform product lifecycle and the consumer lifecycle. We examine differences in content sales resulting from an installed base that is comprised of platform “innovators” versus one that contains more late adopters. Additionally, we consider the role of consumer lifecycles on content sales and compare the impact of an installed base consisting of a large number of new platform users to one consisting of pre-existing platform users. Using sales data from the video game market, we find strong evidence to support the existence of significant platform and consumer lifecycle effects. We find that earlier and newer platform adopters purchase more content than later and pre-existing adopters. These results underline the importance of considering installed base composition when releasing new content.
Keywords: Movies & Entertainment Marketing, Installed Base Effects, Product Lifecycles, Regression Models, Diffusion Models
JEL Classification: M31
Suggested Citation: Suggested Citation