Competition of Content Acquisition and Distribution Under Consumer Multi-Purchase

Journal of Marketing Research (Forthcoming)

124 Pages Posted: 3 Aug 2019

See all articles by Baojun Jiang

Baojun Jiang

Washington University in Saint Louis - John M. Olin Business School

Lin Tian

Fudan University, School of Management

Bo Zhou

University of Maryland, Smith School of Business

Date Written: July 2, 2019

Abstract

In many markets, such as video streaming or information services, a consumer may purchase multiple competing products or services. The existing theoretical literature typically assumes that each consumer can buy only one product. This paper explicitly models the consumer’s multi-purchase behavior, and examines an upstream content creator’s content production and selling strategies, as well as competing downstream distributors’ content acquisition and pricing strategies. We find that in contrast to the case of single-product purchase, under multi-product purchase, only one distributor will acquire the creator’s new content in equilibrium. Furthermore, when the content distributors are not highly differentiated (each having a limited amount of unique content), the content creator will reduce new content production, leading to lower profits for both the content creator and the content distributors. By contrast, when the distributors are already highly differentiated with a substantial amount of unique content, the content creator will increase its content production, leading to higher profits for both the content creator and the distributors. We show that our main results and insights are robust to several alternative assumptions.

Keywords: multi-product purchase, multi-homing, content creation, pricing, differentiation, media content, platforms

JEL Classification: D01, D21, D43

Suggested Citation

Jiang, Baojun and Tian, Lin and Zhou, Bo, Competition of Content Acquisition and Distribution Under Consumer Multi-Purchase (July 2, 2019). Journal of Marketing Research (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3427797 or http://dx.doi.org/10.2139/ssrn.3427797

Baojun Jiang (Contact Author)

Washington University in Saint Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States
3149353315 (Phone)

HOME PAGE: http://apps.olin.wustl.edu/faculty/Jiang/

Lin Tian

Fudan University, School of Management ( email )

670 Guoshun Road, Yangpu District
Shanghai, 200433
China

Bo Zhou

University of Maryland, Smith School of Business ( email )

College Park
College Park, MD 20742
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
159
Abstract Views
740
rank
208,296
PlumX Metrics