Simultaneous vs. Sequential Product Release
43 Pages Posted: 23 Sep 2022 Last revised: 22 Dec 2023
Date Written: December 11, 2023
We investigate the strategic choices of a content creator of serial content where the attraction level of content is unknown to the creator and heterogeneous customers before its debut. Customers can learn about the attraction level through personal experience (private signal), critics' opinions (public signal), or the average feedback of other consumers (social signal).
The content creator decides on a release strategy---whether to release content simultaneously and get paid upfront or sequentially over multiple periods. First, we demonstrate that when a price-taker content creator sells content at a fixed price, and customers only learn from private signals, sequential release yields lower expected revenue than simultaneous release due to the negative impact of private learning on the sequential release strategy, even though customers' surplus is higher under sequential release.
Second, we demonstrate that under some conditions, the content creator can enhance the sequential release's expected revenue through flexible pricing or by encouraging public signals, surpassing a simultaneous release's revenue.
Third, when the prior belief on the attraction level of content is very uncertain, if customers rely solely on private signals, setting a low initial price close to free is optimal for the content creator to encourage learning. However, interestingly, if joint private and public signals influence learning, the content creator will restrict learning by imposing a high initial price. Additionally, we demonstrate that under sequential release, when the market is sufficiently large, the content creator benefits more from social signals than public signals. Our results provide strategic guidance for serial content creators regarding content release and pricing strategies, considering the consumers' learning and publishers' policies.
Keywords: buzz, social learning, product release,sequential learning, reviews
JEL Classification: D83
Suggested Citation: Suggested Citation