Simultaneous vs. Sequential Product Release

43 Pages Posted: 23 Sep 2022 Last revised: 22 Dec 2023

See all articles by Hojat abdolanezhad

Hojat abdolanezhad

Independent

Ningyuan Chen

University of Toronto - Rotman School of Management

Setareh Farajollahzadeh

McGill University - Desautels Faculty of Management

Ming Hu

University of Toronto - Rotman School of Management

Date Written: December 11, 2023

Abstract

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

abdolanezhad, Hojat and Chen, Ningyuan and Farajollahzadeh, Setareh and Hu, Ming, Simultaneous vs. Sequential Product Release (December 11, 2023). Available at SSRN: https://ssrn.com/abstract=4215955

Hojat Abdolanezhad

Independent

Ningyuan Chen

University of Toronto - Rotman School of Management ( email )

Setareh Farajollahzadeh (Contact Author)

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

Ming Hu

University of Toronto - Rotman School of Management ( email )

105 St. George st
Toronto, ON M5S 3E6
Canada
416-946-5207 (Phone)

HOME PAGE: http://ming.hu

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