Fee or Free: When Should Firms Charge for Online Content?

نویسندگان

  • Anja Lambrecht
  • Kanishka Misra
چکیده

Many online content providers aim to compensate for a loss in advertising revenues by charging consumers for access to content. However, such a choice is not straightforward because subscription fees typically deter customers and a resulting decline in viewership further reduces advertising revenues. This research examines whether firms that offer both free and paid content can benefit from adjusting the amount of content offered for free. We find that firms should offer more free and not paid content in periods of high demand. We motivate theoretically that this policy which we term ‘counter-cyclical offering’ may be optimal for firms when consumers are heterogeneous in their valuation of online content, this heterogeneity varies over time, and more so for low consumer types than for high types. Using unique data from an online content provider, we then provide empirical evidence that firms indeed engage in counter-cyclical offering and increase the share of free content in periods of high demand.

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

Pricing Online Content: Fee or Free?*

Many online content providers aim to compensate for a loss in advertising revenues by charging consumers for access to online content. However, such a choice is not straightforward, because subscription fees typically deter customers, further reducing advertising revenues. In this research, we empirically examine and quantify a content provider’s trade-off between advertising and subscription r...

متن کامل

Price Competition in the Presence of a Web Aggregator∗

In this paper we examine the impact of a web aggregator on firms and consumers in a horizontally differentiated market. When a firm pays a fee to be listed on the aggregator’s website, its location and price become observable to e-users (consumers who visit the website). We consider two settings, depending on the possibility for online firms to offer discounts to e-users. In equilibrium, not al...

متن کامل

A strategic analysis of internet contents market in electronic commerce

Many online content providers tend to charge their services since they are confronted with difficulties to attain revenue from the online advertising. This paper shows why they charge their services as the online market becomes grow and explore the strategies when the conventional offline contents firms enter the online contents market. And we also discuss some implications related to pricing s...

متن کامل

Predatory publishing: what authors, reviewers, and editors need to know.

The expansion of the Internet and the increasing pressure to provide new scientific content to the public as quickly as possible have led to rapid changes in the publishing industry. Recently, new publishing models have arisen, such as open access (content available to readers at no charge), hybrid (some combination of print and online content delivery), and early online access to print journal...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:
  • Management Science

دوره 63  شماره 

صفحات  -

تاریخ انتشار 2017