Division Of Profit In Content Service Market

This article use a bargaining framework to deal with a problem: how to distribute the payoff when a telecom carrier deliver the services of competing content service providers, how do these payoffs change in response to changing market conditions, and how the providers' bargaining power will affect their payoffs when they are in a sequential contracting. By argument, the paper find that each content service provider's payoff depend on its service's incremental contribution to the total payoff. Thus the payoffs depend completely on the total demand of all the services in the mainstream market. It suggests that the negotiation between a carrier and a content service provider cannot be analyzed without the consideration of the market situation between the carrier and another competing content service provider. The paper also finds that the second provider's payoff is decreasing in its own bargaining power in some occasions when they are in a sequential contracting. This will bring out an interesting outcome, i.e. content service provider in the second stage contracting will try to reduce its own bargaining power before the beginning of negotiation.