Pricing Strategy Of The Publishers In The Presence Of Piracy

Based on the current situation of the domestic publishing industry and the rapid development of e-books market,this paper concentrates on the pricing strategy of book publishers and its product digitization,the piracy,the promotion of network externality to the market and upstream and downstream profit in the presence of manufacturer referral,respectively.The core content of this paper is divided into three parts.The first part discusses the pricing strategy of publishers’ under the product digitization process.This chapter investigates the digitization strategy of book publishers in the absence and presence of the piracy.Then,we establish the basic model and the digitization model in the absence and presence of the piracy,respectively,to makes a comparative analysis between the two modles.The study found that the digitization of the product increased the profit of the publisher and reduced the profit of the traditional retailer.The profit of the traditional retailer was not only lower than the profit when the e-book was issued without piracy,but also when the e-book was not issued profits.Online retailers profit under the product digitization process is less than its profit without the piracy.Under certain conditions,the existence of piracy publishers issued e-books led to the profits increasing of publishers.The second part focuses on the pricing strategy of the traditional retailer and the online retailer in the presence of the network externalities.This chapter studies the book pricing strategy of book publishers in the absence of network externality and the existence of network externality.We establish the pricing model taking consideration of network externality and the pricing model under the existence of network externality.Comparing the balance of the two models,it can be found that the price of the product increases regardless of the network e-book retailer or the traditional retailer when the market exist network externality compared to without network externality.The presence of network externality increases the demand for the entire music market,which results that the demand for piracy increases.However,the market share of the book piracy may rise or fall.In addition,the network externality has a significant effect on the online book retailer,and its profit is significantly higher than that without the network externality.At last,the traditional book retailer’s profit will rise or fall.The third part discusses the product pricing strategy in the presence of the manufacturer referral.This chapter examines the impact of manufacturer referrals on the upstream and downstream pricing and profitability of the book supply chain.First of all,without consideration of the manufacturer referral,we solve the Nash equilibrium of the two same strong retailers and the Stackelberg equilibrium of a weak retailer and a strong retailer.Secondly,we consider the Nash equilibrium and Stackelberg equilibrium in the case of manufacturer referral in order to make a comparative analysis between the three equilibriums.The study found that if there was no manufacturer referrals,both traditional retailers and online retailers,where the profits of traditional retailers and online retailers were always optimal in the strong markets of online retailers,and both tend to be online A relatively strong market.In the presence of manufacturer referrals,when the online retailer is strong,the manufacturer’s referral makes the market competition worse and its own interests are impaired.When traditional retailers are strong,manufacturer referrals weaken the competitiveness of strong retailers so that the disadvantages of weak retailers get to be a certain make up,achieving the balance the market competition.When the two retailers are equally strong,the manufacturer referral mechanism increases the profitability of online retailers.Online retailer demand increases.The demand for traditional retailers is reduced,resulting in two parts of the publisher’s demand being offset against each other and the profits did not increase.