Analysis On The Influence Of Different Charging Modes On Competition Strategy Of Media Platforms And Government Regulation

Media platforms have become an indispensable part of cultural life.Consumers watch programs through them while advertisers need to place advertisements through them.Media platforms,advertisers and consumers,together constitute a two-sided market.Media platform,the core part of the market,plays an key role in connecting the other two sides of the market and making the market work.Traditional charging modes of media platforms include Pay-TV and Free-to-air.Now,as people gain a stronger sense of time,advertisements cause much more utility losses to consumers,so the Membership emerges as the time demands.Under this mode,consumers can choose to pay a fee to the platform to gain the right to skip ads.Based on Salop's(1979)model,this paper constructs a two-sided market model to explore the relationship among media platforms,advertisers and consumers under different charging modes.Firstly,through theoretical analysis,this paper obtains the equilibrium of competition under the condition of free entry and the equilibrium when social welfare is maximized,then compares them.Furthermore,from the perspective of policy makers,this paper try to analyse the ways to improve social welfare.The main conclusions of this paper are as follows:(1)In Pay-TV and Membership models,the bigger the number of consumers who are insensitive to advertisements is,the bigger the consumer surplus will be.But it is not necessarily in Free-to-air model.In Pay-TV model,consumer surplus is inversely proportional to consumers' aversion to advertisements,while it is irrelevant in Membership model and uncertain in Free-to-air model.In Pay-TV and Free-to-air model,advertisers' profits are proportional to the number of consumers who are insensitive to advertisements and inversely proportional to the degree of consumers'aversion to advertisements.In Membership model,however,advertisers' profits are only proportional to the former,not to the latter.(2)By comparing the competition with the social optimal,we can find that when consumers' aversion to advertisements is low,the advertisement amount in Pay-TV model is low,which cannot be determined under Membership model.The amount of advertisement in Free-to-air model depends on the number of consumers who are not sensitive to advertisements:when the number of these consumers is small,the balanced amount is large.When consumers' aversion to advertisements is high,the amounts of advertisements under the three models are low.As for the number of platforms,in Pay-TV model,the number is large;in the other two models,if the advertising revenue is higher(lower),the number of platforms is larger(smaller).(3)The government can maximize social welfare,then correct inefficiencies in free entry by controlling the amount of advertisements indirectly.Specifically,when the amount of advertisements is controlled,if the consumer has a low aversion to advertisements,in Pay-TV model,the government can set the amount at the social optimal level;under Membership model,it is necessary to set advertisement quantity higher than the social optimal level;in Free-to-air model,we need to set a higher level of advertisement when the advertising revenue is low.When consumers have a high degree of aversion to advertisements,a relatively low amount of advertisements should be set in the Pay-TV and Free-to-air models,and the amount should be controlled at the social optimal level under Membership model.(4)The government can also improve social welfare by controlling the number of platforms.Specifically,under the Pay-TV and Membership model,the government only needs to control the number of platforms at the level of social optimum.But in Free-to-air model,if the number of consumers who are not sensitive to advertisements is small,more platforms should be allowed to enter the market;otherwise,the number of platforms should be limited.