Research On Payment Service Of Video Website Based On Comparative Static Analysis

After more than ten years of development,the online video industry has become a very influential media and Internet application in China.In order to solve the problem of high operating cost and single profit model,main video websites have launched paid services,and achieved initial results in 2015.Although it has been facing losses,the huge traffic still attracts investors’attention.In addition to the greater application value,video sites have greater research value.First,video sites have a variety of profitable methods that allow video sites to choose different development strategies.Second,video sites have the characteristics of a bilateral market,but their cross-network externalities are asymmetric,which is different from other bilateral markets,which making the problem more complicated.Through the research on bilateral market and its pricing,video website operation mode,online video users’willingness to pay,advertising research and other related literatures,the theoretical model of video website payment mode is determined,and the research is carried out by comparing static methods.First,through the analysis of the payment mode of the video website industry,and draws the conclusion that the paid users are more valuable to the website than the average users;then based on the theoretical framework of bilateral market and the classical Hotlin model,the competition between users and vendors on two video sites is described as a three-stage game model.The analysis conclude is that the video sites will definitely choose to play the advertisements and the number of advertisements and program quality selected by the two websites is identical under the free mode.Under the payment mode,the video website will or not choose to play the advertisement depends on the interference cost of users.Regardless of whether or not the advertisement is played,the quality of program and service provided by the two websites,the fee charged to each paying user,the quality of the program provided for the ordinary users,and the number of advertisements inserted in the program is identical.In the competitive mode,what determines the profit of video website is the degree of difference between websites and the degree of difference between users on advertisements.The conclusion of the dissertation provides theoretical support for the development of paid services for video websites.It is believed that websites should improve program quality and service levels under the context of expanding user scale.Whether it is a free mode or a paid mode,the website should adopt differentiate competitive strategy continually.If the degree of differentiation is large,the website can increase the number of advertisements as making decisions by increasing the viewing fees for paying users and while not have to rely on low cost,and then achieving a win-win situation.The website should also minimize the interference of the advertisement on the user by adj usting the duration of the advertisement,the method of inserting the video,etc.,while the number of advertisements remains unchanged.