Online Movie Market Pricing Research

Nowadays,there has been a gradually stable oligopoly competition pattern in the two-sided market of video platform.Iqiyi?Youku?Tencent are in the first place of the two-sided market of video platform,while Mango TV?Douyin come out at the first of their alone subdivision field respectively.As the video platform develops,there has been a new rising subdivision section on the video platform,called online movie,which has caught more and more attention of all video platforms in the market.Because they all wish that more online movies on their own video platform can be accessed by users and then users will be more attracted by the platform.Then the video platform can obtain more members in order to improve its profit.Online movies represent the movies that can only be issued on the internet and video platform is the main channel where the online movies are issued.Meanwhile,the video platform provides a two-sided market for the users on the both sides of the platform.One side is audience and the other side is the content providers of the online movies.The video platform attracts more audience to be members of the platform by providing high-quality online movies.Meanwhile,the video platform will also allocate the revenue from online movies to the content providers of online movies in order to attract more content providers to enter the platform.And the revenue allocated to the content providers is decided by the effective clicks on the online films from audience and the price which the platform makes to the content providers of online movies for one click.This will bring new idea and direction to the research for the two-sided market.This paper adds the price of one click on the online movies on the foundation of two-sided literature researched by the previous scholars.Writer thinks it meaningful for analyzing the market of online movies further,because since the online movies appeared in 2014,Iqiyi has allocated the revenue from online movies to the content providers first in order to attract more content providers of online movies to enter its own video platform.In addition,the revenue allocated to the content providers is decided by the price which the platform makes to the content providers of online movies for one click to a large extent.So there should be some research about pricing schemes of the online films on the video platform.Furthermore,this paper also researches whether the video platform has the motivation to sign exclusive contracts with the content providers of online movies,which means that the content providers will have no choice but to enter its own platform.Writer thinks it meaningful because some online movies on the video platform is marked with “exclusively distributed” in reality.Therefore,this paper comes to a conclusion after researching the pricing scheme of the online movies that under the inertia condition and the monotonicity condition,when there are two video platforms competing in the two-sided market,the content providers who are indifferent between the two platforms will choose to enter both platforms,however,the residual value of the content providers is zero,which means that they are trapped into the competition bottleneck.Furthermore,the video platform has motivation to sign exclusive contracts with optimal proportion of content providers in the equilibrium and the optimal ratio is decided by maximizing the whole social welfare.In other words,in the equilibrium,the video platform will sign exclusive contracts with optimal proportion of content providers while the rest content providers will choose to enter both platforms and they will still be trapped into the competition bottleneck.Besides,the residual value of the content providers who sign the exclusive contracts will exceed zero.This is because the video platform which has exclusive online movies can attract more audience to become members of the platform,then the revenue allocated to the content provider will be naturally higher.Meanwhile,the profit of the video platform which choose to provide exclusive contracts will also be higher,which is because the video platform has a higher market power over the audience through the exclusive contracts so that it has ability to raise membership fee.To apply the conclusion of this paper to the reality,we can find that at the early stage of the development of the video platform,the platform had no ability to provide exclusive contracts,so the content providers of online movies mainly entered several big video platforms so that the movies could be watched by more audience,while nowadays,as the consciousness to pay for videos gradually enhances and the habit of paying for videos are cultivated by degrees.The status of the video platform in the two-sided market of online movies has been greatly expanded.And the video platform has the ability to choose to sign the exclusive contracts with some content providers in order to limit the competition.Eventually the profit of the video platform becomes larger and the content providers who sign the exclusive contracts also get higher residual value.So the content providers are trying to produce high-quality content to strive for the qualifications of exclusively distributed on the video platform.