Platform strategies and user stickiness in the online video industry

Publication date: Available online 19 February 2019Source: Technological Forecasting and Social ChangeAuthor(s): Ke Rong, Fei Xiao, Xiaoyu Zhang, Jingjing WangAbstractIn this paper, we explore determinants of user stickiness in the online video industry through platform theory. The online video industry mainly comprises two patterns of business model: the merchant platform and the two-sided platform. We build a theoretical model based on platform and Hotelling theories to explore the essential difference between the two kinds of business model. Then, we successfully verify the predictions of our theory using empirical analysis based on the data of the two most representative examples of the two models: IQiYi (merchant platform) and Bilibili (two-sided platform). We can draw the following conclusions: 1) the network effect is stronger in the two-sided platform than in the merchant platform, and an indirect network makes customers more multi-homing; 2) appropriability resources are essential for user stickiness in both models; and 3) price is not a significant influencing factor in user stickiness.

Source: Technological Forecasting and Social Change - February 19, 2019 Category: Science Source Type: research