Content Licensing with Endogenous Homing

Lu, Qiuyu (2022): Content Licensing with Endogenous Homing.

Abstract

This paper examines the licensing strategy of a monopoly content provider that supplies horizontally differentiated content through downstream distributors to consumers who can potentially purchase from both distributors. When consumers' additional gain from the second purchase is high, the mismatch cost is low, and the quality of the extra content is high, some consumers purchase from both firms, which is called multi-homing. Apart from that, all consumers purchase from either distributor. When some consumers multi-home, the content provider always licenses to only one distributor. When all consumers single-home, the content provider either licenses to one distributor or shares the licensing.

• Item Type: MPRA Paper
• Language: English
• Keywords: Multi-homing, Licensing, Exclusive Dealing, Digital Content, Online Platform
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L4 - Antitrust Issues and Policies > L42 - Vertical Restraints ; Resale Price Maintenance ; Quantity Discounts

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