Analyzing Monetization Models for the Digital Content Services: Channel Ownership and Royalty Contracts

Abstract

The formats and access models of digital content are increasingly rich and diverse as the advancement of internet and mobile technologies. In this paper, utilizing a game theoretic model, we analyze the adoption and monetization models of heterogeneous content channels (mobile and website content). The pricing and advertising strategies of pay and advertisement-supported content under different channel and content ownership structures are examined. Furthermore, under asymmetric content ownership (only one of two channels own the content), popular monetary transfer contracts are realized to license the opponent channel. The impacts of market parameters (such as quality differentiation and online advertisement factors) on the development of business strategies are presented.