Changing the success of platforms like Netflix in the outside world

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Ensuring that different customers go to the intended local market, finding customers with a different and less expensive offer, and lowering costs. price competition between the platform and retailers is key to the success of online domain names, according to a new paper by Qiaoni Shi, Assistant Professor at the University of Bocconi, Milan, and Esther Gal- Or (University of Pittsburgh).

Sites like Spotify and Netflix are popular. Popular platforms often offer online services, but in some countries, brand names for new products and services are being phased out. For example, in the US, ClassPass offers subscribers fitness services, while MealPal offers a subscription for lunch at restaurants.

Unlike online subscription lists like Netflix, content is limited by location. In fact, the paper presents the first important thing to consider as the local market situation. The market is different in different cities. For example, competition among consumers may vary depending on shipping costs. In one market, customers may want to visit different stores due to the low cost of transportation, but in other cities, people may want to visit one or two nearby stores. due to the high cost.

The paper hopes to enter markets where consumers are isolated. In these markets, consumers can benefit in many ways. In addition, executives should consider markets where competition among customers is weak because in this case, the signing agreement can attract less strong customers in the short term. the platform, allowing both sides to benefit from the rest received from the platform. customers.

Another serious problem is that the thresholds do not work on the products. By charging subscribers a fixed fee, the platforms offer services from multiple customers. So the threshold and the customers are in a dual relationship. On the one hand, they combine in the way that the platform helps customers attract customers, but at the same time, they also compete on price to attract customers. .

Shi and Gal-Ar expect some developers to be able to reduce price competition between the platform and customers. Some of them are discussing a reasonable exchange rate for the customer to pay the customer, and others are limiting the number of platform customers that the customer will serve.

Professor Shi said it was underestimating the quality of the product offered by the customers. “When a retailer offers lower quality to customers than the quality they offer to its direct customers,” he said, “the platform is forced to compete. Stronger in prices. Out of position. “

The research is published in Navigation science.

The role of platform insurance in the economy

More information:
Esther Gal-Or et al, Designing entry points for enrollment sites, Navigation science (2022). DOI: 10.1287 / mnsc.2021.4251

Presented by Bocconi University

Directions: Duplicating the functionality of platforms like Netflix in the offline world (2022, April 4) Retrieved April 5, 2022 from -success-platforms-netflix-offline.html

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