Economic models of sponsored content in wireless networks with uncertain demand

Abstract

Due to copyright restrictions, the access to the full text of this article is only available via subscription.The interaction of a content provider with end users on an infrastructure platform built and maintained by a service provider can be viewed as a two-sided market. Content sponsoring, i.e., charging the content provider instead of viewers for resources consumed in viewing the content, can benefit all parties involved. Without being charged directly or having it counted against their monthly data quotas, end users will view more content, allowing the content provider to generate more advertising revenue, extracted by the service provider to subsidize its investment and operation of the network infrastructure. However, realizing such gains requires a proper contractual relationship between the service provider and content provider. We consider the determination of this contract through a Stackelberg game. The service provider sets a pricing schedule for sponsoring and the content provider responds by deciding how much content to sponsor. We analyze the best strategies for the content provider and service provider in the event that the underlying demand for the content is uncertain. Two separate settings are defined. In the first, end users can be charged for non-sponsored views on a per-byte basis. In the second we extend the model to the more common case in which end users purchase data quotas on a periodic basis. Our main conclusion is that a coordinating contract can be designed that maximizes total system profit. Moreover, the additional profit due to sponsoring can be split between the content provider and service provider in an arbitrary manner

On Optimal Two-Sided Pricing of Congested Networks

“…where dS m (p) dp = −m(p) by the definitions of S m (p) and m(p) in Equation (7) and (2). Similarly, the impact of the CP-side price q on social welfare W is ∂W (p, q, µ) ∂q…”

“…Since the sponsorship offers a way for CPs to subsidize their users and indirectly transfer value to APs, it could be seen as a variant of the two-sided pricing model. Some work [2,14,29] have studied this variant and showed that it benefits both CPs and APs. Because APs charge users different prices for content traffic from different CPs, the sponsored data plan is also considered as a type of price discrimination in disguise and has raised concerns from the FCC who says that they will be monitoring and prepared to intervene if necessary [18].…”

On-line profit-maximization algorithms for managing sponsored content in cellular networks

“…Other papers [5], [12], [13] study sponsored content in relation to different notions of net neutrality. Paper [1] focused on an off-line setting where the content provider has to decide in advance how much content it is willing to sponsor during an upcoming month. Accesses to the content are charged against this amount until it is depleted at which point end users have to revert to paying for access.…”

“…Previous work (e.g. [1]) has analyzed sponsored content in an offline setting where sponsoring decisions are made before requests for traffic arrive. The goal of this paper is to propose a model for how sponsored content could work in an online setting where sponsoring decisions are made in real-time as traffic requests arrive.…”

Sponsoring content: Motivation and pitfalls for content service providers

“…In fact, there are currently few academic works directly related to this new pricing strategy. From the economic point of view, Andrews et al [13] studied the contractual relationship between the service providers and content providers. They modeled the interaction between the service providers and the content providers as a Stackelberg game with random demand.…”