The Impact of Consumer Multi-homing on Advertising Markets and Media Competition

Athey, Susan; Calvano, Emilio; Gans, Joshua S.

doi:10.1287/mnsc.2016.2675

Cited by 157 publications

(111 citation statements)

References 29 publications

Supporting

Mentioning

105

Contrasting

Order By: Relevance

“…Athey et al (2016) and Ambrus et al (2016) study endogenous homing in media markets on the ad-side (keeping the consumer side exogenously fixed), whereas Jeitschko and Tremblay (2017) model competition between platforms to attract agents on both market sides and allow both to make their homing decisions endogenously.…”

Section: Multihoming: the Benefits And Implicationsmentioning

confidence: 99%

Platform Architecture and Quality Trade-offs of Multihoming Complements

Cennamo

Özalp

Kretschmer

2018

Information Systems Research

195

142

View full text Add to dashboard Cite

Multihoming -the decision to design a complement to operate on multiple platforms -is becoming increasingly common in many platform markets. Perceived wisdom suggests that multihoming is beneficial for complement providers as they expand their market reach, but it reduces differentiation among competing platforms as the same complements become available on different platforms. We argue that complement providers face tradeoffs when designing their products for multiple platform architectures -they must decide how far to specialize the complement to each platform technological specifications. Because of these tradeoffs, multihoming complements can have different quality performance across platforms. In a study of the US video game industry, we find that multihoming games have lower quality performance on a technologically more complex console than on a less complex one. Also, games designed for and released on a focal platform have lower quality performance on platforms they are subsequently multihomed to. However, games that are released on the complex platform with a delay suffer a smaller drop in quality on complex platforms. This has important implications for platform competition, and for managers considering expanding their reach through multihoming. The logic is that multihoming offers potential additional revenues at limited costs for complementors, implicitly assuming that complements are the same on different platforms. But many platforms are not simple (two-sided) markets enabling transactions; they are also technology infrastructures whose features shape the development of third-party complementary products (Anderson et al. 2014;Gawer 2014, Tiwana et al.2010, Yoo et al. 2010. 2 Complements frequently must be tailored to a platform's core technological functions and interface specifications to take full advantage of its performance (Anderson et al. 2014, Claussen et al. 2015b, Tiwana 2015. In developing for multiple platforms, complementors must decide how far to specialize the complement to one platform (Schilling, 2000, Tiwana 2015, Yoo et al. 2010. We ask how the tradeoffs complementors face when designing products for multiple platforms affect the quality performance of multihoming complements across platforms. , Tiwana et al. 2010, Gawer 2014. As a system comprises the platform and its complements, the effect of platform architecture on both platform performance and complement supply matters for value creation at the system level (Cennamo 2016). the core technology components (e.g., processor cores), and the larger the number of specialized processors requiring a specific programming language for optimal utilization (i.e., no clean interface to handle the interdependencies), the more complex the platform. Complement developers must therefore choose to either use that language to optimally "conform" (Tiwana 2015) to the complex platform's specifications at the expense of integration and performance on other platforms, or to design the complement so it uses the lowest common denominator acr...

show abstract

Section: Multihoming: the Benefits And Implicationsmentioning

confidence: 99%

Platform Architecture and Quality Trade-offs of Multihoming Complements

Cennamo

Özalp

Kretschmer

2018

Information Systems Research

195

142

View full text Add to dashboard Cite

show abstract

“…Then there will be no competition between the platforms in the advertising market, given that the advertisers can reach any given consumer only through one particular media platform. However, recent contributions by Ambrus et al (), Athey et al (), and Anderson, Foros, and Kind (, ) allow media consumers to multihome (buy more than one newspaper). An interesting path for future research would be to investigate how this will affect the consequences of taxing digital goods.…”

Section: Resultsmentioning

confidence: 99%

“…Recent contributions in the context of media markets include Ambrus, Calvano, and Reisinger (), Athey, Calvano, and Gans (), and Anderson, Foros, and Kind ().…”

mentioning

confidence: 99%

Taxation in digital media markets

Kind

Koethenbuerger

2017

J Public Economic Theory

View full text Add to dashboard Cite

We are grateful for helpful comments by two anonymous reviewers. The usual disclaimer applies.Hans Jarle Kind, Norwegian School of Economics, Helleveien 30, 5045 Bergen, Norway (hans.kind@nhh.no).Marko Koethenbuerger, ETH Zurich, Leonhardstrasse 21, 8092 Zurich, Switzerland (koethenbuerger@kof.ethz.ch).Digital media goods and digital media platforms exhibit cost structures and network effects that might imply that price and quantity effects of consumption taxes are qualitatively different compared to what we typically find for physical goods. For instance, in most European countries and U.S. states, printed newspapers and books face favorable value added taxes (VATs) or sales taxes. This has probably increased their circulation. In contrast, reducing the VAT rate on digital newspapers has the opposite effects; it increases prices and leads to lower sales. This is not true for ebooks, but a low-tax policy is still ineffective if the aim is to reduce prices. The primary effect of exempting ebooks from VATs is to increase profits for publishers.

show abstract

“…4 The rise of online advertising throughout the 2000s, particularly on portals such as Yahoo and on search engines such as Google, accounted for a significant amount of this drop. At the same time, as shown in Athey et al (2016), as online media consumption increases, the number of switching consumers increases and ad revenue for content providers falls. In addition, many newspapers were affected by the entry of Craigslist, a website that provides online classified listings, in most cases for free.…”

Section: Empirical Settingmentioning

confidence: 96%

Repositioning and Cost-Cutting: The Impact of Competition on Platform Strategies

Seamans

Zhu²

2017

Strategy Science

View full text Add to dashboard Cite

Please scroll down for article-it is on subsequent pagesWith 12,500 members from nearly 90 countries, INFORMS is the largest international association of operations research (O.R.) and analytics professionals and students. INFORMS provides unique networking and learning opportunities for individual professionals, and organizations of all types and sizes, to better understand and use O.R. and analytics tools and methods to transform strategic visions and achieve better outcomes. For more information on INFORMS, its publications, membership, or meetings visit http://www.informs.org STRATEGY SCIENCEVol. 2, No. 2, June 2017, pp. 83-99 http://pubsonline.informs.org/journal/stsc/ Abstract. Organizational structures are increasingly complex. In particular, more firms today operate as multisided platforms. In this paper, we study how platform firms use repositioning and cost-cutting in response to competition, elucidate external and internal factors that constrain or enable these responses, and examine how the firms' responses affect their performance. Our empirical context is the U.S. newspaper industry, which has experienced increased competition following the entry of Craigslist, an online provider of classified ads. We find that when Craigslist enters a newspaper's market, the newspaper repositions itself away from other newspapers by changing its content. This results in greater differentiation between newspapers in a market, but occurs primarily in markets in which reader preferences are heterogeneous. When reader preferences are homogeneous, newspapers are more likely to engage in cost-cutting. Both responses are more pronounced for newspaper firms whose sister firms have already experienced Craigslist's entry. We also find that failure to design the right response harms competitive viability. These findings offer important implications for many platform firms operating in today's digital economy. Supplemental Material:The online appendix is available at https://doi.

show abstract

The Impact of Consumer Multi-homing on Advertising Markets and Media Competition

Cited by 157 publications

References 29 publications

Platform Architecture and Quality Trade-offs of Multihoming Complements

Platform Architecture and Quality Trade-offs of Multihoming Complements

Taxation in digital media markets

Repositioning and Cost-Cutting: The Impact of Competition on Platform Strategies

Contact Info

Product

Resources

About