Research On Product Differentiation Competition Of China’s Mobile Music Platform

With the advancement of mobile internet technology,various mobile phone APP have emerged one after another,and many applications based on mobile internet technology have developed rapidly.China has entered the era of mobile interconnection.As of the first half of 2018,the number of mobile Internet users in China was 788 million,and the proportion of mobile Internet users continued to climb to 98.3%.As one of the important applications in the era of mobile interconnection,mobile music APP has become the focus of the cultural entertainment industry.The development of the mobile music APP market has gone through a series of processes,from complete competition to oligopoly,from disorderly chaos to gradual regulation.However,at this stage,there is still the problem of homogenization of content,homogenization of functions,low user payment rate,and lack of effective profit model.Therefore,it is imperative for mobile music APP to implement product differentiation strategy.This paper aims to demonstrate the positive significance of product differentiation on the competition of mobile music APP through qualitative analysis,mathematical model derivation and case analysis.This article mainly includes five parts: First of all,it expounds the research background,purpose,significance,framework structure,content,methods,innovation and deficiencies of the article.At the same time,it has combed the research on the two aspects of mobile music platform and product differentiation.The research in this paper is opened on the basis of the existing literature.Secondly,the theoretical basis of this paper is elaborated from product differentiation and bilateral market theory.It is clear that the research goal of this paper focuses on horizontal product differentiation competition among mobile music platforms.Thirdly,it probes into the development situation and market characteristics of mobile music platform: analyzes the present situation and existing problems of mobile music platform,constructs the industrial ecosystem centered on mobile music platform as a research closed-loop,analyzes the income-cost,bilateral market characteristics and market competition structure of the APP in this closed-loop.Through the above analysis,the necessity of implementing product differentiation strategy is introduced,and the differentiated competition strategy of the platform is combed.Fourthly,the differentiation competition of the platform is deduced and analyzed through mathematical model: based on the traditional hotelling model,considering the characteristics of the research object’s bilateral market,the extended hotelling model is constructed,including network externality coefficient,user price sensitivity,product differentiation degree and other factors.Combined with the user attribution problem existing in the actual situation,the situation is deduced and analyzed to demonstrate the role of product differentiation in platform competition.Finally,a case study is conducted using Netease APP as an example.Speak with facts,review how Netease enters the market,how to implement differentiated strategies,gain market share in the competition,demonstrate the important role of product differentiation in enterprise competition.Summarize experience and provide suggestions for the development of mobile music platform.Concluded: first,mathematical model derivation: In the steady state,when the degree of differentiation of the two platforms is the same and meets 2α<t<3α,both the user market and the vendor market,the multi-user attribution structure is superior to the single-user attribution structure for the platform.In the competitive state,that is,when the degree of product differentiation is different,regardless of the user’s attribution,the platform for pricing and increase market share considerations have the motivation to implement product differentiation strategy.The platform implements product differentiation strategy to participate in market competition.The greater the network externality effect is,the greater the profit the platform can obtain.The higher the price sensitivity of users,the lower the profit of the platform.Therefore,when implementing the product differentiation strategy,the platform should cooperate with the network externality and take into account the price sensitivity of users in order to obtain higher profits.Second,Case analysis: Netease uses the product differentiation strategy and cooperate with the network externality effect brought by the "social" attribute,breaks the industry barrier and enters the market successfully,and gradually gains a firm foothold in the market.Based on mathematical model derivation and case analysis,the positive effects of product differentiation are demonstrated.With the cooperation of positive network externalities,product differentiation can improve the platform’s profitability to a greater extent.