Essays on product-introduction timing, pricing, advertising and piracy in contemporary media

This dissertation contains three essays that examine issues in the contemporary media environment.; The first essay investigates product introduction timing with specific reference to the motion picture industry. Every movie is released in theatrical format and later in video format. The question is to decide how long after the theatrical release should the video be released to the market. Although prior research has answered this question by concentrating on the need to prevent excessive cannibalization of theatrical revenues, it is shown here that this is not a sufficient condition. In addition to cannibalization the decision must be based on customers' expectations failing which movie profits are less than optimal.; The second essay considers a situation where a media program such as an internet site or a video-on-demand movie, can be offered in multiple viewing options to viewers. The options are differentiated only by the amount of advertising they contain and their price. It is shown how price discrimination can be achieved using advertising. In formulating the optimal strategy care is taken that the revenues obtained from the viewers and from the advertisers are both considered. The optimal number of options that should be offered and their price and level of advertising are found.; The third essay investigates the issue of software piracy. Piracy results in a loss of revenues because potential adopters may decide to pirate rather than buy the software. However it is found that under specific conditions, tolerating some amount of piracy can be beneficial. This is due to the fact that a software diffuses faster in the presence of piracy. The analysis is initially conducted for a monopoly setting and later extended to a competitive and multiple generation setting. In the latter two cases, relatively more piracy should be tolerated than in the monopoly case.