Piracy In A Two-sided Online Video Market

With the rapid development of video technology, online video has become the Internet industry’s most important services. Become one of the users favorite web services. In recent years, unauthorized dissemination of video works through a network of infringing activity intensified. Free to watch on the Internet and download video works become a very common phenomenon. In particular, some of the video-sharing sites, has become almost illegal distribution of video works hotbed. Video piracy is not only seriously infringed upon the legitimate rights and interests of the majority of video copyright owner, but also disrupt the normal order of the network video market, making online video copyright protection is facing increasing challenges. In this context, we study the problem of network video business pricing strategy under the impact of piracy through bilateral market theory.In this paper, based on the framework of a Two-sided market theory, we establish a duopoly model of an Internet video industry, and investigate the piracy impact under equilibrium conditions for equilibrium pricing, advertising levels, the number of consumers, the equilibrium profit, consumer surplus and social welfare. Study found that piracy influence the video viewers and content providers bilateral cross-network externalities intensity, thus affecting the pricing structure of the platform. In general, increased copyright protection efforts will make more content and obtain greater benefits, but at the same time increasing the copyright protection, will loss the number of consumers, and produce negative returns to content providers, this time the platform need to adjust pricing strategy to offset the adverse effects. After solving the model and analysis, we obtain the influence of piracy to companies, content providers and advertisers under the less intellectual property protection and the large intellectual property protection. In addition, with the copyright protection efforts increasing, consumer surplus and social welfare show the trend of first decreased and then increased. If the platform and content providers can offer more quality differentiated services, will increase consumer surplus and social welfare.Finally, based on the conclusions of this paper, combined model and numerical simulation results, make some proposals for the development of China’s online video industry, and points out the shortcomings of this study and the prospects for the future research.