Research On The Difference Competition Of Network Video Industry In China Based On Hotelling Model

Along with the rapid development of Internet, a variety of applications have emerged, Many Internet products have developed rapidly, network technology continues to upgrade and promote. Network video as one of the most important applications; also become the focus of research. With the birth of YouTube, the world has ushered in the upsurge of network video development, China’s online video sites also take advantage of the opportunity to develop.By the end of June 2015, the industry of Chinese network video user scale has reached 460 million, user growth rate was 6.5%, higher than the end of 2014 increase 70.93 million, network video users use rate was 73.2%. Following the instant communication, Search Engines, music and news, Network video was fifth application in our country. China’s online video was founded at the beginning of follow the United States video site YouTube, through a free viewing mode to attract the user’s eye. With the increase in the amount of users, the site operator’s spending is also growing rapidly, the bandwidth cost of video sites increased exponentially as the number of visitors increased. In order to ensure the normal operation of video sites, video sites have to find a new way to profit. Network video also attract attention of risk investment institutions, it has become more and more clear profit model, its income mainly from advertising, membership fees, copyright distribution and other value-added costs etc.. With the development of network video industry, more industry problems were exposed, such as Homogeneity, copyright, operating costs, the fuzzy dig profit model. After the 2008 financial crisis, a large number of video sites closed down and exit, a number of new enterprises gradually enter the network video industry, this surviving video website in users, traffic, and broadband, copyright competed fiercely. There are many video website early, the entry and excite is more flexible, the copyright protection consciousness is weak, the video resources can flow freely between the various video sites, it will not be bound by any vendor and copyright. With video copyright protection consciousness enhancement, corresponding policies and regulations also began to gradually improve, and consumers are starting to pay attention to the brand, perfect competition period, industry concentration is not high, the cost of video website mostly from bandwidth cost. Under the external impact, the market structure has changed the video site in addition to consider the cost of bandwidth, but also need to consider the huge cost of copyright. Therefore, it is necessary to carry out video site differentiation strategy, form a differentiated competitive advantage in the entire industry, the formation of a special video content, exclusive monopoly contribute the long-term development of the video site.This paper is divided into six chapters: the first chapter is the introduction part, explain the background and significance of the topic, the domestic and foreign research status of network video industry. In the second chapter, introduce the product differentiation theory, including horizontal and vertical differentiation, and the model of two kinds of product differentiation are summarized. The third chapter discusses the development status, characteristics, types, analyzing the network video industry revenue and cost structure, to conclude the monopolistic competition market structure of the network video industry, finally analyze the competitive differentiation status. The fourth chapter is the modeling part, Through the above analysis, the Hotelling model was determined, this paper also expand the original Hotelling model by adding a Network externalities parameters, it concludes that the network video industry manufacturers need maximize the difference between other video website. The fifth chapter is the empirical part of this paper, because the network video industry’s developing history is short and the data is not easy to get, so in the empirical part of this paper selected several typical case to analyses, Drawing the conclusion that manufacturer should make the maximizing difference, consistent with the theoretical model. The sixth chapter is the conclusion, makes a summary of this paper, introduces the writing ideas and research prospect, and emphasizes the necessity of competitive differentiation in network video industry. This paper hope that through the analysis of theory and practice to provide more useful and practical advice...