Research On Horizontal Merger’s Effects On Pricing Of Online Video Sites

Despite the rapid expansion of the online video industry in China during the last ten years since 2005,low levels of profitability remains the greatest problem for the industry:most online video sites in China are still sadly crippled by the manacles of high input and chains of low output.Therefore,with the further development of the industry and the increasing competition within the industry,many online video sites start to seek cooperation for their survival so that cases of horizontal merger among them has become a very common phenomenon.The thesis intends to study the impacts of horizontal merger on the price fixing of online video sites,contributing to the sound growth of the industry in China and providing reference for the further study in this area.The structure of the thesis is as follows.Firstly,a summary has been offered on the domestic and foreign research previously made on the online video sites and two-sided market theory which is the theoretical framework for the whole thesis.Secondly,great efforts have been devoted to analysis on the profit models of online video sites and the features of two-sided markets.Thirdly,penetrating insights have been given into the factors which would affect the price fixing of online video sites through the establishment of a pricing model.Fourthly,by further applying the pricing model to two online video sites which are about to merger,the thesis provides insightful comparative analysis on the effects that the horizontal merger has on video sites price fixing and brings to following conclusions:In a case of horizontal merger,when two parties share the same group of users and advertisers,users would enjoy lower prices fixed by the newly-integrated video site for content per unit time after the horizontal annexation;advertisers would pay higher prices for access to the newly-integrated site.Finally,efforts have been devoted to the verification of the above conclusions with recourse to data collected from the case of Youku-Tudou annexation.Moreover,an outlook has also been given for further study in this field.