Analysis Of Profit Model Of Media-services Providers In Two-sided Market

The network video industry has been born in China for only 14 years,and it has grown at an incredible rate.As of 2018,there have been 609 million user sizes and nearly 125 billion production values.But in stark contrast to the fast-growing number of users and industry output,all online video companies in China are still at a loss,and no one has achieved profitability so far.This paper focuses on the research and analysis of the profit model of Chinese online video companies.In the process of transforming the strategy of “traffic is king” from “enterprise strategy of “flow is king” to “balance of flow and profit”,how to optimize the profit model to reduce losses until profitability is realized.Firstly,the development process of the network video industry is analyzed,and the whole industry development period is divided into five stages: formation period,burst growth period,industry consolidation period,merger and acquisition integration period,and industry stability period.Then use Porter's five-force model and PESTEL analysis to conduct a comprehensive analysis of the company's strategic environment.Based on the bilateral market theory,the market structure characteristics,supply characteristics and pricing characteristics of network video enterprises are studied.It is clear that the bilateral market model of network video enterprises is based on the premise that the Coase Theorem is invalid.The user groups on both sides have obvious cross-network externalities,and the enterprise adopts a non-neutral tilt pricing strategy.Then,using the comparative analysis method,the payment policies of online video enterprise users in China and the United States were compared.The characteristics of the respective payment policies of the head enterprises of China and the United States(China: iQiyi,Tencent,Youku;USA: Netflix,Hulu,Amazon)were summarized,and then the horizontal comparison was made to find the Chinese and American markets in the users.The commonality and individuality of the paid ecological construction,summed up the innovation and deficiencies of Chinese enterprises in the construction of user-paid ecological construction.At the same time,this paper studies the characteristics and development of online video advertising in China,and concludes that online video advertising has five characteristics: wide audience,breakthrough time and space restrictions,various forms,forced information dissemination,and accurate delivery.In the operation,there are problems such as “not paying enough attention to user experience”,“repetition frequency is too high”,and “lack of cross-platform cooperation”.Based on the above analysis and research,the paper proposes corresponding profit model optimization suggestions based on the characteristics of users' paid income and advertising revenue,including “strengthening content quality construction,insisting that content is king” and “implementing according to user's individual needs.Strategic pricing,"strengthening copyright protection,improving copyright operation capabilities","sharing traffic resources,and expanding derivative value".Multi-market expansion is carried out while optimizing the existing bilateral profit model of the company.Finally,it is concluded that in the process of strategic transformation of China's online video enterprises,the enterprise profit model will focus on the expansion of user's paid income in the short to medium term,and finally realize the dual bilateral profit model with equal payroll income and advertising revenue.