{"title":"Whether to Add a Digital Product into Subscription Service?","authors":"Linlan Zhang, Yu Zhang","doi":"10.3390/jtaer19020048","DOIUrl":null,"url":null,"abstract":"Digital products companies are increasingly adopting subscription pricing, but consumers who pay the subscription service may not be able to access all digital products sold on the sales platform. This paper explores the question of why some digital products are not in the subscription service of the sales platform. To address this problem, we develop an analytical model to examine two strategies of the firm. One is that the firm does not add the new product into the subscription service, the other is that the firm adds the new product into the subscription service. By comparing the profits under two sets, we find the condition under which the firm should add the new digital product into the subscription service. The results show that if the percentage of existing subscribers is below a certain threshold, and the subscription price is over a certain threshold, it is better for the firm to add the new product into the subscription service. We also analyze how the main variables affect the firm’s profit and the piracy rate. Our research provides useful insights for firms in choosing pricing schemes for the newly released product and offers advice for policymakers on controlling the piracy rate of digital products industry.","PeriodicalId":46198,"journal":{"name":"Journal of Theoretical and Applied Electronic Commerce Research","volume":null,"pages":null},"PeriodicalIF":5.1000,"publicationDate":"2024-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Theoretical and Applied Electronic Commerce Research","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.3390/jtaer19020048","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0
Abstract
Digital products companies are increasingly adopting subscription pricing, but consumers who pay the subscription service may not be able to access all digital products sold on the sales platform. This paper explores the question of why some digital products are not in the subscription service of the sales platform. To address this problem, we develop an analytical model to examine two strategies of the firm. One is that the firm does not add the new product into the subscription service, the other is that the firm adds the new product into the subscription service. By comparing the profits under two sets, we find the condition under which the firm should add the new digital product into the subscription service. The results show that if the percentage of existing subscribers is below a certain threshold, and the subscription price is over a certain threshold, it is better for the firm to add the new product into the subscription service. We also analyze how the main variables affect the firm’s profit and the piracy rate. Our research provides useful insights for firms in choosing pricing schemes for the newly released product and offers advice for policymakers on controlling the piracy rate of digital products industry.
期刊介绍:
The Journal of Theoretical and Applied Electronic Commerce Research (JTAER) has been created to allow researchers, academicians and other professionals an agile and flexible channel of communication in which to share and debate new ideas and emerging technologies concerned with this rapidly evolving field. Business practices, social, cultural and legal concerns, personal privacy and security, communications technologies, mobile connectivity are among the important elements of electronic commerce and are becoming ever more relevant in everyday life. JTAER will assist in extending and improving the use of electronic commerce for the benefit of our society.