Membership bundles in content platforms: Bundle decision and content distribution

Abstract

We investigate an intriguing strategy where rival content platforms jointly launch a membership bundle that allows consumers to access both of their platforms at a reduced price. We highlight that this approach transforms the platform relationship from pure competition to coopetition. Using a game-theoretical model, we show how a membership bundle significantly influences additional content distribution and acquisition outcomes and the associated welfare implications. We further undertake various extensions to demonstrate the robustness of our findings. We enrich the understanding of platform coopetition and derive practical implications with relevance for both platforms and content providers.