{"title":"Dynamic decision-making analysis of Netflix's decision to not provide ad-supported subscriptions","authors":"Yufei Zhou , Sihan Wang , Nuo Zhang","doi":"10.1016/j.techfore.2022.122218","DOIUrl":null,"url":null,"abstract":"<div><p>Netflix is a leading digital streaming platform that provides a variety of content to users. Netflix charges a fixed amount from its users for its services. Unlike other digital streaming platforms, Netflix does not support subscriptions supported by ads; consequently, Netflix's subscriptions are decreasing. However, Netflix does not offer ad-supported subscriptions. In this context, we aimed to explain why Netflix does not provide them by modelling a monopolist's decision-making using asymmetric information. We compared a shutdown policy with other strategies using the first-best contract with complete information as the benchmark. The results indicate a close relationship between the customer base and the efficiency of the shutdown policy. This outcome at least partly explains Netflix's choice of strategy, its past success, and its current dilemma.</p></div>","PeriodicalId":48454,"journal":{"name":"Technological Forecasting and Social Change","volume":"187 ","pages":"Article 122218"},"PeriodicalIF":13.5000,"publicationDate":"2023-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Technological Forecasting and Social Change","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0040162522007399","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2022/11/29 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 2
Abstract
Netflix is a leading digital streaming platform that provides a variety of content to users. Netflix charges a fixed amount from its users for its services. Unlike other digital streaming platforms, Netflix does not support subscriptions supported by ads; consequently, Netflix's subscriptions are decreasing. However, Netflix does not offer ad-supported subscriptions. In this context, we aimed to explain why Netflix does not provide them by modelling a monopolist's decision-making using asymmetric information. We compared a shutdown policy with other strategies using the first-best contract with complete information as the benchmark. The results indicate a close relationship between the customer base and the efficiency of the shutdown policy. This outcome at least partly explains Netflix's choice of strategy, its past success, and its current dilemma.
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