Header

UZH-Logo

Maintenance Infos

Optimal sampling of paid content


Halbheer, Daniel; Stahl, Florian; Koenigsberg, Oded; Lehmann, Donald R (2011). Optimal sampling of paid content. Columbia Business School 4609, University of Zurich.

Abstract

This paper analyzes optimal sampling and pricing of paid content for publishers of news websites. Publishers offer free content samples both to disclose journalistic quality to consumers and to generate online advertising revenues. We examine sampling where the publisher sets the number of free sample articles and consumers select the articles of their choice. Consumerslearn from the free samples in a Bayesian fashion and base their subscription decisions on posterior quality expectations. We show thatsampling enhances subscription demand only if consumers have low quality expectations in relation to actual quality. Taking advertising and subscription revenues into account, we find that the publisher should employ either a paid-only or a free content strategy when consumers have high quality expectations. When consumers have low quality expectations, employing a sampling strategy may be optimal for the publisher.

Abstract

This paper analyzes optimal sampling and pricing of paid content for publishers of news websites. Publishers offer free content samples both to disclose journalistic quality to consumers and to generate online advertising revenues. We examine sampling where the publisher sets the number of free sample articles and consumers select the articles of their choice. Consumerslearn from the free samples in a Bayesian fashion and base their subscription decisions on posterior quality expectations. We show thatsampling enhances subscription demand only if consumers have low quality expectations in relation to actual quality. Taking advertising and subscription revenues into account, we find that the publisher should employ either a paid-only or a free content strategy when consumers have high quality expectations. When consumers have low quality expectations, employing a sampling strategy may be optimal for the publisher.

Statistics

Downloads

88 downloads since deposited on 16 Apr 2013
25 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
JEL Classification:L11, L15, L21, M21, M30
Language:English
Date:2011
Deposited On:16 Apr 2013 11:40
Last Modified:05 Apr 2016 16:28
Series Name:Columbia Business School
Official URL:http://www.gsb.columbia.edu/whoswho/getpub.cfm?pub=4609
Other Identification Number:merlin-id:6262

Download

Download PDF  'Optimal sampling of paid content'.
Preview
Filetype: PDF
Size: 219kB