A creator platform utilizes marketing tools and pricing policies to maximize customer acquisition and revenue, with trade-offs among the creators, their audience, and the platform itself. In chapter “Referral Program Design”, we focus on how a platform can leverage a referral program to acquire new subscribers and maximize profit, and quantify the financial consequences of referral marketing with a structural model. The return from implementing a referral program for the creator is a function of the size of the monetary reward for successful referrals, and the price charged for new subscriptions. We find a substantial contribution of applying referral marketing to creators’ revenue, but this varies for specific types of content with different referral effectiveness and operation costs. Further, we document inverted-U shaped relationships for profit and demand as the size of referral rewards increase. Using counterfactual analysis, we highlight the disparity of profit-optimizing referral marketing design between creators and the platform since creators focus on short term profit while the platform focuses on long run user base growth. In chapter “Platform Commission Design”, we study the impact of platform commission changes on creators’ pricing decisions and quality. The same creator platform underwent significant adjustments to its commission policy. In August 2019, the platform increased its commission from 5% to 20% for all creators, and later allowed eligible creators to revert to the original 5% commission. Using a difference-in-differences approach, we examine the consequences of subsidizing eligible creators with a lower commission, and find a significant price increase induced by the commission cut, which contrasts sharply with classic prediction from third-degree price discrimination. If the initial commission increase altered market concentration, the subsequent reduction in commission could incentivize some creators to raise prices in order to reveal their status as high-quality content providers. This study suggests that changes in commission should be approached with caution due to their irreversible effects. Increasing commission while discriminating against a segment of creators shifts content and price distribution, potentially disadvantaging subscribers and reducing their welfare.
| Identifer | oai:union.ndltd.org:bu.edu/oai:open.bu.edu:2144/48834 |
| Date | 22 May 2024 |
| Creators | Zhao, Pu |
| Contributors | Zervas, Georgios |
| Source Sets | Boston University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis/Dissertation |
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