Bargaining and peering between network content/coverage providers

Abstract

Both content quality and market coverage have significant impacts on a network content provider’s revenue. In this paper, we present a preliminary study on how providers’ cooperation and adoption of special content can affect the content quality and market coverage. We first consider a baseline case, where providers have static contents and do not cooperate. We derive the providers’ coverages based on the quality of the contents and user subscription fees. Then we consider how cooperation and content sharing can help providers to improve their revenues. The key insight is that cooperation will be desirable when the providers’ total revenue is increased and properly shared by an inter-provider financial transfer. In the case of linear advertisement functions, cooperation will happen when providers have different abilities in generating advertisement revenue and have proper subscription fees. We further consider the dynamic content case, where a provider can introduce some high quality special content for a short amount of time to attract users to switch from one provider to the other. We show that the switching cost, the valuation of content, and time discount factor all play important roles in deciding the benefit of special content.