Abstract

Video streaming services have grown exponentially over the course of the last decade with 71% of Americans interviewed subscribing to at least one video streaming service each month. The market over the course of the last four years has grown exponentially. The market has become more competitive from the entrance of new firms yearly. In the past four years, the average revenue of the firms examined in this paper has nearly doubled. As such, firms have h historically been able to charge higher prices for video streaming services. However, with a broader selection of streaming services, consumers have grown more concerned with the monthly cost associated with streaming services. Video streaming services have begun to offer consumers an ad-supported subscription plan. This study examines the effect of the firm’s ability to price discriminate against consumers’ willingness not to pay for ads. The study presents a mixed bundling model, which the video streaming services offer their services. The study also utilizes empirical evidence to make assumptions of welfare implications behind the firm’s ability to use an ad-supported bundle.

Advisor

Tian, Huiting

Department

Business Economics

Disciplines

Advertising and Promotion Management | International Business | Other Business

Keywords

Video Streaming, Bundle, Ads, Social Welfare

Publication Date

2023

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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