The Vertical Integration Strategy of Online Video Platforms:Motivations,Mechanisms and Competitive Effects
In recent years,online video platforms have adopted vertical integration strategies.Most existing research regards online video platforms as a combination of video content providers and video operators.However,video content providers,as independent participants,hold a market position equal in significance to advertisers.This has led the bilateral market structure of online video platforms to shift towards a three-sided market structure.In this context,exploring the underlying mechanisms and competitive effects of implementing vertical integration strategies on online video platforms is of great significance for improving the normalized regulatory framework of the platform economy and promoting its sustainable and healthy development.This paper explains the characteristics of the three-sided market structure of online video platforms and analyzes the motivations and operational mechanisms for implementing vertical integration strategies.Furthermore,it constructs a tripartite game-theoretic model under monopoly and duopoly competition scenarios to analyze the competitive effects of these strategies.Additionally,based on the two methods of obtaining video content-purchasing and self-production,this paper combines industry data to verify the impact of vertical integration strategies of platforms.The results indicate that implementing a vertical integration strategy of online video platforms can enhance consumer utility,increase the number of platform users,and internalize network externalities to optimize platform pricing.Therefore,online video platforms are incentivized to adopt vertical integration strategies.Furthermore,such strategies can increase advertising views and content revenue sharing.However,due to the constraints of integration costs,online video platforms face limits to their expansion.The profit levels of integrated platforms and the overall social welfare exhibit a trend of"decreasing before increasing"with the addition of new self-produced video content.Meanwhile,the vertical integration strategy does not inherently undermine market competition or social welfare.In asymmetric game scenarios,integrated platforms can achieve excess profits by redistributing surplus from users on all sides.In symmetric games,however,platforms cannot gain a higher market share than competing platforms through vertical integration,thereby limiting their competitive advantages.Their vertical integration behavior only influences the redistribution of surplus among market participants.Therefore,anti-monopoly regulatory decisions regarding the vertical integration behavior of platforms should be made flexibly,based on the specific market environment and regulatory objectives.
online video platformsvertical integrationcompetitive effectsplatform regulation
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