Florian Stahl @ October 6, 2012 12:48 pm

Pricing of Wireless Services: Service Pricing vs. Traffic Pricing

Weblog Category: Market Development

A research paper about pricing of wirekess services will appear soon in the journal Information System Research

Pricing of Wireless Services: Service Pricing vs. Traffic Pricing

By  Atanu Lahiri, Rajiv M. Dewan and, Marshall Freimer


As the ability to measure technology resource usage gets easier with increased connectivity, the question whether a technology resource should be priced by the amount of the resource used or by the particular use of the resource has become increasingly important. We examine this issue in the context of pricing of wireless services: should the price be based on the service, e.g., voice, multimedia messages, short messages, or should it be based on the traffic generated? Many consumer advocates oppose discriminatory pricing across services believing that it enriches carriers at the expense of consumers. The opposition to discrimination has grown significantly, and it has even prompted the U.S. Congress to question executives of some of the biggest carriers. With this ongoing debate on discrimination in mind, we compare two pricing regimes here. One regime, namely, service pricing, involves pricing different services differently. The other one, namely, traffic pricing, involves pricing the traffic (i.e., bytes) transmitted. We show why the common wisdom, that discriminatory pricing across services increases profits and harms consumers, may not always hold. We also show that such discrimination can increase social welfare.

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Florian Stahl @ August 20, 2012 5:09 pm

What Type of Social Media Personality Are You?

Stephanie Buck pubslished today an info graphic about the psychological types most likely to participate on specific social networks. More extroverts reported using Facebook than introverts, for instance. And people with inclinations toward Feeling spend more time browsing and interacting with people on Facebook, rather than those who tend toward Thinking. Read more…

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Florian Stahl @ July 12, 2012 6:17 am

Ushering Buyers into Electronic Channels: An Empirical Analysis

Weblog Category: Market Development

A research paper about electronic sales channels usage in a B2B setting will appear soon in the journal Information System Research

Ushering Buyers into Electronic Channels: An Empirical Analysis

by Nishtha Langer, Chris Forman, Sunder Kekre and Baohong Sun


Despite many success stories, B2B e-commerce penetration remains low. Many firms introduce electronic channels in addition to their traditional sales channels but find that buyer usage of the e-channel over time does not keep up with initial expectations. Firms must understand the underlying factors that drive channel usage and how these factors change over time and across buyers. Using panel data pertaining to the purchase histories of 683 buyers over a 43-month period, we estimate a dynamic discrete choice model in a B2B setting that (i) recognizes how price, channel inertia, and inventory change over time; (ii) allows buyers to dynamically trade off these factors when making e-channel adoption decisions; and (iii) takes into account buyer heterogeneity. We find that channel usage is both heterogeneous and dynamic across buyers. Our findings reveal the dynamic tradeoff between channel inertia and the adverse price effect, which interact in opposing directions as the e-channel grows more popular over time: price increases resulting from more bids deter buyers, whereas channel inertia built from sampling experience helps retain repeat buyers for the new channel. Second, we find that the buyers’ size and diversity influence purchase decisions, and the e-channel appears more attractive to small and/or diversified buyers. Based on our analysis, we postulate that the seller’s allocation decisions of products across channels, if not aligned with buyer behavior, can alienate some buyers. Based on the parameter estimates from the buyer response model, we propose an improved channel allocation that enables firms to selectively attract more buyers to the e-channel and improve revenues. Channel acceptance increases as a result of smart allocation when firms understand and account for individual buyers’ channel usage behavior.

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Florian Stahl @ May 16, 2012 7:55 pm

Mine Your Own Business: Market-Structure Surveillance Through Text Mining

A research paper about a new opportunity to “listen” to consumers in the market in general and to its own customers in particula (by mining user-generated content) will appear soon in the journal Marketing Science:

Mine Your Own Business: Market-Structure Surveillance Through Text Mining

By  Netzer, Oded, Ronen Feldman, Jacob Goldenberg, and Moshe Fresko.


Web 2.0 provides gathering places for internet users in blogs, forums, and chat rooms. These gathering places leave footprints in the form of colossal amounts of data. These data include consumers’ thoughts, beliefs, experiences, and even interactions. In this paper, we propose an approach to transform the Web 2.0 to a large, yet readily available, marketing field test. Exploring such online user-generated content offers the firm an opportunity to “listen” to consumers in the market in general and to its own customers in particular. By observing what customers write about the products in the category, the firm can get a better understanding of the market structure, the competitive landscape, and the features discussed about its and the competition’s products. The difficulty in obtaining such insights is that consumers’ postings are often not easy to syndicate. A decoding mechanism is needed in order to transform these raw qualitative data into meaningful knowledge. To address these issues, we developed an advanced text mining approach (called CARE) and combine it with semantic network analysis tools. We demonstrate this approach using two cases; sedan cars and diabetes drugs; generating sensible perceptual maps and meaningful insights, without interviewing a single consumer.

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Florian Stahl @ April 13, 2012 4:49 pm

Does Chatter Really Matter? Dynamics of User-Generated Content and Stock Performance

Weblog Category: Economics,Market Development

Wall Street Journal (WSJ) published today an article “Online Chatter That Moves Markets” in which Christopher Shea summarizes the findings of an recently appeared in the journal Marketing Science:

Does Chatter Really Matter? Dynamics of User-Generated Content and Stock Performance

By Seshadri Tirunillai and Gerard J. Tellis


This study examines whether user-generated content (UGC) is related to stock market performance, which metric of UGC has the strongest relationship, and what the dynamics of the relationship are. We aggregate UGC from multiple websites over a four-year period across 6 markets and 15 firms. We derive multiple metrics of UGC and use multivariate time-series models to assess the relationship between UGC and stock market performance.

Volume of chatter significantly leads abnormal returns by a few days (supported by Granger causality tests). Of all the metrics of UGC, volume of chatter has the strongest positive effect on abnormal returns and trading volume. The effect of negative and positive metrics of UGC on abnormal returns is asymmetric. Whereas negative UGC has a significant negative effect on abnormal returns with a short “wear-in” and long “wear-out,” positive UGC has no significant effect on these metrics. The volume of chatter and negative chatter have a significant positive effect on trading volume. Idiosyncratic risk increases significantly with negative information in UGC. Positive information does not have much influence on the risk of the firm. An increase in off-line advertising significantly increases the volume of chatter and decreases negative chatter. These results have important implications for managers and investors.

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Florian Stahl @ March 19, 2012 6:47 am

State of the News Media 2012

Weblog Category: Market Development,Technology

Recently the new annual report “State of the News Media 2012” got published.

The annual State of the News Media report is a comprehensive analysis of the health of journalism in America, which includes detailed analysis of eight different media sectors as well as an overview that identifies key trends and key findings of the essential statistics about news in the last year.


The State of the News Media 2012 is the ninth edition of our annual report on the status of American journalism.
This year’s study contains surveys examining how news consumers use social media and how mobile devcies could change the news business and an update on the rapid changes in community news. And each industry sector chapter consists of two parts: a summary essay, which tells the story of that sector, and a data section, which presents a full range of statistics graphically rendered. The report is the work of the Pew Research Center’s Project for Excellence in Journalism a nonpolitical, nonpartisan research institute funded by the Pew Charitable Trusts.

Chapters of the report:



By Amy Mitchell  and Tom Rosenstiel (taken from

The age of mobile, in which people are connected to the web wherever they are, arrived in earnest. More than four in ten American adults now own a smartphone. One in five owns a tablet. New cars are manufactured with internet built in. With more mobility comes deeper immersion into social networking.

For news, the new era brings mixed blessings.

New research released in this report finds that mobile devices are adding to people’s news consumption, strengthening the lure of traditional news brands and providing a boost to long-form journalism. Eight in ten who get news on smartphones or tablets, for instance, get news on conventional computers as well. People are taking advantage, in other words, of having easier access to news throughout the day – in their pocket, on their desks and in their laps.

At the same time, a more fundamental challenge that we identified in this report last year has intensified — the extent to which technology intermediaries now control the future of news.

Two trends in the last year overlap and reinforce the sense that the gap between the news and technology industries is widening. First, the explosion of new mobile platforms and social media channels represents another layer of technology with which news organizations must keep pace.

Second, in the last year a small number of technology giants began rapidly moving to consolidate their power by becoming makers of “everything” in our digital lives. Google, Amazon, Facebook, Apple and a few others are maneuvering to make the hardware people use, the operating systems that run those devices, the browsers on which people navigate, the e-mail services on which they communicate, the social networks on which they share and the web platforms on which they shop and play. And all of this will provide these companies with detailed personal data about each consumer.

Click Here to Continue Reading the Overview

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Florian Stahl @ October 2, 2011 7:35 pm

Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales

New Articles related to the Digital Economy in Management Science

Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales

By Erik Brynjolfsson, Yu (Jeffrey) Hu, and Duncan Simester

Many markets have historically been dominated by a small number of best-selling products. The Pareto principle, also known as the 80/20 rule, describes this common pattern of sales concentration. However, information technology in general and Internet markets in particular have the potential to substantially increase the collective share of niche products, thereby creating a longer tail in the distribution of sales. This paper investigates the Internet’s “long tail” phenomenon. By analyzing data collected from a multi-channel retailer, it provides empirical evidence that the Internet channel exhibits a significantly less concentrated sales distribution when compared with traditional channels. Previous explanations for this result have focused on differences in product availability between channels. However, we demonstrate that the result survives even when the Internet and traditional channels share exactly the same product availability and prices. Instead, we find that consumers’ usage of Internet search and discovery tools, such as recommendation engines, are associated with an increase the share of niche products. We conclude that the Internet’s long tail is not solely due to the increase in product selection but may also partly reflect lower search costs on the Internet. If the relationships we uncover persist, the underlying trends in technology portend an ongoing shift in the distribution of product sales.

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Florian Stahl @ September 15, 2011 3:08 pm

min & present The State of Digital Media – Volume 2

The report  The State of Digital Media – Volume 2 might be of interest for practitioners.

State of Digital Media Guidebook - Volume 2


From the business models that are working (and why) to the most important social media deals (meet the players) to the media sites with the most Uniques (and why), the State of Digital Media is a must-have guidebook for any content provider trying to make sense and real revenues from their digital play. This guidebook, from the publishers of min and paidContent, may be if interest for those in the content, sales, marketing and business units of forward-thinking media companies.

In addition to Digital Boxscores, social media monetization strategies, and profiles of online content leaders, they’ve aggregated the past two years of the most interesting and game-changing deals.

280 Pages

Table of Contents

  1. Research Findings
  2. The M&A Perspective from
  3. Digital Boxscores (Consumer and B2B)
  4. Profiles of Digital Leaders
  5. Social Media Deals (2008-2009)
  6. Monetizing Social Media
  7. Stage of Digital Advertising
  8. Points of View
  9. - Leveraging The Real-Time Web, by Samir Arora, Glam Media.
  10. - Building, And Crossing, The Digital Bridge: The Future Of The TV Industry, by Mitchell Berman, ZillionTV
  11. - Attention! Ready, Set, Web 3.0, by Jacqueline Leo, Peter G. Peterson Foundation
  12. - Media Companies: Evolve Or Fade Away, by Reggie Miller, ICED Media
  13. - Drive ROI With Data Intelligence, by Andy Monfried, Lotame
  14. - Finding Revenue Opportunities Within The Walled Garden, by John Rockwell, Access Intelligence
  15. - The Private-Label Media Future, by Aaron Shapiro, HUGE
  16. - Search Does Not Have To Be The Enemy On The Path Out Of The Recession, by Domenic Venuto, Razorfish
  17. - How To Turn Social Media Into A Friend For Media Companies, by Matthew Yorke, IDG Communications


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Florian Stahl @ September 8, 2011 6:18 pm

Media Revenues shift from advertising to paid content

Lara Sinclairs discusses in her article the market development of the Paid Content Market and analysed very important aspects of the success of Paid Content Business Modell:

“THE shift in media revenues from advertising to paid content will gain speed this year as mainstream media companies adjust their business models for new technologies and changing consumer habits, according to a report from global consulting firm Deloitte.

But some media companies have been slow to develop new revenue streams, most of which would come from digitising their content and making it available for instant access, according to David Willington, head of Deloitte’s Australian media division. “The revenue model might be shifting,” Willington says. “At the moment [new revenue streams are] still small.”

The report says revenue growth will be the most convincing reason for media companies to digitise their products, although some companies are not investing enough effort in understanding how the two things can be linked.

Willington nominates raw interviews conducted by journalists in all media as possible opportunities for paid podcasts, in addition to programs and archival content.

Radio, in particular, will be “on the cusp of significant change” this year, with new revenue opportunities in streamed content, subscription services, archive services and content aggregation, the report predicts.

Meanwhile, the global radio industry will follow television with the development of a subscription radio industry.

“The radio model should learn from the experience of television, which in some key markets evolved from advertising-dominated to subscription-dominated in just a few decades,” the report predicts.

Other key trends affecting the industry this year will include the continuing fragmentation of mass audiences, the global growth of new media including internet protocol television and mobile TV, and the development of a high-definition TV market.

While IPTV will “become a reality” in mature media markets including Australia this year, Willington predicts infrastructure problems relating to insufficient internet bandwidth and the low penetration of home media centre technology will prevent it becoming a real force for another three years. “For telecommunications companies it will be part of a triple play, including voice, data and video services,” Willington says.

“When homes have got the right infrastructure to receive IPTV, it will become a force in the market.”

The report sounds a note of caution about the global blogging phenomenon, predicting that the number of personal weblogs will exceed 60 million this year but average quality will decline. Advertising-funded “blog aggregators” will bring the best content together, doing the editing for the consumer.”

Source: The Australian

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