Delivery Consolidation and Service Competition Among Internet Service Providers

Author List: Chiang, I. Robert; Jhang-Li, Jhih-Hua;

Journal of Management Information Systems, 2014, Volume 31, Issue 3, Page 254-286.

The infrastructure of the Internet, by and large, is maintained by Internet service providers (ISPs) that cater to regional customers and by Internet backbone providers (IBPs) that serve large organizations and ISPs. Some IBPs have recently branched into content delivery network (CDN) services; separately, other ISPs have started offering on-demand video streaming to compete with pure-play content providers. These developments have intensified the competition in both content delivery and media-streaming markets. For the content delivery market, we study the competition equilibriums by analyzing factors such as market share, cost structure, service pricing, and subscriber preference. Our approach helps identify conditions under which a content provider should choose an IBP over the incumbent CDN for content distribution. We also show how an IBP’s CDN venture affects its interconnection relationship with ISPs. For the streaming service market, we examine conditions under which a content provider would partner with an ISP to lower operating and marketing costs while providing a more streamlined subscriber experience. Analytically, our game-theoretical models can optimize key contracting and pricing strategies for multiple classes of service providers; empirically, insights derived from the proposed models have anticipated events that coincide with several recent developments in content delivery and streaming service markets.

Keywords: content delivery network;Internet service provider;media streaming;peering and transit;service pricing

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List of Topics

#19	0.372	content providers sharing incentive delivery provider net incentives internet service neutrality broadband allow capacity congestion revenue cost efficient enhanced provides
#242	0.142	market competition competitive network markets firms products competing competitor differentiation advantage competitors presence dominant structure share using incumbent make important
#112	0.107	services service network effects optimal online pricing strategies model provider provide externalities providing base providers fee complementary demand offer derive
#246	0.101	strategic benefits economic benefit potential systems technology long-term applications competitive company suggest additional companies industry operating costs difficult substantial total
#108	0.084	model research data results study using theoretical influence findings theory support implications test collected tested based empirical empirically context paper
#211	0.078	service services delivery quality providers technology information customer business provider asp e-service role variability science propose logic companies especially customers
#54	0.055	approach conditions organizational actions emergence dynamics traditional theoretical emergent consequences developments case suggest make organization point outcomes recent trajectory claims