Advances in Economics, Management and Political Sciences

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Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 35 , 10 November 2023


Open Access | Article

Tencent’s Success in Video Streaming: An Economic Theory-based Analysis

Haoyuan Zhou * 1
1 University of North Carolina at Chapel Hill

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 35, 92-97
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Haoyuan Zhou. Tencent’s Success in Video Streaming: An Economic Theory-based Analysis. AEMPS (2023) Vol. 35: 92-97. DOI: 10.54254/2754-1169/35/20231731.

Abstract

With the rise of internet technology and the popularity of mobile devices, the video industry has become an increasingly important part of the global entertainment landscape. This paper discusses the pricing strategy of Tencent in the video streaming industry. The paper states that Tencent has used the Bertrand Model to set prices equal to marginal costs to attract customers and expand its market share. However, in the case of Tencent Video’s subscription price hike, the Cournot Model may be more applicable as the firm assumes that customers will continue to subscribe during the pandemic period. Despite the subscription price increase, the change in the price would be larger than the change in demand, leading to higher profits. The article also discusses the increase in demand for Tencent Video memberships and the factors contributing to it. From a game theory perspective, Tencent and its members can be modeled as playing a classic prisoner’s dilemma game. Finally, the article discusses the opportunity cost for consumers and the concerns regarding the fairness of the increase in membership fees. This paper also utilizes the SWOT analysis.

Keywords

video streaming industry, pricing strategy, economic models

References

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7. Sticky Prices: Why Firms Hesitate to Adjust the Price of Their Goods - Federal Reserve Bank Of New York. https://www.newyorkfed.org/research/current_issues/ci13-10.html, last accessed 2023/4/25.

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-091-2
ISBN (Online)
978-1-83558-092-9
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/35/20231731
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated