When to Share My First-party Content: the Role of Membership Bundles in Content Platforms

Content platforms suffer from declining subscriber growth. To address this issue, we examine an interesting strategy that competing platforms jointly launch a membership bundle, which provides consumers with simultaneous access to them at a reduced price. We investigate how the bundle approach interacts with first-party content production in shaping platforms’ pricing and content-sharing decisions. By solving a game-theoretical model, we illustrate that: first, competing platforms offer the bundle only when they are less differentiated. Second, in stark contrast with the consequence of keeping the content exclusive without the bundle, the platform is more likely to share its content with the membership bundle. Third, despite the exclusivity of first-party content, with the membership bundle, the rival platform may generate higher profit instead of always being harmed without the bundle. We enrich the understanding of how platform coopetition interacts with first-party content production and draw practical implications for platform owners.