Pricing in two-sided markets: a case study of Stavanger Aftenblad
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This thesis gives an introduction of the model Value Network and how this fits with two-sided markets. The authors present general price theory for value pricing and strategic pricing in two-sided markets, and give an introduction to the development of the newspaper industry in the last years. The purpose of the thesis is to answer the following research questions: 1. Can value pricing be used together with price theory for two-sided markets when pricing a platform? 2. By using the theory presented in question one, how can Stavanger Aftenblad price an online news edition? The thesis start by introducing the two price theories, and then put the main factors from each theory together in a table. This gives an indication of how they can work together. The authors conclude that using two-sided market theory to consider the factors that are special in pricing a platform (cross- and same-side effects, users sensitivity to quality and price, output costs and brand value) and applying these into the strategic pricing pyramid, which focuses on value for the customer, will be the best approach to the challenge of making a platform profitable. Pricing a platform is after all a matter of how to attract customers in order to create both same- and cross-side network effects. In the case study the authors look into the different methods of digital user payment, and through the discussion it is concluded that the metered access method, which gives away a given number of articles for free each month before the readers have to pay, is the best suited pricing method for Stavanger Aftenblads online edition. The authors also look into Stavanger Aftenblads possibilities for advertisers and how Target Advertising can be a solution to meet the reader’s sensitivity to quality and awareness towards advertisement. As a result this may increase the network effects present at the platform.
Master thesis in Business management