Versioning information goods of multi-channel publishers in two-sided markets

Abstract

Purpose - The purpose of this paper was to identify whether the two-sided nature of markets in both online and offline channels affects the versioning strategies of multi-channel publishers in the presence of channel substitutability. Design/methodology/approach - Using analytical models, the versioning of a multi-channel publisher is analysed, with consideration of advertising revenue and possible channel substitutability. Findings - The paper shows that not only the two-sided nature of the online market but also that of the offline market affects the versioning strategy online. Multiple online versions are desired when the offline advertising market shrinks and the online advertising market proliferates. In a reverse situation, providing one online version (for free) can be optimal. Originality/value - Previous studies on versioning have mostly considered only the information market per se. However, studies on two-sided markets have shown that analysis that focuses on a single side leads to analytical error due to inter-market network externalities. In this context, it is proven that advertising revenue is a critical factor in the publisher's decision whether to provide multiple online versions.