Platform Monetization and Unintended Consequences for Digital Cultural Markets: Evidence from a Two-sided Market for Book Promotions
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Date
2023-01-03
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3500
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How can a platform capture the value it creates without damaging the balance of its ecosystem? In this study, we leverage a natural experiment on a platform market for books to examine the potential consequences of monetizing a popular promotional program run by the platform. Participating in this program was free for authors and publishers till January 2018, after which Goodreads enacted a policy change and began to charge a fixed participation fee. We collect large-scale data to analyze both the supply side (i.e., authors and publishers) and demand side (i.e., consumers) response to this monetization policy. We document several novel insights about the consequences of monetization that are above and beyond the traditional concern of network effects. Our findings highlight a more complex view of evaluating monetization and suggest that platforms need to counterbalance these effects by offering more flexible incentive structures for different players in its ecosystem.
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Crowd-based Platforms, cultural products, digital platform, platform monetization, two-sided market
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7
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Proceedings of the 56th Hawaii International Conference on System Sciences
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Attribution-NonCommercial-NoDerivatives 4.0 International
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