Title: Optimal Design of Content Samples for Digital Products and Services
Abstract: The marketing of creative content such as books, video and music through the provision of free samples of content is emerging as a very common practice with the rapid penetration of broadband technology. Clearly, the motivation for providing free samples in any form, preview/highlights or the entire content, is increased revenue - either through the sales of digital products or through subscription revenue or advertising revenue, as in the case of digital services. Yet the mechanism(s) through which the increases revenue is realized (if at all) is an under-researched topic. This is critically important for some content producers because if the strategy of free content is not properly implemented they might end up cannibalizing their revenue stream significantly. On the other hand, if the strategy is implemented correctly it can also lead to increased sales as well as customer welfare. In this paper, we develop a framework to understand the mechanisms through which free samples impact revenue generation in the case of creative content, specifically books (digital products) and video content (digital services). We develop analytical models that determine the conditions under which it is optimal for content providers to provide free samples, and how the provision of free samples impacts the marketing mix, specifically pricing decisions. We also test empirically the normative implications of the analytical models by collecting actual data from content marketers - specifically books - using field experiments.
This is an on-going project, paper is not available.
Dr. Kannan is the Ralph J. Tyser Professor of Marketing Science and the Chair of the Marketing Department at the Robert H. Smith School of Business. His current research stream focuses on new product/service development, design and pricing digital products and product lines, marketing and product development on the Internet, e-service, and customer relationship management (CRM) and customer loyalty. His research has won the prestigious John Little Best Paper Award (2008) and the INFORMS Society for Marketing Science Practice Prize Award (2007). His research has also been selected as a finalist for the Paul Green Award (2008).
Dr. Kannan serves on the editorial boards of the Marketing Science, Journal of Marketing, Journal of Service Research, and International Journal of Electronic Commerce. Dr. Kannan has served as the Chair for the American Marketing Association SIG on Marketing Research.
For more informatoin on Dr. Kannan, visit his webpage: http://www.bmgt.umd.edu/marketing/faculty/kannan.aspx