Pricing, competition and innovation: a profitable business model to resolve the tussle involved in peer-to-peer streaming applications

Abstract

Peer-to-peer (P2P) streaming applications have led to the disharmony among the involved parties: Content Service Providers (CSPs), Internet Service Providers (ISPs) and P2P streaming End-Users (EUs). This disharmony is not only a technical problem at the network aspect, but also an economic problem at the business aspect. To handle this tussle, this paper proposes a profitable business model to enable all involved parties to enlarge their benefits with the help of a novel QoS-based architecture integrated with caching techniques. We model the interactions, including competition and innovation, among CSPs, ISPs and EUs as a tripartite game by introducing a pricing scheme, which captures both network and business aspects of the P2P streaming applications. We study the tripartite game in different market scenarios as more and more ISPs and CSPs involve into the market. A three-stage Stackelberg game combining with Cournot game is proposed to study the interdependent, interactive and competitive relationship among CSPs, ISPs and EUs. Moreover, we investigate how the market competition motivates ISPs to upgrade the cache service infrastructure. Our theoretical analysis and empirical study both show that the tripartite game can result in a win-win-win outcome. The market competition plays an important role in curbing the pricing power of CSPs and ISPs, and this effect is more remarkable when the amounts of CSPs and ISPs become infinite. Interestingly, we find that in the tripartite game there exists a longstop at which ISPs may have no incentive to upgrade the cache service infrastructure. However, increasing the market competition level can propel the innovation of ISPs.