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Information Systems and e-Business Management

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01.03.2012 | Original Article

A tale of two pricing systems for services

verfasst von: Kelly Lyons, Paul R. Messinger, Run H. Niu, Eleni Stroulia

Erschienen in: Information Systems and e-Business Management | Ausgabe 1/2012

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Abstract

Due to advances in technology and the rapid growth of online service offerings, various innovative web-based service models and delivery methods have appeared—including several free services. It is not always clear whether and how these emerging mechanisms for online service delivery will result in profitable businesses. In this paper, with an eye towards beginning to understand the issues involved, we present an analytical model of rational customer choice between available service plans. In particular, our model predicts how a monopoly service provider should devise its plans, if it understands such customer behavior. We then describe how this model would need to be extended in order to reflect increasingly inexpensive and even free service offerings.

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Note that, in addition to the base (e.g., monthly) fee, a further fixed fee could also be charged for the cost of the initiation of the services (for example a one-time fee for a device or a set-up or registration fee), which we may consider subsumed in F _i. One advantage of abstracting to a one-period model is that the fixed fee can describe both a one-time initiation fee or a periodic fixed access fee.

In principle, the provider’s costs might be decreasing functions of h _i when we describe self-service, and the revenues might be increasing functions of h _i (in some way) when we describe advertising. We omit such considerations here, and leave these possibilities to future research. In addition, for the remainder of this section (for homogenous and heterogeneous customers), we set h _i = 0.

More recently, Twitter announced a revenue-generating relationship that will give Microsoft and Google the rights to index Twitter data (Liedtke 2009b) with users continuing to participate in the service for free.

http://www.skype.com/help/guides/p2pexplained/.

In July 2010, Sysomos was acquired by Marketwire–http://www.marketwire.com/press-release/Marketwire-Acquires-Sysomos-1286185.htm.

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Liedtke M (2009b) Google, Microsoft now mutual friends of Twitter. Associated Press http://www.thestar.com/news/sciencetech/technology/twitter/article/714187–google-microsoft-now-mutual-friends-of-twitter. Accessed 23 April 2010

Lyons K, Playford C, Messinger PR, Niu RH, Stroulia E (2009) Business Models in Emerging Online Services. In: Nelson ML, Shaw MJ, Strader TJ (eds) Value Creation in E-Business Management, 15th Americas Conference on Information Systems, AMCIS 2009, SIGeBIZ track, San Francisco, California, August 2009, Selected Papers, pp 44-55

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Titel: A tale of two pricing systems for services
verfasst von: Kelly Lyons
Paul R. Messinger
Run H. Niu
Eleni Stroulia
Publikationsdatum: 01.03.2012
Verlag: Springer-Verlag
Erschienen in: Information Systems and e-Business Management / Ausgabe 1/2012
Print ISSN: 1617-9846
Elektronische ISSN: 1617-9854
DOI: https://doi.org/10.1007/s10257-010-0151-3

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