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Contribution Details
Type | Bachelor's Thesis |
Scope | Discipline-based scholarship |
Title | Development of a Blockchain-Driven System for Optimizing Usage-Based Pricing Models in the Video Streaming Industry |
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Institution | University of Zurich |
Faculty | Faculty of Business, Economics and Informatics |
Date | 2022 |
Abstract Text | Streaming providers’ subscription models lack ingenuity, and against the background of new players emerging constantly, they impose inconveniences on customers. As such, they are looking for new ways to access their content. Following a modified design science research methodology, we first conduct interviews with consumers to concretize their problems, which can be abstracted to subscription fatigue and limited freedom of consumption. Although not broadly researched in the context of experience goods, such as streamed media, usage-based pricing models present themselves as promising solution to these problems, with prior research showing that they can benefit both sides. However, current implementations of such models suffer inefficiencies due to their post-paid nature, leading to secondary problems. They can be generalized to transaction costs on both sides of the trade. By proposing a pay-per-minute system, as a subset of usage-based pricing models, with timely appropriate cash flows, transaction costs can be reduced. Nevertheless, implementing this through conventional payment systems is hardly possible due to the dependency on costly intermediaries. Moreover, these intermediaries can define certain transaction limits, thus further impairing design flexibility. Leveraging blockchain technology and smart contracts is a possible solution to overcome said issues. After abstracting design requirements from defined solution objectives, a fully functional artifact is developed. A subsequent technical and user-centric evaluation suggests that the artifact is perceived as exciting and beneficial, further stressing the need for innovation. While the prototype generally supports the solutions to the problems and successfully implements the design requirements, the implications of using blockchain are manifold. High volatility of gas fees and arguably non-sufficient network externalities remain as challenges for feasibly realizing high-frequency transaction schemes, ultimately diminishing the artifact’s universal applicability. |
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