Economic Markets for Video Streaming Services: A Case Study of Netflix and Popcorn Time

Video streaming services are considered as the new standard method of delivering entertainment to the public. Netflix, one of the leading providers of video streaming, has reported that piracy continues to be their biggest competitor, referring to Popcorn Time specifically. Popcorn Time uses illegal means of providing video streaming. Popcorn Time offers a similar or even better video streaming experience compared to Netflix. In this paper, we study the competition between legal and illegal video streaming services. In particular, this paper elaborates on the analysis of network effects in relation to video streaming services and explains how an individual who uses video streaming can affect the overall value of the network where a particular video is being streamed. We propose the Competitive Video Streaming Model (CVSM), based on the Bass Diffusion model. The CVSM is applied to model the competition between Netflix and Popcorn Time. The main findings show that the timing of the onset of network effects is significant for the temporal evolution of adopters. Our results also suggest that the competitiveness of video streaming services depends on how the service provider is distributing the video streaming contents. It shows that distributing video streaming contents through P2P network subsidizes the growth of adopters to a greater extent compared to a client-server network. As such, the results of this study support the hypothesis that network effects can strengthen the competitiveness of illegal video streaming services

Quality of service differentiation, teletraffic analysis and network layer packet redundancy in optical packet switched networks

Optical Packet Switching (OPS) has emerged as a promising candidate for the next-generation Wavelength Division Multiplexed (WDM) based alloptical network. By enabling packet switching in the optical domain, OPS networks can provide cost-efficient and transparent transport services to higher layers. However, a commercial deployment of OPS requires not only a maturation of several key enabling technologies, but also a thorough investigation of a number of networking challenges related to OPS, since OPS networks are fundamentally different from today’s store-and-forward networks. This thesis addresses the latter issue by considering the following three OPS networking issues: · Quality of Service (QoS) differentiation at the WDM layer, with focus on packet loss rate (PLR) and delay-jitter differentiation. · Teletraffic analysis of OPS networks. · How to combat packet loss in OPS networks by using network layer packet redundancy. First, a crucial issue in OPS networks is packet loss at the network layer due to contention. Contention occurs when a packet is destined for a wavelength currently occupied by another packet. Several approaches to combat such packet loss have been proposed in recent literature, e.g. by utilizing wavelength conversion, buffering, deflection routing or traffic shaping. This thesis considers a novel approach to combat packet loss in OPS: The proposed Network Layer Packet Redundancy Scheme (NLPRS) allows redundancy packets to be injected into the OPS network, thus enabling reconstruction of lost data packets at the OPS egress node. Results show that the NLPRS is able to reduce the end-to-end data PLR several orders of magnitude in an asynchronous OPS ring network with and without wavelength conversion. Another crucial issue in OPS networks is QoS differentiation at the WDM layer. Due to the lack of optical random access memory, existing QoS differentiation schemes suitable for today’s WDM point-to-point architecture are not feasible to use in OPS networks. Hence, new schemes that utilize the WDM layer to provide QoS differentiation are needed. A preemption based QoS differentiation scheme, the Preemptive Drop Policy (PDP), has been proposed for asynchronous bufferless OPS. With the PDP, high priority arrivals are allowed to preempt and take over a busy wavelength currently occupied by a low priority packet in the case of contention. This results in a lower PLR for high priority traffic compared to low priority traffic. The PDP has been extended into the Adaptive PDP (APDP), which provides absolute guarantees to the PLR for high priority ivtraffic in OPS by using a measurement based preemption probability parameter adjustment. An access-restriction based QoS differentiation scheme, the Wavelength Allocation algorithm (WA), has been studied. In the WA, which provides QoS differentiation in asynchronous bufferless OPS networks with full range output wavelength converters, a certain number of wavelengths at an output fibre are exclusively reserved for high priority traffic. When QoS differentiation (with respect to the PLR) is introduced in asynchronous OPS, it has been shown that the average throughput decreases, often referred to as the throughput penalty of introducing QoS differentiation. The main cause for this throughput penalty is because network resources must be used in a non-optimal manner when employing QoS differentiation schemes that utilize the WDM layer to isolate the service classes. However, as shown in this thesis, the throughput penalty is only found in asynchronous OPS. For slotted OPS, the average throughput stays the same after the introduction of QoS differentiation. An evaluation framework suitable for quantifying the throughput penalty when introducing QoS differentiation has been proposed. Using this framework, three fundamental different QoS differentiation schemes for asynchronous OPS, including the PDP and the WA, have been evaluated. It has been shown that preemptive techniques result in the lowest throughput penalty, followed by access-restriction and dropping based techniques. This is because, when using preemption, packets are dropped only when the output port is congested. With access-restriction, packets are dropped when the output port is highly strained, and with statistically packet dropping, packets are dropped independently of the state of the output port. A QoS differentiation scheme for slotted OPS has been proposed and evaluated. The scheme isolates the service classes by ensuring that a certain number of high priority packets can be transmitted at an output port in a time-slot in the case of contention. Using the proposed scheme does not result in a reduced throughput when the service classes are isolated. QoS differentiation schemes for asynchronous OPS with a share pernode (SPN) contention resolution pool architecture consisting of Tunable Wavelength Converters (TWCs) and Fibre Delay Lines (FDLs) have been proposed. In particular, it has been shown that the PLR and delay-jitter may be independently differentiated in this switch architecture. Analytical models of some of the proposed QoS differentiation schemes have been derived, providing explicit results of the PLR. In addition, an analytical framework regarding packet arrivals to an output port in an optical packet switch has been derived for both asynchronous and slotted OPS. This framework is particularly useful for studying the effects of nonuniform traffic. Furthermore, it has been shown that both the Erlang and Engset traffic models are suitable to model packet arrivals to an output port in an asynchronous optical packet switch. Regarding the Engset traffic model, it has been shown how the blocking probability can be evaluated vusing either the Engset lost calls cleared (LCC) traffic model or the Engset overflow (OFL) traffic model. For all Engset based traffic models, the time-, call- and traffic congestion have been derived. A numerical evaluation of the presented traffic models reveals that there is a small, but non-negligible, deviation between the observed blocking probabilities, which depends on the number of input/output fibres and the system load

Multisided Platforms: Classification and Analysis

The multisided platform (MSP) is an essential business construct in the digital economy. Some of the largest companies in the world—including Google, Amazon, and eBay—exploit the MSP in their business models. Fundamental insights into the MSP are crucial to understand the business operations of the digital economy and how new innovative digital services are adopted in the market. The MSP ecosystem is complex and dynamic, and involves heterogeneous stakeholders with different business motivations. This paper classifies the various types of MSPs, distinguished by the network effect between user groups. Moreover, this paper shows how the original diffusion model of Frank Bass can be extended to analyze the temporal evolution of multisided platforms. Analytical models using coupled sets of ordinary differential equations are developed for several examples of two-sided platforms. For some of these examples, analytical solutions are found

Performance modelling of optical packet switched networks with the Engset traffic model

Stochastic processes have been widely employed in order to assess the network layer performance of Optical Packet Switched (OPS) networks. In this paper we consider how the Engset traffic model may be applied to evaluate the blocking probability in asynchronous bufferless OPS networks. We present two types of the Engset traffic model, i.e. the Engset lost calls cleared traffic model and the Engset overflow traffic model. For both traffic models, the time-, call-, and traffic congestion are derived. A numerical study shows that the observed blocking probability is dependent on the choice of traffic model and performance metric

Network layer packet redundancy in optical packet switched networks

A crucial issue in optical packet switched (OPS) networks is packet losses at the network layer caused by contentions. This paper presents the network layer packet redundancy scheme (NLPRS), which is a novel approach to reduce the end-to-end data packet loss rate in OPS networks. By introducing redundancy packets in the OPS network, the NLPRS enables a possible reconstruction of data packets that are lost due to contentions. An analytical model of the NLPRS based on reduced load Erlang fix-point analysis is presented. Simulations of an OPS ring network show that the NLPRS is in particular efficient in small networks operating at low system loads. Results also show how the arrival process, packet length distribution, network size and redundancy packet scheduling mechanism influence the NLPRS performance

Effects of bursty traffic in service differentiated Optical Packet Switched networks

Service differentiation is a crucial issue in the next-generation Optical Packet Switched networks. In this paper we examine how bursty traffic influences the performance of a service differentiated Optical Packet Switched network. By using time-continuous Markov chains, we derive explicit results for the packet loss rates in the case of a bursty hyper-exponential arrival process. Results indicate that the performance is degraded as the burstiness of the arrival process increases