Abstract: Currently, the revenue of most App Stores consists of user-value based revenue and App-promotion based revenue. App promotion can bring the platform promotion fee and increase the user-value based revenue because more users will consume the App. Considering these two different sources of income, we develop a App store as the platform which promotes two same Apps. We discuss the App market structure under different parameters, the promotion pricing strategy of App Stores, and the promotion strategy of Apps. The study shows that the market structure depends on the utility of Apps and the cost of platform promotion. When the market is completely covered, the promotion price only depends on the promotion cost, and the Apps under competition will fall into the “prisoner's dilemma”. When the market is not covered, the promotion price is in negative correlation to the user-value for platform and in positive correlation to the user-value for Apps; compared to the covered market, promotion price of the uncovered market is low, or even lower than the cost in order to encourage Apps to promote. The platform is willing to sacrifice promotion revenue in exchange for more user value revenue.Abstract: Currently, the revenue of most App Stores consists of user-value based revenue and App-promotion based revenue. App promotion can bring the platform promotion fee and increase the user-value based revenue because more users will consume the App. Considering these two different sources of income, we develop a App store as the platform which promotes...Show More
