Strategic Interaction Among Content Providers in Sponsored Content Markets

Strategic Interaction Among Content Providers in Sponsored Content Markets

Hamid Garmani, Driss Ait Omar, Mohamed El Amrani, Mohamed Baslam, Mostafa Jourhmane
DOI: 10.4018/978-1-7998-3355-0.ch007
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The data-sponsored scheme allows the content provider to cover parts of the network subscription fees for end-users. As sponsored data gains traction in the industry, it is important to understand its implications. This work considers content providers (CP) choice of how much content to sponsor and the implications for end-users and CPs. In particular, the authors model the interactions of CPs as a non-cooperative game in terms of pricing, the credibility of content, and the amount of sponsored content. Additionally, they have proved through a detailed analysis of the existence and uniqueness of the Nash equilibrium. Based on the game properties, they implement a learning scheme using best-response dynamics that allows CPs to learn their strategies in a fast, accurate, yet completely distributed fashion. Extensive simulations provide attractive insights on how the sponsoring content may increase the CPs payoff.
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Currently, we are witnessing the explosive growth of global mobile data traffic, which reached 2.5 exabytes per month in 2014 and is predicted to exceed 24.3 exabytes per month by 2020. Furthermore, the total quantity of mobile devices worldwide will be 75 billion, while being more and more intelligent. According to Cisco, mobile video traffic will contribute to nearly 75% of the total mobile traffic. Therefore, one of the important challenges for content providers is how to attract more mobile users to access their content, and thus achieve a higher revenue gain. For this reason, a new promising scheme has been introduced “sponsored content”. The key idea of data sponsoring is to allow the CPs to subsidize the ISP access fees, and thereby the end-users can access contents from the CP through the internet service provider (ISP) for free. In 2014, AT&T launched a data sponsored plan, where the CP (e.g., Youtube, Twitter) can pay the access price of end-users to their content through ISP. Examples in the USA are Netflix or Binge-On with T-Mobile, DIRECTV and U-verse Data Free TV with AT&T, etc. ISPs are even offering services such that CPs can if they wish, apply sponsored data: examples are Verizon Wireless, AT&T Mobility and T-Mobile US, or Orange with DataMI in France, among others.

With the sponsored content Schema, the CP cooperates with the ISP, and the former will pay the latter based on the content traffic requested by end-users. Correspondingly, the end-users will be partially charged or they can consume the content for free. The sponsored content scheme creates a positive impact on the ISP, CP, and end-users, i.e., a multi-win situation. In other words, the end-users want to access more content that will not be calculated into their data caps. The CP can encourage more end-users to have a higher demand for content. Accordingly, the higher demand contributes to the more payoff of the CP and ISP. For this reason, the academia and the industry has a remarkable interest to investigate the sponsored content scheme.

In this chapter, we introduce the integration of the sponsored content schemes. In particular, we investigate the effects of their interaction and their coexistence on the end-user behavior, the CPs. The main contributions of this chapter:

  • We present new models that include one important feature, the CP's revenue models with a sponsored content shema.

  • We formulate the interactions among CPs as a non-cooperative game as a function of tree market parameters pricing, number of sponsored content, and the credibility of content.

  • End-users’ behavior is modeled as a function of CP strategies (i.e., pricing, number of sponsored content, and the credibility of content).

  • We formally prove the existence and the uniqueness of the Nash equilibrium of the non-cooperative game among CPs, which means that there exists a stable state where all CP do not have an incentive to change their strategies. So, our model ensures the existence of an equilibrium for keeping the economy stable and achieving economic growth. We propose an iterative algorithm to achieve the Nash equilibrium.

  • We conduct thorough numeric investigation to determine the effect of sponsored content on the strategies of CPs. In addition, the convergence of the proposed algorithm to the Nash equilibrium point is explored. We believe, based on results, that the proposed economic model is general and feasible, and this is applicable to modeling the competition among CPs content market with a sponsored content plan.

The rest of this chapter is organized as follows. Section 2 discusses related work. In Section 3, we describe the system model. We prove the existence and uniqueness of a Nash equilibrium point in Section 4. Then, we present a numerical investigation in Section 5. In Section 6 conclusions and future.


Game theory has been applied to a wide range of networking problems to study the interaction of players seeking to maximize their profit (Ait Omar et al. 2017) (Amrani et al. 2018a) (Amrani et al. 2018b).

The authors (Omar et al. 2019a) study models that involve CPs, CDN providers and end-users. The authors formulate interactions among CPs and and among CDN as a non-cooperative game.

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