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Assume now that people talk about the movies they watch and therefore the willingness to pay for a particular movie is a function not only of the movie characteristics, such as quality and price, but also of the people's awareness. Also, recall that the cable company providing the VoD service must acquire the content from the content providers and can probably negotiate with them how much to pay every time a movie is watched over VoD.
a) Discuss how, as a manager of the telco that provides VoD service, you would promote new movies in this VoD platform and why. Are there any network externalities in this market that as a manager you need to account for? If so, which and what would you need to do about them?
b) Also, are there any aspects of 2-sided markets in this case that you would like to account for? If so, which ones and how would you, as a manager of the VoD platform, use them in your favor? What can you say about the dynamics of demand in this industry?
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