مقاله سال ۲۰۱۷

Digital goods differ from traditional ones in the characteristic of having a relatively high fixed cost but extremely low marginal one, meaning that the profits increase quickly as the sales volume rises (Turban et al., 2008). However, since digital goods are easy to copy and can be transmitted at low cost, this makes piracy easier and cheaper. Piracy is copying or utilizing a product without permission from the party who owns the copyright, and it often has unfavorable impacts on the wider society, even though consumers are obviously pleased to obtain the product for free (Johnson, 1985). Yang, Wang, and Mourali (2015) investigated two forms of music piracy in schools and colleges, unauthorized downloading and sharing, in order to prevent them, while Jacobs, Heuvelman, Tan, and Peters (2012) studied downloading behavior in the context of digital movie piracy. The findings showed that the influence of any knowledge of the related laws on the expected economic outcomes is negative. Various ways to prevent piracy are proposed in the literature (Khouja & Park, 2008; Khouja & Rajagopalan, 2009; Wu & Chen, 2008), and while most studies suggested that piracy has negative effects, some considered that it may actually increase demand and thus enhances profits (Conner & Rumelt, 1991). Hsu, Wang, and Wu (2013) indicated that the government should do whatever is in its power to protect intellectual property and punish piracy, as this will motivate firms to invest in innovation. Appleyard (2015) examined a number of practical cases to propose six lessons in developing effective anti-piracy strategies. The author concludes that these could guide managers to protect existing rights and engage with new market paradigms.

Digital goods sold by different channels have different values to consumers and retailers. Consumers may prefer the physical versions of products, as it gives more value through the experience of real possession, even though they have to wait to receive these, in contrast to digital copies, which can be delivered immediately. On the other hand, offering a physical version means retailers have to bear the production, inventory, and distribution costs, and though these can be easily cut by selling the virtual version on the Internet, such an arrangement may not be satisfactory for many consumers, who may enjoy the atmosphere of a real store. In sum, while these two channels may grow the entire market, they also create dilemmas for customers and retailers. Moreover, they bring more competition to the market (Jiang & Katsamakas, 2010; Kim, Chang, & Shocker, 2000). Competition may occur for each different channel if the product is sold in different forms, and the manufacturer would therefore postpone or stagger the selling periods for different channels or sell the product only in a single one. Such practices are common in the film industry, as movies often only have online versions sold after their DVD versions have been available for a while, while some are never offered online. However, in any case the demand is usually highest when a product first becomes available on the market, and generally decreases dramatically after this initial period. Therefore,digital goods are now often sold by both virtual and physical channels at the same time. Different approaches may be used to avoid competition in such cases; for example, selling products only by a single channel, offering different editions of the product and bundling (Koukova, Kannan, & Ratchford, 2008), or deferring the selling times for other channels to avoid competition between two similar and substitutable products (Thorsten, Henning, Sattler, Eggers, & Houston, 2007).

As digital channels have been introduced to the market, so competition has become more intense. The traditional channel often address this by adding value, while the digital channel may reduce the price by taking advantage of its low (or zero) marginal cost to attract more consumers. This may eventually result in a price war, and make the market unprofitable for each channel member. Members in the supply chain thus have to horizontally and vertically coordinate with each other to obtain the maximum profits. Supply chain coordination has been extensively studied (Bernstein & Federgruen, 2003; Cachon, 2004; Jeuland & Shugan, 1983; Pan, Lai, Leung, & Xiao, 2010), and the coordination mechanism adopted in this context may involve various different considerations, such as a wholesale price contract (Raman et al., 2005), rebate contract (Leng & Parlar, 2010; Pasternack, 2008), revenue sharing (Cachon & Lariviere, 2005; Giannoccaro & Pontrandolfo, 2004), and quantity discount (Rhee, van der Veen, Venugopal, & Nalla, 2010). Among these, revenue-sharing coordination has been widely applied in industries which have extremely low marginal costs, such as those that sell digital products on the Internet (Foros et al., 2009). Moreover, revenue-sharing coordination, which can prevent price wars, is widely applied in the DVD rental industry (Gerchak, Cho, & Ray, 2006). It is not uncommon in practice for retailers to share their sales revenues with suppliers. Hence, it may be important for suppliers and retailers to share the profits in the supply chain, especially when demand for digital goods is affected by piracy. Moreover, some inducements may be needed to encourage each channel member to behave according to the mutual agreement, even if there is a good gain-sharing mechanism. Extensive research on the pricing strategy under such competition has been carried out (Tang & Xing, 2001; Viswanathan, 2005; Yan, Wang, & Zhou, 2010; Cai, 2010; Kogan et al., 2013; Chang and Walter, 2015), indicating the importance of coordination for such a competitive multi-channel market. Therefore, this study demonstrates how a supplier and retailers can coordinate by the use of a contractual gain-sharing mechanism, and determine the equilibrium prices and the optimal gain-sharing ratio when a digital product is sold in a supply chain under the multi-channel competition with consideration of piracy.