Bundling of information goods: a value driver for new mobile TV services

Abstract

Information goods have several characteristics that make their pricing especially challenging. From the point of view of revenue management, bundling has many advantages that seem to match the challenges of pricing information goods. Because bundling is a value-based pricing strategy, segmentation has a significant role in supporting and increasing efficiency of bundling. In this context, we develop a conceptual model showing how many characteristics of information goods support or limit the selection of bundling as a pricing strategy. The conceptual model developed and the hypotheses stated are tested with conjoint analysis in the context of a new mobile TV service bundle. The mobile TV is a new innovation, and the service is expected to be launched in Finland in 2006. Totally 164 respondents gave answers to our internet survey. In this study, bundling increased the demand in all cases. However, consumers strongly preferred two-part pricing and flat access rates of new mobile TV services. Actually, our research findings give support to segmentation on the basis of bundling.