Competition through exclusivity in digital content delivery

The recent growth of online media streaming has created lofty valuations for streaming providers and intensified competition among online providers and cable channels. We analyze two strategic initiatives that are potentially game-changing. The first initiative, dubbed windowing, is to create a "temporal exclusivity" by making titles available for streaming months or years ahead of current industry practice. The second initiative, also aims to grow the subscriber base, is to create/fund "content exclusivity" by producing original titles and series. We use a three-stage game to show how cable operator and streaming provider can set their subscription fees, how content owner can set the royalty fees for the cable operator, and how content owner can determine the timeframe and payment when creating an exclusive streaming window.