A system perspective on revenue sharing in the mobile value chain: an evidence from China mobile video ecosystem

Abstract

Purpose Hyperconnectivity and supercooperation among partners within the mobile value chain are crucial factors for sustainable growth of the mobile ecosystem. This study aims to identify the complex structure of hyperconnectivity and supercooperation underlying revenue sharing practices and the actions and reactions of Chinese mobile video triads. Design/methodology/approach This study uses the causal loop diagram and system dynamics simulation to demonstrate the feedback causal structure wherein the revenue sharing (RS) rule adjustments trigger interactions among participants (e.g., MNOs, SPs and CPs) in mobile video service triads, leading to fluctuations in the number of mobile video users and total revenue in the mobile video value chain. Findings Change of RS rules among value chain participants is an incentive for achieving the sustainability of the mobile ecosystem, as examined using a system dynamics (SD) simulation. However, from the perspective of a tri-partite mobile value chain, the “accidental adversary” system archetype caused by adjustment of RS rules has an unintended negative impact on counterparts in the mobile ecosystem value chain. Originality/value This study analyzes a complex feedback causal structure based on structural interdependencies among growth, limiting and relaxing loops in the Chinese mobile video ecosystem. The result of SD simulation suggests strategic alternatives such as the “growth and underinvestment” systems archetype to overcome “limits to growth”. Moreover, this study explores the accidental adversary archetype in complex and complicated mobile service triads as an impediment to achieving sustainability of the mobile ecosystem.