While digital distribution of media is well entrenched, sellers are still trying to determine the most profitable model for releasing content. Is it most effective to make an entire series available all at once — inducing audiences to binge that content — or one chapter or episode at a time?

The answer is a hybrid, according to the new paper “An Empirical Investigation of a Digital Platform’s Release Strategy for Serialized Content.”

The paper, which studied a Chinese online book platform, concludes that the optimal strategy is for the seller to drop 60 per cent of a book’s chapters simultaneously and then the remaining chapters at a rate of one per day. Getting readers to keep returning to the platform for new chapters exposes them to other titles the platform is promoting and raises the likelihood they will start a new book while waiting for the next chapter of their current one.

“People need to read a threshold number of chapters to get hooked on a book,” says professor of marketing Nitin Mehta, one of the paper’s three authors. “With 60 per cent, we find there’s a high probability they’ll get hooked. Then, as the seller, if I continue releasing chapters slowly, they will come back to the platform. So I get them both bingeing and exploring the platform. Now if I flip it, it’s a lose-lose situation. If the first chapters are released slowly, they will lose interest early on, and then simultaneous release of later chapters won’t matter because they are already gone.”

The paper is based on the first chapter of the doctoral dissertation of Clarice Zhao, who was Mehta’s PhD student in quantitative marketing, and is now an assistant professor of marketing at the Desautels Faculty of Management at McGill University.

As part of the agreement to make its data available, the book platform is not named in the paper, although it enjoys 70 per cent market share in the romance genre. Its current model is to release book chapters sequentially using pay-per-chapter pricing.

The research concludes that if an entire book is released (the binge approach), the platform would experience a 14 per cent decrease in revenues due to a reduction in website visits. But if it used a strategy of releasing two chapters per day of all its books, it would experience a 13 per cent increase in platform revenue.

Better still, if the platform adopted the hybrid model, it would see a 29 per cent bump in revenue with an increase in both binge consumption and the effect of additional platform visits.

Zhao, who grew up in China, knew of the platform, which she approached with a short research proposal. She then studied the behaviours of 610 randomly selected consumers of romance books over six months in 2017, noting how often they visited the platform and the purchases they made during those visits.

The average book had 170.7 chapters of about two pages each, and the platform on average released 6.4 chapters of a book weekly. This approach to book consumption might seem foreign to North American readers – who download entire books to their Kindle and Kobo e-readers — but, as Mehta notes, “it is huge in East Asia.” 

It does have precedent in English-speaking countries, with well-known examples in the U.K. in the 19th century, when Charles Dickens released his novels in serialized form and Arthur Conan Doyle serialized his Sherlock Holmes stories in The Strand Magazine. The idea in both cases was to boost the number of purchases and allow publishers to sell more ads around the content.    

Of course, when writing in serialized form, authors would be tempted to end chapters with cliffhangers to encourage readers to return. And a more compelling and better-written story is more likely to maintain readership, though Zhao did not take these matters into consideration for this paper.

Release strategies represent a key issue in the music and streaming television businesses as well. In the former, record companies have traditionally preceded album drops with the release of individual cuts (aka singles), which not only build anticipation for an album’s release, but also allow sellers to benefit from sales or streams of both formats.   

Meanwhile, binge-watching has long been a selling point of streamers such as Netflix, which pioneered a new release strategy by dropping an entire season of its original shows such as House of Cards. But those services have begun adopting the hybrid approach. The paper points to the Prime Video series The Boys, which dropped all eight episodes of season one simultaneously, but then for seasons two and three released the first three episodes together and subsequent episodes weekly.

While Mehta acknowledges the benefits sequential and hybrid models would give streamers, he believes that allowing viewers to binge can be particularly advantageous. 

“With binge-watching, people are able to consume more content on that platform over the course of a year,” he says. “If you are able to binge-watch a show, the probability of finishing it is much higher. We sit in front of the TV every day, and there’s already a high chance we’ll go to Netflix. It doesn’t have to release episodes one by one to attract us to the platform because it’s already a habit.”