Optimal pricing in stochastic scalable video coding multicasting system

Heterogeneous multimedia content delivery over wireless networks is an important yet challenging issue. A promising solution is combining multicasting and scalable video coding (SVC) techniques via cross-layer design which has been shown to be effectively solution in the literature. Nevertheless, most existing works on SVC multicasting system focus on the static scenarios. In addition, the economic value of SVC multicasting system has seldom been explored. In this work, we study a subscription-based SVC multicasting system with stochastic user arrival and heterogeneous user preferences. A stochastic framework based on Multi-dimensional Markov Decision Process (M-MDP) is proposed to study the negative network externality existing in the proposed system. A game-theoretic analysis is conducted to understand the rational demands from heterogeneous users the subscription economic model. We show that the optimal pricing strategy which maximizes the expected revenue of the service provider can be derived through dynamic iterative updating techniques. Moreover, the overall user´s valuation on the system is maximized under such an optimal pricing strategy. Finally, the solution efficiency is evaluated through simulations.