Ecosystem Bottlenecks and Value Dynamics in the Lifecycle of the Online Video Ecosystem

Ecosystem bottlenecks limit or provide opportunities for actors to create and capture value. Although extant research has highlighted the importance of interfirm relationships in facilitating ecosystem and firm growth, it mainly focuses on a single bottleneck type and does not differentiate the impacts of bottleneck-level strategic actions with diverse ecosystem actors. Our research draws on the theory of constraints and the ecosystem perspective to classify bottleneck types and examine how actors’ bottleneck-level strategic actions impact performance in the context of the online video ecosystem lifecycle (2007-2019). We theorize that during the nascent stage, when focal actors conduct technical bottleneck alliances with suppliers and/or competitors or demand bottleneck alliances with complementors, deal performance will be positive. We further theorize that during the growth stage, when focal actors conduct technical bottleneck acquisitions of complementors or demand bottleneck acquisitions of suppliers and/or competitors, deal performance will be positive. We employ multi-methods (content analysis, surveys, and multivariate analysis) with hand-collected and proprietary data. We find considerable support that our 3-way interaction hypotheses explain firm heterogeneity in deal performance. We contribute to bottleneck and ecosystem research by including both positive and negative effects of bottlenecks and illustrating how actors’ partner/target type choices influence investor reactions.