Online to offline (O2O) platforms have risen in the digital era and have produced great impacts on local service providers. How online and offline attributes of local service firms influence the outcome of establishing proprietary platforms is understudied. The paper takes 528 cinemas in Nanjing from June 2017 to September 2017 as a sample. Based on network effects and the red queen theory, this paper focuses on the moderating effect of competition intensity and the demand-side usage of O2O platforms on the relationship between the choice of proprietary platforms and cinemas’ performance. The findings show that competition intensity has a significantly positive moderating effect, while the demand-side usage of O2O platforms has a significantly negative moderating effect. Implications of the findings are discussed.