Innovative Business Models in the Media Industry

Annales Universitatis Apulensis Series Oeconomica, Vol. 12, No. 2, 2010

6 Pages Posted: 21 Jan 2011

See all articles by Vladimir I. Soloviev

Vladimir I. Soloviev

Institute for Humanities and Information Technology

Pavel A. Kurochkin

The State University of Management

Anton V. Rendiuk

Institute for Humanities and Information Technology

Anton V. Zazuk

Institute for Humanities and Information Technology

Date Written: December 1, 2010

Abstract

In the modern media industry, in addition to the traditional business model of proprietary products selling, there are a number of new business models that involve free distribution of whole products, or some parts of the products. The advantage of the open business model is in the value creation by a large community of developers, whereas the proprietary business model means a simpler form of value capture. However, open and closed business models can not exist in pure form: the proprietary model does not give enough space for innovation, while the open model gives insufficient opportunities for generating profit. An investigation of the problem of optimal business model choice at the monopolistic market indicates that the fully closed business model is less efficient than the model with the closed core and open extensions; it is profitable for any firm to open all of those ideas and technologies that can not be used without the base module; the completely open business model is optimal if and only if a substantial part of the consumer value is determined by additional services or innovative activity of the users.

Keywords: Business Models, Innovation, Vertical Differentiation, Horizontal Integration, Proprietary

JEL Classification: O31, L17

Suggested Citation

Soloviev, Vladimir I. and Kurochkin, Pavel A. and Rendiuk, Anton V. and Zazuk, Anton V., Innovative Business Models in the Media Industry (December 1, 2010). Annales Universitatis Apulensis Series Oeconomica, Vol. 12, No. 2, 2010. Available at SSRN: https://ssrn.com/abstract=1744144

Vladimir I. Soloviev (Contact Author)

Institute for Humanities and Information Technology ( email )

53 Verkhnyaya Pervomayskaya
Moscow, 105264
Russia

HOME PAGE: http://visoloviev.ru

Pavel A. Kurochkin

The State University of Management ( email )

99, Ruzyanski Prospect
Moscow, 123060
Russia

Anton V. Rendiuk

Institute for Humanities and Information Technology ( email )

53 Verkhnyaya Pervomayskaya
Moscow, 105264
Russia

Anton V. Zazuk

Institute for Humanities and Information Technology ( email )

53 Verkhnyaya Pervomayskaya
Moscow, 105264
Russia

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