Editing Business model (section)

== Categorization ==
From about 2012, some research and experimentation has theorized about a so-called "liquid business model".<ref>
{{cite web
| url            = http://riverpublishers.com/journal/journal_articles/RP_Journal_2245-456X_122.pdf
| title          = Global Business Model – a step into a liquid business model
| last1          = Pedersen
| first1         = Kristian Bonde
| last2          = Svarre
| first2         = Kristoffer Rose
| last3          = Slepniov
| first3         = Dmitrij
| last4          = Lindgren
| first4         = Peter
}}
</ref><ref>
{{cite web
| url            = http://www.wsws.org/articles/2012/feb2012/ibmc-f11.shtml
| title          = IBM launches new form of day-wage labour
| last1          = Henning
| first1         = Dietmar
| date           = 2012-02-11
| website        = World Socialist Web Site
| publisher      = International Committee of the Fourth International (ICFI)
| access-date    = 2015-02-24
| quote          = The "liquid" model now being pursued is not limited to IBM. [...] It is no accident that IBM is looking to Germany as the country to pilot this model. Since the Hartz welfare and labour "reforms" of the former Social Democratic Party-Green government (1998–2005), Germany is at the forefront in developing forms of precarious employment. [...] The IBM model globalises the so-called employment contract, increasingly replacing agency working as the preferred form of low-wage labour. Companies assign key tasks to subcontractors, paying only for each project.
}}
</ref>

=== Shift from pipes to platforms ===
[[Sangeet Paul Choudary]] distinguishes between two broad families of business models in an article in [[Wired (magazine)|''Wired'' magazine]].<ref>[[Sangeet Paul Choudary|Choudary, Sangeet Paul]] (2013). [https://www.wired.com/insights/2013/10/why-business-models-fail-pipes-vs-platforms/ "Why Business Models fail: Pipes vs. Platforms"]. ''[[Wired (magazine)|Wired]]''.</ref> Choudary contrasts pipes (linear business models) with platforms (networked business models). In the case of pipes, firms create goods and services, push them out and sell them to customers. Value is produced upstream and consumed downstream. There is a linear flow, much like water flowing through a pipe. Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value.

Alex Moazed, founder and CEO of [[Applico]], defines a platform as a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers, of a given value.<ref>[https://www.applicoinc.com/blog/what-is-a-platform-business-model/ "What is a Platform"] by Alex Moazed on May 1, 2016</ref> As a result of [[digital transformation]], it is the predominant business model of the 21st century.

In an op-ed on MarketWatch,<ref>[http://www.marketwatch.com/story/what-twitter-knows-that-blackberry-didnt-2013-10-10 "What Twitter knows that Blackberry didn't"], Choudary, Van Alstyne, Parker, ''[[MarketWatch]]''</ref> Choudary, [[Marshall Van Alstyne|Van Alstyne]] and [[Geoffrey G Parker|Parker]] further explain how business models are moving from pipes to platforms, leading to disruption of entire industries.

=== Platform ===
There are three elements to a successful platform business model.<ref>{{cite journal |url=http://blogs.hbr.org/cs/2013/01/three_elements_of_a_successful_platform.html |title=Three elements of a successful platform |date=January 31, 2013 |first=Sangeet Paul |last=Choudary |journal=[[Harvard Business Review]]}}</ref> The ''toolbox'' creates connection by making it easy for others to plug into the platform. This infrastructure enables interactions between participants. The ''magnet'' creates pull that attracts participants to the platform. For transaction platforms, both producers and consumers must be present to achieve critical mass. The ''matchmaker'' fosters the flow of value by making connections between [[Production (economics)|producer]]s and [[consumer]]s. Data is at the heart of successful matchmaking, and distinguishes platforms from other business models.

Chen (2009) stated that the business model has to take into account the capabilities of [[Web 2.0]], such as [[collective intelligence]], network effects, [[user-generated content]], and the possibility of self-improving systems. He suggested that the [[service industry]] such as the airline, traffic, transportation, hotel, restaurant, information and communications technology and online gaming industries will be able to benefit in adopting business models that take into account the characteristics of Web 2.0. He also emphasized that Business Model 2.0 has to take into account not just the technology effect of Web 2.0 but also the networking effect. He gave the example of the success story of [[Amazon.com|Amazon]] in making huge revenues each year by developing an open platform that supports a community of companies that re-use Amazon's on-demand commerce services.<ref>Chen, T. F. 2009. Building a platform of Business Model 2.0 to creating real business value with Web 2.0 for web information services industry. International Journal of Electronic Business Management 7 (3) 168–180.</ref>{{qn|date=February 2015}}

==== Impacts of platform business models ====
[[José van Dijck|Jose van Dijck]] (2013) identifies three main ways that media platforms choose to monetize, which mark a change from traditional business models.<ref>{{Cite book|title=The culture of connectivity : a critical history of social media|last=Dijck, José van.|date=2013|publisher=Oxford University Press|isbn=978-0-19-997079-7|location=Oxford|oclc=839305263}}</ref> One is the [[Subscription business model|subscription model]], in which platforms charge users a small monthly fee in exchange for services. She notes that the model was ill-suited for those "accustomed to free content and services", leading to a variant, the [[freemium]] model. A second method is via advertising. Arguing that traditional advertising is no longer appealing to people used to "user-generated content and social networking", she states that companies now turn to strategies of customization and personalization in [[targeted advertising]]. Eric K. Clemons (2009) asserts that consumers no longer trust most commercial messages;<ref>{{Cite journal|last=Clemons|first=Eric K.|date=2009|title=Business Models for Monetizing Internet Applications and Web Sites: Experience, Theory, and Predictions|journal=Journal of Management Information Systems|language=en|volume=26|issue=2|pages=15–41|doi=10.2753/MIS0742-1222260202|s2cid=33373266|issn=0742-1222}}</ref> Van Dijck argues platforms are able to circumvent the issue through personal recommendations from friends or [[influencers]] on social media platforms, which can serve as a more subtle form of advertisement. Finally, a third common business model is [[Data monetization|monetization of data]] and metadata generated from the use of platforms.