To economists, a platform is a business that connects groups Argentina Email address of people, often through a system of websites and apps: Airbnb, Etsy, eBay, Facebook. But its “most general meaning,” as my Columbia colleague David Rogers points out in The Digital Transformation Playbook, “is ‘something on which you can build.’” And you don’t have to be a digital mega-corporation to build it. As Geoffrey Parker of Dartmouth, Marshall Van Alstyne of Boston University, and Sangeeta Paul Choudhary put it in their book Platform Revolution: “If the firm can use either information or community to add value to what it sells, then there is potential for creating a viable platform.”
Platform business models have been central to the digital disruption of the past 20 years, and they’re just as important to the power shifts currently transforming the global entertainment and media industries.
Ever since content started turning digital
As I write this, seven of the world’s ten most highly valued public companies have platform business models, at least in part: Alibaba, Alphabet , Amazon, Apple, Facebook, Microsoft, and Tencent. Each of these seven corporations runs what are known as two-sided or multi-sided platforms, meaning they create a market that brings different types of people together. One-sided platforms, by contrast, connect customers with a product and its producers. There are several advantages to being in the platform business. Obviously, such companies don’t have to keep resources tied up in managing and maintaining inventory. Thanks to the power of network effects, the more users join a platform, the more valuable that platform becomes—and the more appealing to new users. Platform owners also get to collect the data that comes from having a direct relationship with customers—one of the
Economic theory would suggest that when content
The study’s authors examined gulf email list
a popular app marketplace that suffered a major hack in July 2014, when pirates pilfered files and released their own versions of the apps. The episode provided a unique opportunity to consider how the piracy influenced subsequent innovation decisions—namely, whether developers would continue to roll out new products and update their existing ones signaling a commitment to innovation or abandon them to the pirates. Combining several data sources, the authors identified each app listed on the marketplace, along with its release date, subsequent updates, price, product description, market category, developer, and download information. The cyberattack itself revealed the marketplace’s internal data, including how many times each file had been downloaded prior to the hack. The authors compared the decisions of the hacked developers to those made by several different control groups, including the developers of free apps in the app store, similar apps that were pirated prior to the cyberattack.
