Innovative Business Models in the Media Industry

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