Classroom Companion: Business

 
Chapter 19 · Digital Business Models

---

303
19
(c) The major technological difference between Popcorn Time and Netflix is 
that the former is based on a peer-to-peer architecture, while the latter is 
based on a server-client architecture. On Popcorn Time, content is streamed 
from a network of users (BitTorrent technology). On Netflix, content is 
Key partners
Key activities
Key resources 
Value proposition
Cost structure
Customer segments
Revenue streams 
Users
Popcorn time
website
Customer relationships
Channels
Online video
streaming
(Popcorn time)
Digital
media
. Fig. 19.15 Popcorn Time modeled using the BMC
Key partners
Key activities
Key resources 
Value proposition
Cost structure
Customer segments
Revenue streams 
Subscription
fee
Content
production
Digital
media
Copyright
owners
Customer relationships
Channels
Online video
Streaming
(Netflix)
Netflix
website and
app
Users
. Fig. 19.16 Netflix modeled using the BMC
19.5 · Conclusions

---

304
19
streamed from a server owned by Netflix. This results in strong network 
effects between users of Popcorn Time and non-existing network effects 
between users of Netflix.
3. Data for Spotify December 2020 retrieved from Spotify’s homepage, Statista, 
and Wikipedia:
(a) 155 million premium users.
(b) Major costs are licenses to the music industry.
(c) No—losses were 186 million euros in 2019.
(d) The three biggest competitors are Apple Music, Amazon Music, and 
TenCent.
(e) The market share was 32%.
(f) The major challenge is how to become profitable.
4. Wikipedia article about Wikipedia:
(a) Wikipedia believes that ads are annoying and distracting for the users, will 
influence the neutrality and threaten the credibility of the content, and 
may generate conflicts of interest between stakeholders that lead to cen-
sorship of the content.
(b) Currently, Wikipedia cannot use the subscription-based business model. 
This is because Wikipedia uses the GNU Free Documentation License.
References
Anderson, C. (2009). Free: The future of a radical Price. Hyperion.
Christensen, C. (1997). The innovator’s dilemma: When new technologies cause great firms to fail. 
Harvard Business Scholl Press.
Facebook value drops by $37bn amid privacy backlash. BBC News. March 19, 2018.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game 
changers, and challengers. Wiley.
Ovens. (2015, January). What is a business model? Harvard Business Review.
Further Reading
Anderson, C. (2009). Free: The past and future of a radical Price. Hyperion.
Granstrand, O. (2016). Industrial innovation economics and intellectual property. Svenska Kulturkompaniet.
Osterwalder, A. (2010). Business model generation. Wiley.