Business Models in The Digital Goods and Service Industries: Research of Digital Businesses and Associated Value Capturing Mechanisms
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School of Business |
Bachelor's thesis
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Authors
Date
2020
Department
Major/Subject
Mcode
Degree programme
(Mikkeli) Bachelor’s Program in International Business
Language
en
Pages
62 + 1
Series
Abstract
This thesis examines the digital goods and services industry from the point of view of the common business models companies utilize to capture value from their products. As digital products have become an everyday part of life for more and more people globally, the underlying value capturing mechanisms that support the industry are deserving of extensive examination. These business models are found to be able to be divided into four categories of free offering, freemium, premium, and platform business models. This categorization is reflected by digital products in prominent markets like Google Play Store and the Apple App Store. A Meta-analysis of academic research data in combination with current statistics seemingly implies that the market for digital products is transitioning into further favoring initially free products over so-called premium business models with some differences between hedonic and non-hedonic digital products. A market largely devoid of initial monetary costs to consumers and which relies on non-monetary costs to consumers like advertisements as sources of revenues can have implications on both microeconomic and macroeconomic scale. On a small-scale, digital business models and their perceived trends influence the monetization and market entry to digital goods and services markets in general. On the broader scale, digital business models may even go as far as influencing the overall accuracy of GDP calculations by creating welfare not necessarily captured by traditional price indexes.Description
Thesis advisor
Zieba, MartaKeywords
digital markets, monetization, mobile applications, business model, freemium, premium, digitalisaatio, digital goods