Business Model Analyses for Internet Celebrity-based Online Platform in Taiwan

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Business model analyses for internet celebrity-based online platform in Taiwan.

Abstract

With the development of the internet and technology, several online platforms have appeared and results many emerging business mode, especially the appearance of the internet celebrity create enormous economy value, which called internet celebrity economy. Due to the attraction of the internet celebrity economy, mare and more internet celebrity-based online platforms have emerged and results intense competition in business market. This study takes internet celebrity-based online platforms as the theme, and the research scope mainly focus on the online platforms in Taiwan. Through well-known business model canvas to analyse a paid subscription online platform, which is internet celebrity-based online platform. The research found that the main source of the paid subscription online platform relies on subscription numbers. This indicates maintain the current subscribers and find out potential subscribers is critical to achieve long-term stable revenue. The research found that there are three elements can achieve long-term stable revenue, which are trust building and exclusive interaction mechanism creation and project content should be long-term professional value transference. The research suggests that both creators and the paid subscription online platform should focus on business activities that relate to trust building in order to maintain subscribers and achieve stable income.

  1. Introduction

The advent of the internet and digital technology not only innovate the old business mode but also create new business mode. With the development of digital community and live broadcast technologies, the internet celebrities have appeared. Internet celebrities refer to those who have become famous through building their reputation on the internet, especially those who have many fans, follower and subscribers. Some of the internet celebrities are able to convert their fans and followers into consumers and increase the source of the income. This has been regarded as a new economic phenomenon, which is internet celebrity economy. According to the E-commerce Internet Celebrity Big Data Report (2016), the internet celebrities have generated around 58 billion in China, which has received unprecedented attention in recent years. This new trend of internet celebrities not only causing a sensation in the Chinese market, but also expend to Taiwan online market. It has been considered that 2016 is a boomed year for internet celebrities in Taiwan.

The current business mode of internet celebrities can be divided into six types, which are e-commerce, live broadcast, advertising, e-sport endorsement, film and television performance, and brand image, especially, the e-commerce and live broadcasts are the main source of revenue, which accounted for 85% of the total industry revenue. For example, there are many large live broadcasts platforms are able to attract around 4 million online users during the peak time, which presents the potential considerable economic value. According the estimate by analysts, the live broadcast market may grow from the current 15 billion to 60 billion in 2020 (Business Week. Com, 2018). The decreasing effectiveness of the traditional marketing approach results companies to cooperate with the internet celebrities, attempting to improve their advertising effectiveness, which also presents the potential value of the internet celebrity economy. As the internet celebrity economy continue growing, there even appearing some online platforms that are based on the internet celebrities. However, due to the life cycle of internet celebrity is often short, the loyalty of online fans usually not stable, therefore, some argument and questions have been proposed, which regarding to whether the mode of internet celebrity economy can be operated for long time and how to integrate or cooperate with other industries in order to form a more stable business model remain as a question.

The business model is relatively new concept in academic research, and has received attention from different areas, such as e-business, entrepreneurship, innovation, strategy and information systems management (Amit & Zott, 2001; Hedman & Kalling, 2003; Pateli & Giaglis, 2004; Teece, 2010; Zott & Amit, 2013).  However, although the literatures have put great effort on developing an understanding of business models (Zott et al., 2011), the research and practice still lacking homogeneity, clarity and direction (Ghezzi, 2013; Johnson, Christensen, & Kagermann, 2008; Wirtz, Pistoia, Ullrich, & Göttel, 2016), which means that there is a doubt of its usefulness for empirical research and theory building (Zott, Amit and Massa, 2011). Previous researches mainly focus on the theory building and rare connect to actual operation. Hence, in order to validate and enrich understanding the business model definitions and frameworks, the need of empirical test on business model framework and elements are proposed. Additionally, although the importance of relationships and consistency between each elements and components have been recognized, only through the literature is hard to address this topic. Therefore, this research attempt to apply a business model framework to practice, aiming to increasing foundational understanding of the actual operation of organisation and fill the research gaps.

The objective of this research is to understand the business model of internet celebrity-based online platform in order to propose possible strategy for both manager and internet celebrity as reference for future operation and management. To achieve the research objective, the research aims to find out, 1) the main business model components of internet celebrity-based online platform, 2) the main source of income and profit of the internet celebrity-based online platform, 3) the key elements in success internet celebrity-based online platform. The concept of the business model is regarded as focal point for organisation to innovation (Lambert & Davidson, 2013). Hence, through apply the business model framework to a real organisation, we are able to better understand the components of its business model and discuss the relationship between components, which help us to find out the main source of income and profit in the organisation. Therefore, this research will apply a business model framework to investigate the business model of internet celebrity-based online platform, attempting the address the research question.

The methodology of this research is qualitative research, which provides depth insight and phenomenon of the organisation. Previous research on the business model normally through interview, research through collecting secondary data is not widespread practice. Due to not able to access to the company, this research only can obtain secondary data, which mainly draw from company websites, reliable business news, business magazines that have high reputation and the business report with the interview data.

This paper starts with the literature review relate to the business model, attempting to understand the origin, definition, principle and framework of the business model in order to have relevant reference for analysing and find the suitable business model framework that can be applied. Followed by describing and explaining the methodology. Thereafter, apply the business model framework to internet celebrity-based online platform to discussion and analyse, finding out the core value of the internet celebrity-based online platform and developing the possible strategy. Finally, making the conclusion and propose the limitation of this research.

  1. Literature review

In the changing business environment, such as the appearance of new technologies, transformation of consumer performance, and new trends of social community, a firm’s success in competition is built on its business model. Success on products or services innovation no longer guarantee success in the market. Business model innovation is not just about introducing new technologies, it refers to integrate innovation, which means that a company has to continue monitoring the changing of business environment and design an adequate business model in order to achieve success in the competition. According to Strekalova (2009): “The fate of the company’s business depends on the proper selection and implementation of business models”, which highlights the importance of the business model. The following sub-sections will discuss the literature of business model, find out the research gaps and propose research question to fill these gaps.

  1.          Business model
    1.   The history of business model

The noun of business model appeared in 1996, however, academic research on business model concept emerged and has become prevalent since mid-1990s. In term of business model, it has been related to numerous variation, such as new business model, e-business, and internet business model, which presents that there is a need to have a clear idea what it means. Some scholars propose that the emergence of the business model and extensive use the concept is driven by the advent of the internet (Amit & Zott, 2001), the rapid growth of emerging markets (Prahalad & Hart, 2002; Seelos & Mair, 2007; Thompson & MacMillan, 2010) and the dependence of post-industrial technologies (Perkmann & Spicer, 2010). The origin of research on business model can contribute to entrepreneur attempt to design a business model as a tool for strategic and innovative management, which normally be used in e-commerce, start-up companies and high technology firms. Since the studies on business model appeared relatively recently, scholars propose that the academic research on business model lags behind practice, which means that business models is relatively new areas on academic and need to be developed. The basic content of business model is a created process that through widely applying business models to analyse and improve a company’s activities (Gorevaya and Khayrullina, 2015). In this content, the business model is viewed as a tool that allows firms to form the changing concept, to determine correct direction of change and facilitate their implementation.

  1.   Business model definition

Defining the concept of the business model could be the first stage of research, however, although there are plenty researches and studies of the business model, scholars do not agree on what a business model is. The definition of the business model remains debatable (Pateli & Giaglis, 2004) and there do not have a general accepted definition yet (Morris et al., 2005; Shafer et al., 2005; Zott et al., 2011). Table 1 provides the definition of the business model from scholars. The following discussion will explore these definitions and find out the similarities and differences in order to increase the understand of the business model concept.

The business model has been defined in different perspectives based on the content and purpose of researches and studies. Each definition has different focus and involves more or less substances. Timmers has been regarded as the first person that propose the definition of the business model concept (Erwin, F., 2013), the business model is defined as an architecture of the business network that emphasizes the different roles of participators and the interactions and relationships of them (Timmers, 1998). In the same vein, some scholars (Weill & Vitale, 2001; Mahadevan, 2000; Tapscott, 2001; Hawkins, 2001; Amit & Zott, 2001; Johnson et al., 2008; Geoerge & Bock, 2011) also emphasize the structure perspective, which refers to the relationships among elements. They argue that there is a need for each elements and participators within a company to integrate and cooperate together and implement strategy in order to create more benefits and maintain the firm’s competitive advantage. Afuah & Tucci (2001) and Rappa (2001) propose that the business model is a method of generating revenue, that introduces the financial element into the definition. Chesbrough and Rosenbloom (2002) regard the business model as a device that mediate between technology development and economic value creation, which emphasize the importance of technologic innovation. Magretta (2002) propose that the business model as a story that explains how a company work. Strategy perspective is another common emphasis in business model concept, the difference is that some scholars regard the business model is just a part of strategy (Chesbrough & Rosenbloom, 2002), while other scholars propose that the business model is different from strategy. For example, Magretta (2002) explains that the business model is a system that combines business together, which do not involve performance and competition as strategy.

It seems that some definitions are more comprehensive, which combine the ideas of business network architecture and revenue generation (Rappa, 2001; Morris et al., 2005; Teece, 2010), however, some definitions are less inclusive and specifically differentiate their business model from other concepts or eliminate some elements. For example, Timmers (1998) proposes a marketing model that combines the business model and the marketing strategy. The appearance of marketing strategy involves the competitive advantage, positioning, mixed marketing and product-market strategy (Timmers, 1998), which address the viability of commerce. Amit and Zott (2001) differentiates the revenue model from the business model and regard it as a complementary concept of the business model.

Some definitions are influenced by the research context and purpose. For example, Chesbrough and Rosenbloom (2002) emphasize the innovation of technology and regard business model as mediator between technology development (refers to inputs) and economic value creation (refers to outputs). Amit and Zott (2001) focus on e-business value creation and consider the business model as a designed transaction of content, structure and governance. The business model also be applied to non-profit-oriented organization, such as socially-oriented and government organisations (Erwin, F., 2013). It is clear that the business models have been used for different purposes, such as different types of innovation, variant technology, profit and non-profit and so on, which might be one of the reason that there is no widely accepted agreement of the business model definition.

Indeed, some scholars go beyond to discuss the value creation and capture. Some definitions are associated with the value logic in term of value creation, value capture and value delivery (Chesbrough, 2006; Osterwalder & Pigneur, 2010; Teece, 2010; Johnson, 2010), for instance, Chesbrough (2006) proposes that the business model executes two important functions, which are value creation and value capture. Additionally, according to Ghaziani and Ventresca (2005), value creation is the most related topic that has been discussed in the business model concept and even the form of the meanings is different, the frames incarnate the same idea. Although most authors do not clarify what they mean with value, it seems that the most definitions are referred to customer value (Tapscott, 2001; Afuah, 2004; Osterwalder & Pigneur, 2010; Teece,2010).

Although scholars have different perspectives on the concept of the business model, the common of these definitions is exploring the approach of how a company makes money, through utilizing internal resources and integrating external resources in order to deliver value to target market and customers, and then generating revenue. Therefore, it can be considered that the business model emphasizes a system level, which refer to the business value system of an organisation, explaining how a firm through developing their value chain to connect each activity inside the organisation and do business. However, due to scholars do not clarify what they mean with the value and the customer value, it would be hard to have a comprehensive definition of business model as lacking an adequate comprehension of value concept.

Definition of business model Author
  • An architecture of the product, service and information flows, including a description of the various business actors and their roles.
  • A description of the potential benefits for the various business actors.
  • A description of the sources of revenues.
Timmers (1998)
  • A unique blend of three streams that are critical to business. These include the value stream for the business partners and the buyers, the revenue stream, and the logistical stream.
Mahadevan (2000)
  • The method by which a firm builds and uses its resources to offer its customers better value than its competitors and make money doing so. It details how a firm makes money now and how it plans to do so in the long-term. The model is what enables a firm to have a sustainable competitive advantage, to perform better than its rivals in the long term.
Afuah & Tucci (2001)
  • A description of the roles and relationships among a firm’s consumers, customers, allies and suppliers that identifies the major flows of product, information, and money, and the major benefits to participants.
Weill & Vitale (2001)
  • The content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities.
Amit & Zott (2001)
  • The core architecture of a firm, specifically how it deploys all relevant resources (not just those within its corporate boundaries) to create differentiated value for customers.
Tapscott (2001)
  • A description of the commercial relationship between a business enterprise and the products and/or services it provides in the market.
Hawkins (2001)
  • The method of doing business by which a company can sustain itself, that is, generate revenue.
Rappa (2001)
  • A coherent framework that takes technological characteristics and potentials as inputs and converts them through customers and markets into economic outputs. The business model is thus conceived as a focusing device that mediates between technology development and economic value creation. It “spells out how a company makes money by specifying where it is positioned in the value chain”.
Chesbrough & Rosenbloom (2002)
  • Stories that explain how enterprises work. A good business model answers Peter Drucker’s age-old questions: Who is the customer? And what does the customer value? It also answers the fundamental questions every manager must ask: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost?
Magretta (2002)
  • A framework for making money. It is a set of activities which a firm performs, how it performs them and when it.
Afuah & Tucci (2003)
  • A concise representation of how an interrelated set of decision variables in the areas of venture strategy, architecture, and economics are addressed to create sustainable competitive advantage in defined markets.
Morris, Schindehutte & Allen. (2005)
  • A representation of a firm’s underlying core logic and strategic choices for creating and capturing value within a value network.
Shafer et al. (2005)
  • A business model performs two important functions: value creation and value capture. First, it defines a series of activities that will yield a new product or service in such a way that there is net value created throughout the various activities. Second, it captures value from a portion of those activities for the firm developing the model.
Chesbrough (2006)
  • Consist of four interlocking elements, that, taken together, create and deliver value”. These are customer value proposition, profit formula, key resources, and key processes.
Johnson, Christensen, & Kagermann (2008)
  • A system of interdependent activities that transcends the focal firm and spans its boundaries.
Zott & Amit (2008)
  • A template of how a firm conducts business, how it delivers value to stakeholders (e.g., the focal firms, customers, partners, etc.), and how it links factor and product markets.
Zott & Amit (2010)
  • A reflection of the firm’s realized strategy.
Casadesus-Masanell & Ricart (2010)
  • Defines how the enterprise creates and delivers value to customers, and then converts payments received to profits.
Teece (2010)
  • The rationale of how an organization creates, delivers, and captures value.
Osterwalder & Pigneur (2010)
  • The design of organizational structures to enact a commercial opportunity. Three dimensions to the organizational structures noted in our definition: resource structure, transactive structure, and value structure.
Geoerge and Bock (2011)

(Table 1: The definition of the business model. Resource from Author)

As there are variegated concepts and meanings of the business model, it is clear that there has not have a widely accepted definition of the business model yet. Therefore, it is important to have a generic and abstract conceptualization that is able to apply in different purposes and contexts. Hence, some scholars have proposed the different conceptualizations of the business model that can be classified into two streams, which are the archetypes of the business model (refers to the business model taxonomies) and the business model components. The following section will discuss these two streams.

  1.   Business model archetypes

Several researches have classified the business model and grouped them into specific categories based on different criteria. Table 2 presents the archetypes of the business model and the criteria that authors use to classify them. In general, the business model belonging to the same classification normally sharing the same characteristic, such as the same revenue source and the same business mode. Basically, an archetype is referred to a business model that based on a specific company. A well-known example might be the low-cost model of Southwest Airlines. The in-depth description of business model archetypes proposed by scholars often based on the well-known companies or innovative firms, which makes the concept of the business model more concrete and practical (Erwin, F., 2013).

Author (year) Business model classification Criteria
Timmers (1998) e-business model
  • Degree of innovation
  • Degree of functional integration
  • E-shop
  • E-procurement
  • E-auction
  • Third party marketplace
  • E-mall
  • Virtual communities
  • Value chain integrator
  • Information brokers
  • Value chain service provider
  • Collaboration platforms
  • Trust services
Tapscott et al. (2000) b-webs (business web)
  • Degree of economic control
  • Degree of value integration
  • Agora
  • Aggregation
  • Alliance
  • Value chain
  • Distributive network
Weill & Vitale (2001) Atomic business models
  • Strategic objectives and value proposition
  • Sources of revenue
  • Critical success factors
  • Core competencies
  • Content provider
  • Direct to customer
  • Intermediary
  • Shared infrastructure
  • Value net integrator
  • Virtual community
  • Whole-of-Enterprise/government
Rappa (2001) e-business model
  • Dominant revenue source
  • Brokerage model
  • Advertising model
  • Infomediary model
  • Merchant model
  • Manufacturer model
  • Affiliate model
  • Community model
  • Subscription model
  • Utility model

(Table 2: The business model archetypes. Resource: Author)

The advent of the internet and digital technologies reshaped the structure of an organisation in a way to create new exchange mechanisms and transaction architectures (Amit & Zott, 2001) and results the appearance of e-business model. This presents the need to adapt and understand the pure-play e-business model or traditional bricks-and-mortars model (Pateli & Giaglis, 2004; Afuah & Tucci, 2003). Therefore, there were several scholars attempt to understand and describe different e-business models, for example, Timmers (1998) distinguishes among eleven generic e-business models and classifies them according to the degree of functional integration (from single function to multiple functions) and the degree of innovation (from low to high). Tapscott et al., (2000) propose five types of business webs based on the degree of economic control (from hierarchical and self-organizing) and the degree of value integration (from low to high).

To simplify, the differentiation of business model taxonomy framework proposed in literature is determined by two factors, one is the criteria that propose to classify business models (Table 2), another is objective classified, which related to whether a business model archetypes can represent an entire business initiative or there might be a need to combine multiple business models (Timmers, 1998; Rappa, 2001), as atomic business models can be incorporated into e-business initiative (Weill & Vitale, 2001). However, although the business model archetypes provide insight of business model types with their relative positioning, the multiple sets of criteria mean that the common acceptable criteria for classifying business model has not been established and there do not have the integration and consolidation of different criteria and model types (Erwin, F., 2013). This indicates that there has not have an exhaustive and holistic business model taxonomy yet (Lambert, 2006; Pateli & Giaglis, 2004). Additionally, it seems that the business model taxonomy frameworks are define for internet-based business models, except for the business web that proposed by Tapscott et al. (2000), that can be employed both internet-based business models and electronic business models due to the network structure.

The classifications and archetypes can be use in business model design and management and is important for business model innovation as it can help to evaluate the novel business model (Erwin, F., 2013), for example, the atomic e-business models (Weill & Vitale, 2001) is regarded as building blocks that can apply for more complex compositions in business model design and innovation, but need to take the synergies and conflicts between each atomic e-business model into account (Erwin, F., 2013). According to Morris et al. (2005), the business model archetypes can help an organisation understands what kind of business it operates and ensure the decision it makes is internally consistent. However, in some cases, the business model archetypes are artificial classification that might only suitable for specific need (Lambert, 2006).

  1.   Business model components

Although the concept of business model remains fuzzy, some scholars have gone further to define what compositional elements involve in the business model. This might be concerned as the first step that making business models as a tool which assists entrepreneurs to understand and describe their firm’s business logic. The elements also refer to building blocks (Osterwalder & Pigneur, 2010), functions (Chesbrough & Rosenbloom, 2002), components (Pateli & Giaglis, 2004), and key questions (Morris et al., 2005). It has been considered that descriptions of business model components have different level of rigor and depth, and its range from simple enumerations to detailed descriptions (Osterwalder, 2004). The following discussion will describe and compare the business model in different framework that proposed by authors.

In order to present business model more systematic, several scholars have classified the compositional elements of business model into different segments, for example, Mahadevan (2000) propose that a business model is consisted by three streams, which are value stream, revenue stream and logistic stream. Table 3 presents the components of the business model framework in detail. The most widely used framework is the business model canvas (Osterwalder & Pigneur, 2010). The business model canvas focus on business model design and innovation, especially in the way of storytelling to achieve visual thinking (Erwin, F., 2013). In this business model framework, the elements are classified into four pillars, which are product (value proposition), customer interface (customer segments, customer relationships and channels), infrastructure management (key resources, key activities and key partners), and financial perspectives (revenue stream and cost structure). This framework is proposed by Osterwalder (2004) and synthesize most of the elements that involve in other business model framework.

Components Author
  • Value stream (the value proposition for the business partners and buyers)
  • Revenue stream (the plan for revenue generation)
  • Logistical stream (supply chain design)
Mahadevan (2000)
  • Mission (value proposition of product or services)
  • Structure (the role of agents, such as industry, customers and products)
  • Processes (the process of value creation)
  • Revenue
  • Legal issues
  • Technology
Alt & Zimmermann (2001)
Business model schematics Weill & Vitale (2001)
  • Participants (customers, suppliers and allies)
  • Relationship between participants
  • Flows associate with money, information, products and services
  • Revenues stream
Technology-market mediation Chesbrough & Rosenbloom (2002)
  • Value proposition
  • Market segment
  • Value chain (customers and suppliers)
  • Cost structure and profit potential
  • Value network (complementors and competitors)
  • Competitive strategy
Entrepreneur’s business model Morris et al. (2005)
  • Value proposition (How do we create value?)
  • Customer (Who do we create value for?)
  • Internal processes/competencies (What is our source of competence?)
  • External positioning (How do we competitively position ourselves?)
  • Economic model (How we make money?)
  • Personal/investor factors (What are our time, scope, and size ambitions?)
Four-Box business model Johnson, Christensen, & Kagermann (2008)
  • Customer value proposition (job-to-be-done and offering)
  • Profit formula (revenue model, cost structure and target unit margin)
  • Key resources
  • Key processes (process, business rules and success metrics, and behavioural norms)
Business model canvas Osterwalder et al. (2010)
  • Customer segments
  • Customer relationship
  • Channels (communication, distribution and sales)
  • Value propositions
  • Key resources
  • Key activities
  • Key partnership
  • Revenue streams
  • Cost structure

(Table 3: Business model components. Resource: Authors)

In terms of the four-box business model (Johnson et al., 2008), it is quite similar to the business model canvas. It emphasizes the interdependence of each box and highlights the importance of consistency and complementarily. Nevertheless, there do not have much discussion and support to these interdependencies. The main difference between the business model canvas and the four-box business model is that the four-box business model regards customer perspectives into value proposition box while the business model canvas regards customer aspects as a pillar. Additionally, the four-box business model involves more detail perspectives into its framework, such as business rules, behavioural norms and success metrics.

The elements involve in Chesbrough and Rosenbloom’s business model (2002) are similar to the business model canvas and the four-box business model. The main difference is that they view competitive strategy as an element in the business model, which do not involve in the business model canvas and the four-box business model. However, they do explain that competitive strategy does not cover whole strategy and the business model and strategy are different, as the business model relates to create value while the strategy relates to capture value. Morris et al. (2005) propose the business model in the perspective of entrepreneurship, which has been regarded as entrepreneur’s business model. In the same vein as Chesbrough and Rosenbloom, entrepreneur’s business model includes the competitive advantage as an element. In terms of differences, entrepreneur’s business model contains the personal factors which refers to the time, scope, and size ambitions of entrepreneur and is regarded as the investment model. This concerns more details about different venture types in regarding with income, growth and speculative models. Moreover, it highlights the importance of internal and external fit between elements. If internal fit (such as consistency and reinforcement between the components) is too strong, a company might not able to cope the turbulent environment and results poor external fit. This indicates the business model is dynamic rather static as the need to take changing business environment into consideration.

Weill and Vitale (2001) propose e-business model schematics, which is formed by the atomic e-business model (Table 2) and e-business initiatives. The elements of e-business initiatives are targeted customer segments, channels, IT infrastructure capability, and the combination of the atomic e-business model. It is notable that the e-business model schematics emphasizes the importance of information flow, electronic relationships and IT infrastructure, especially highlighting the network perspective of the organizational architecture in terms of relationships, flows and roles.  Unlike other business model components, Alt and Zimmermann (2001) propose six generic elements that is different from other authors’ components. The elements they introduce are mission, structure, processes, revenue, legal issues and technology. The main differences are that they take legal issues and technology into account. They propose that legal issues will influence all aspects of the business model, and technology can be enabler or constraint for IT-based business model, meanwhile, technologic change will impact the business model design.

Business model frameworks indicate what components form the business model. According to the framework discuss above, the elements of the business model are quite similar and can be used to represent how an organisation through network to create and capture value. Nevertheless, a business model framework should not only define what components involve in the business model, but also define the relationships between each element. According to Morris et al. (2006), a useful business model framework should capture and integrate key decision variables, which require the need of internally consistent combinations. Therefore, it should be recognised that the business model is not just the sum of its parts, it relates to the operation of business system (Morris et al., 2005). That is to say, the business model can be regarded as a system (Afuah & Tucci, 2001) with complex interdependencies between it elements (Johnson, 2010).

  1.   Summary

To sum up, business model archetypes and business model components are more concrete and empirical than business model definition, which indicates that business model archetypes and business model components do bring further advance for business model conceptualisation. Nevertheless, researches on classifications and archetypes remain fragmented and underdeveloped, still lacking a comprehensive system approach (Erwin, F., 2013). Moreover, although the importance of relationships and consistency between each elements and components have been recognized, only through the literature is hard to address this topic. Additionally, although the literatures have put great effort on developing an understanding of business models (Zott et al., 2011), the research and practice still lacking homogeneity, clarity and direction (Ghezzi, 2013; Johnson, Christensen, & Kagermann, 2008; Wirtz, Pistoia, Ullrich, & Göttel, 2016), which means that there is a doubt of its usefulness for empirical research and theory building (Zott, Amit and Massa, 2011). Hence, in order to validate and enrich understanding the business model definitions and frameworks, the need of empirical test on business model framework and elements are proposed. Therefore, this research will apply a business model framework to practice and attempt to find out the relationships between elements in order to fill these research gaps.

  1.          An example of business model framework – The business model canvas

The business model canvas (Osterwalder, 2010) is regarded as a tool that can be used in both business model design and business model innovation, and it will be applied in this study to analyse the business model of the case company. It is an important task for entrepreneurs or managers to understand how to design and adjust current business model or even create new business model. Therefore, as the business model is an important constituent of corporate strategy, incorporating the business model into the overall corporate strategy plan has become crucial for the business design and business model operation.

The business model canvas contains nine building blocks, which are value propositions, customer segments, channels, customer relationships, key resources, key activities, key partnerships, revenue streams and cost structure. The following discussion will elaborate these building blocks.

  1.   Value propositions

The value propositions refer to the unique benefits that a company offers to customers (Osterwalder et al., 2010). It presents how an organisation deals with the customer problem in terms of offering potential benefits, especially, the unique value or better satisfy customers that other firms cannot achieve. These values can be price, speed of service, convenience, or brand, even some value might can be created through innovating, such as a new offer.

The value proposition is the central dimension of the business model (Zott et al., 2011). It presents the way that a firm differentiates itself from its competitors, which is the reason why customers choose a certain company rather than others. The objective of the value propositions is to achieve sustainable competitive advantage and normally be related to two perspectives, value and price. In order to understand a firm’s value propositions, Kambil and Ginsberg et al. (1997) propose a value map to evaluate a firm’s relative position in an industry. The value map can help firms to rethink the direction they attempt to go in order to differentiate themselves from competitors based on the value frontier on the value map. This also be referred to the strategies, they argue that market leaders should create unique proposition in the value, either through low cost leadership or differentiation. Therefore, the value proposition is a company based on its consumer needs to provide solution.

  1.   Customer segments

Customer segments refer to the different groups of people or organisations that a corporation aims to reach and serve. In order to satisfy customers and provide what they need, a firm has to group customers into segments based on common behaviours and attributes. However, in some cases, an organisation might also need to decide which segments to target and which segments should be ignored (Osterwalder et al., 2010).  Therefore, firms have to understand that who are the most important customers and what value are they want in order to design suitable strategies to fit the specific customer needs.

  1.   Channels

Channels refers to the bridge that connects the value propositions and customer segments of an organisation. A firm has to select suitable distribution channels that allow it to deliver value to its customers (Osterwalder et al., 2010). While an organisation decides which channels to deliver value to customers, it has to consider the characteristic and behaviour of customers in order to ensure that the channel does fit the customer’ expectation, creating maximal consumer experience and corporate benefits.

  1.   Customer relationship

Osterwalder et al. (2010) propose that the customers are the main source of a firm’s profit, therefore, building a good relationship with customers can help the firm achieve sustainable development, especially in the condition of market saturation. While it is hard to obtain new customers, maintaining better customer relationship is relatively important. They also propose several approaches to build relationship between the firm and its customers, such as personal assistance, self-services, automated services or co-creation. An organisation can even choose multi-approaches to build up relationship with customer as the same time, as any approach that can maintain good relationship with customers the firm must take into consideration and implement. Besides, some researches also propose that attracting new customer is harder than maintaining current customer, and need to spend more cost (Kotler, 2001; Lamb, 2000).

  1.   Key resources

Key resources refer to assets that allow a company to create and offer a value proposition, deliver value to customers, manage customer relationship, and generate revenue (Osterwalder et al., 2010). That is to say, a firm might not able to present its value proposition without these resources. These assets can be both tangible (e.g., physical and financial resources) and intangible (e.g., intellectual and human resources) resources. Additionally, they can be owned by the firm or acquire from key partners.

  1.   Key activities

Key activities refer to the most important actions that a firm must operate successfully in order to maintain their business keep working. These key activities are categorized in to three areas, which are production (e.g., design, manufacture, distribution, and quality), problem solving (e.g., knowledge management and training), and network (platform management, service provisioning, and platform promotion) (Osterwalder et al., 2010). Based on the business model types, the different key activities are required, for example, problem solving might be the most important key activity for a consulting company while researching and developing on drugs are the key activities for biotech pharmaceutical company. Therefore, a company has to base on the several factors (such as value propositions, channels, consumer relationship or revenue stream) to design its key activities.

  1.   Key partnership

Key partnerships refer to the suppliers and partners that assist business model work, optimize business models, reduce risk, and develop capabilities. A firm’s key partnerships can be related to its key resources when the firm lacks necessary resources to develop, which means that is can cooperate with partners to acquire the resources. The partnerships are divided into four types, which are strategic alliances with non-competitors, coopetition with competitors, joint ventures to develop new business, and develop buyer and supplier relationship to build reliable suppliers (Osterwalder et al., 2010).  Chesbrough and Schwartz (2007) propose that cooperating with external companies and building up the relationship are important for frim to create new business modes, which allow the firm to obtain more benefits. Therefore, it can be considered that choosing suitable key partners and developing good relationship with partners can benefit firms’ business model operation and even developing new business modes.

  1.   Revenue streams

Revenue streams refer to the income a company obtains from its customer segment. There are two types of revenue streams, which are transaction revenue and recurring revenue.  Transaction revenue comes from one-time customer payments while recurring revenue resulting from ongoing payments either through value proposition delivering or post-purchase supporting (Osterwalder et al., 2010). Additionally, there are several approaches to generate revenue, such as asset sale, subscription fee, licensing and advertising, which indicate the source of revenue streams can be diversified.

  1.   Cost structure

Cost structure refers to all costs that incur to maintain business model operation. Utilizing resources, operating activities and delivering value all incur costs. The business model cost structure is classified into two broad classes, which are cost-driven and value-driven. For example, the business model of no-frills service providers is built on low cost structure, therefore, low cost structures are more important to some business models than to others (Osterwalder et al., 2010). In order to make a company has positive development, it is important to realise not only the source of the revenue but also the cost structure of the company. Truly understanding the cost of every key resources and key activities during the business model operation can help a firm to inspect and evaluate it business model, finding out if it can reduce its cost meanwhile maintaining its value proposition.

Key Partners Key Activities Value Proposition Customer Relationships Customer Segments
Key Resources Channels
Cost Structure Revenue Streams

(Figure 1: The business model canvas. Resource: Osterwalder et al., 2010)

  1. Methodology
    1.   Research method and analysis

This study began with idea generation through observation and literature study on the topic of business model. The first main section of this dissertation is literature review, which attempt to provide a comprehensive aspect of the research area and illustrate the relevant research that has been conducted. The literature review starts with discussing and summarizing older theories followed by identifying research gaps and leads to research objective generation. The literature review highlights the needs of empirical test and the relationships between the business model elements research, therefore, the study attempts to fill the research gaps through applying a framework of the business model to a case company. The objective of this research is to understand the business model of internet celebrity-based online platform in order to increase sales and profit and propose possible strategy for both manager and internet celebrity as reference for future operation and management. To achieve the research objective, the research aims to find out, 1) the main business model components of internet celebrity-based online platform, 2) the main source of income and profit of the internet celebrity-based online platform, 3) the key elements in success internet celebrity-based online platform.

The methodology of the research involves the range from research design to data collection. There are several issues have to be concerned, such as data collection, criteria to be used and evaluated and the process of data analysis. Normally, there are two methods in research methodology option, quantitative and qualitative. When the structure of theory is comprehensive and has actual data, which can be used to find out the relationship between variables, the quantitative method is more suitable. In contrast, while in the condition of those emerging issues that do not have adequate theoretical framework, no data can be analysed, the level of involvement is relatively wide, and causality cannot be clear defined, these present the need of exploratory research and qualitative method is more suitable. The methodology choice might be impacted by the previous research and study objective. In the research of business model, qualitative method is the main method. In order to satisfy the objective of this research, the qualitative method is more suitable. The advantage of the qualitative research is that it offers a completed description of the research subject, however, the main issue for qualitative research is not able to collect numerous data, which results the reliability of the research finding and not able to represent the opinion of numerous population.

There are several options in qualitative method, therefore, it needs some criteria to evaluate each method. The criteria that applied to evaluate methodology are natural fit to the objective, data quality and insight, implementation difficulty, time limited and natural skill. There are two options that natural fit with the research objective, interview and case study. Although having interview with the managers, network partners and customers of the case company can collect high quality data and have better insights of case company, the problem is that accessing the case company as an outsider is difficult and having interview with the people in different countries is hard (the case company is in Taiwan). Hence, the case study might be the option, although it might not able to obtain sufficient data, it allows research to take a more in-depth view of issue and less difficult to implement than interview. Due to the case company is in Taiwan, there is a need to translate the language as well.

To understand the business model of internet celebrity-based online platform, this research chooses PressPlay as a study of case company. PressPlay is worth for our analysis for several reasons. First, PressPlay is regarded as the first paid subscription platform for content creators in Asian and has attracted attention from business magazines and reports, therefore, the existence of a large number of publications of the case company enable the research to collect the extensive material needed for analysing. Second, according to Pauwels and Weiss (2008), there are some challenges that entrepreneurs face while attracting customers from free to fee online platform, as consumer’s reference price is zero for those products or services delivered through the internet. PressPlay is start-up paid online platform just appearing in recent years, since there are numbers of free alternatives exist, which indicates the difficulty to compete with competitors. However, the growing speed of PressPlay is relative quick, for example, its monthly subscription fee has achieved 6.85 million during a year and continue increasing. This presents that it is worth to analyse its business model and understand the understand it strategy. Third, since internet celebrity economy continues growing and is future trend, through analysing PressPlay can help the business participators to understand their business and enable to concern their business issues.

The research attempts to create a transparent picture of PressPlay business model through applying the business model canvas to the case company, which allows to find out the main source of income and profit of the internet celebrity-based online platform, after that, the research attempt to understand the key success elements in the internet celebrity-based online platform. Finally, the research will propose the possible strategies that can be applied to achieve success and increase revenue.

  1.   Data collection

The first step in the research process was to collect a comprehensive list of the publications regarding PressPlay and its business model. The goal was to find out articles and reports on PressPlay that had been published in Taiwan. This study searched for PressPlay-related reports by using the internet. During the search process, there did not find the book or academic journal that talk about PressPlay, therefore, the document collection main focus on media reports, which are company websites, reliable business news, business magazines that have high reputation and the business report with the interview data. According to Zhong and Newhagen (2009), newspaper journalists have to react quickly in order to ongoing processes, which can easily result in a high degree of homogeneity in their interpretations. Therefore, only maintaining one data, if the data that have been found are similar. In order to identify relevant documents, the content has to relate to the nine building blocks of the business model canvas or mention the element that is important to achieve increasing revenue. Through reading, and carefully examining, the 53 relevant publications have been identified, including 18 business news, 7 interview reports, 10 well-known business magazines, 12 business comment, and 6 business reports.

  1.   Data analysis

In organisation study, the concern with construct development and measurement sometime results us ignore more important work of concept development (Gioia, Corley and Hamilton, 2012), which brings criticism to qualitative research that whether it has adequate justification of its assertion, leading an issue of whether qualitative researchers are able to provide enough evident to theory development rather than explaining a phenomenon based on their interesting. In order to address this problem, this research will apply grounded theory to form the data structure. This approach provides the foundation for qualitative data analysis and rigorous collection, that is useful for determining the foci of sampling and content after collecting data. Additionally, this method allows the research through comparing and examining the key events and discuss the idea of informants to form the clear themes and aggregate dimensions (Gioia et al, 1994).

The analysis began with applying the business model canvas to the case company in order to analyse. After that, in term of the key success elements, starting with identifying the initial concepts in the data and grouping them into categories. Through using simple descriptive phrase to form first order codes, and then searching the relationship between and among these categories, which is axial coding. Through axial coding can facilitate categories to assemble into higher-order themes, which refers to second order themes. Finally, through gathering similar themes into several main dimensions that present the content of value proposition in the business model canvas. These analytic procedure is not liner, instead, it is recursive process-oriented, which can help us clearly grasp the emerging content and bring them into framework.

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