Bit, atom, online, offline
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Created 232 days ago, Updated 134 days ago
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We can group business models based on the type of the goods and services that we use and the type of distribution channels. The first business model is selling digital contents online like Apples’ iTunes and many music downloads sites, which could be called bit-online. This is probably the most obvious segment in which the the mass niche can happen.
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The second model, bit-offline, is offline sales of information contents. Selling CDs of game software falls into this category. This model is likely to become limited to a niche while the bit-online mainstream. In the case of music industry, CD sales is declining fast. As we thought this would not be a dominant model for information goods, we did not deal with this segment.
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The third business model, atom-online, is to sell tangible goods and services online. This is the domain of the online shopping, which is growing fast. The distinction between online and offline is becoming unclear as most offline uses some online. We are just using ‘reasonable’ distinction.
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Not all products in this atom-online will grow. Books and CDs that are sold online, though in the short term may grow, is likely to decline. The bit nature of the products does not need physical packaging. Except for rare cases like when the size of a file is too big, online delivery of the bits is far more efficient.
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The forth is the atom-offline. This is the most traditional form of commerce. You go to a shop and buy a car, a TV, or a pair of shoes. We were very curious about whether the mass niche could happen here. This is the landmark of the old economy where the scale rules! If mass niche could happen here, that would imply that the mass niche could be ubiquitous.
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We will discuss whether and where the mass niche exists in the above segments, except in the bit-offline. Let’s start from the most obvious and widely covered segment, the bit-online.
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