It’s interesting to see the rise Substack as an alternative to Medium. Many popular writers are shifting base. The benefits for writers are that they own their audience and don’t have Medium as a gate-keeper to how they reach their audience.

This is an example of a typical Business Model Innovation, just that it’s not really an innovation, as-in it’s not a new business model, but an application of a proven business model to a new area. The differences from a product stand-point for a writer are minimal, but how you reach your audience and potentially generate revenue from them is the difference.

Following two business models can be seen in each area –

• One subscription with lots of content from lots of creators using a Bundling to create value for end-user
• Pay-per-use – Provide a platform to creators and charge certain fees for usage.

Examples

Movies

• Netflix
• App Store, Play Store – Buy/Rent a movie when you need it
• Prime – doing a bit of both

Learning –

• Skillshare, Coursera, Lynda – Bundle courses
• Teachable, Udemy – buy as a you want

Blogging

• Medium
• Substack

Video

• Youtube Premium
• Vimeo

A typical dynamic in an area is to start with bundling and attract users to the platform. Over time though the bundle seems to become excessive, the price users have to pay (or the number of ads they have to see) for the bundle tends to go up with the increased content. Users start getting a feeling that they are paying too much for excessive content that they are not necessarily consuming. Top creators start feeling that they are not getting a fair-share. This creates room for a Pay-per-use platform, where top creators can post their content and move their fans to.

Curious to hear if you are able to think of examples in other areas where you have seen the same dynamics play out. Can you think of an area where you can use such business model innovation to start your venture?