Towards viable business models for media in the 21st century – The case of hypervideo

Hypervideo as an innovative concept for a multimodal illustration of knowledge marks a milestone in the evolution of the video medium. The term refers to the integration of video into a hypermedia structure. It combines the traditional benefits of video for illustrating movement and dynamic processes with a high level of interactivity. Users can freely explore the content by navigating through a nonlinear video structure. As a web-based entity the media technology harnesses the advanced possibilities for creation, distribution and consumption. With these attributes in line, we see many different fields of application with sizable demand for hypervideo in both the business and the end consumer market. In businesses, hypervideo can be used for employee training, from the intern to the manager level. In households, hypervideo grant laymen the possibility to actively engage with media content instead of been a passive observer in learning, entertainment and commercial scenarios. Although hypervideo involve a lot of conceptual and technological merits, building a business based on hypervideo requires viable business models. In this article we introduce a framework for generate business models that economically exploit the key characteristics of hypervideo and configure them in accordance to design choices. As a basis for our business model framework we looked into entrepreneurship literature to identify key components of successful media business models in the business-to-business and business-to-consumer sector. In an open interview about the viability of a hypervideo-centered business, executives with use cases for hypervideo contrasted the literature-based current state of research with insights from the field. In order to cover a wide range of industries, we spoke with representatives of the healthcare sector, the manufacturing industry and consulting. In each case, the stated goal of a discussion was to bundle hypervideo as a digitized product with enriching services. As a result of this of fits between demand and supply options for hypervideo, we present a communicatively validated framework for selecting the best fitting manifestations of business model components in regard to applications scenarios and characteristics of the central media type. Figure 1 depicts the concept of the framework that various stakeholders can use to either generate new or locate existing business models. As shown in the model, we use two dimensions to categorize different options that make up a concrete business model. The dimension “Business Model Component” consists of generally accepted options that entrepreneurs can choose from when founding a company. The second dimension “Application Scenario Characteristic / Technical Implementation” depicts different options for the application of hypervideo that influence the suitability of business model options. The application scenario characteristics and technical implementation are very much interdependent yet only by showing both we can explain the effect on business model options. The markings signify that a certain business model option is beneficial (+), disadvantageous (-) or neutral (o) for the economic well-being of the provider of hypervideo depending the concrete application scenario or the specific implementation options. Nevertheless, the business model options within the framework are not binding for a business. Over time, any business has to adapt to external and internal changes. Consequently, business model options can be temporally can lead to one another. The exemplary illustration below shows that choosing a freemium pricing model is broadly used to build large communities of private consumers. After reaching critical mass, a strategic shift towards periodical fees is a viable alternative. [Figure 1 - see Upload] The developed framework helps media mangers to get a better understanding of how technical specifications, application scenarios and business model components depend mutually on each other. This way the potentials of new media innovations can be better estimated and sustainable business models can be developed.