I’ve been looking at the different trends in digital media and have started developing a common theory in terms of the issues relating to music, TV, phone service, weblogs, and software and the impact the Internet has on all those business models. From there, I came to a conclusion that what the Internet does well is break apart what were once aggregated products in its smaller components, wreaking havoc with the economic models established around the bundling concept. In this entry, I analyze how the concept of modularity is impact business and how they can react.
A module is the smallest logical unit of a product. Modules can generally be bundled in larger groups to create a new product. For example, if you look at the music business, a song would be a module and an album would be a group of modules.
A module is small and therefore is always the enemy of big. Because it is small, it moves fast. Because it is small, it sometimes needs to associate with other modules to create something big. Because it is small, it is inexpensive and because it is inexpensive, it resists bundling.
The modular by design approach is a concept I would like to introduce which can be quoted as such:
A modular by design issue is one where a problem, industry, group, can be broken down into increasingly modular parts, revolutionizing the business models on which the aggregation of those small parts was based.
In one word, everyone. When push comes to shove, the majority of today’s business models are based on some kind of aggregation. When services and products are packaged together, that’s an aggregated model; when your TV station offers a number of shows, that’s an aggregated model; when a company bundles hardware and software, that’s an aggregated model. Aggregated models can be seen everywhere; they are the enemy of modular design. And because modular designs are small and fast, they act as David did against Goliath, taking him down when people didn’t think that was possible.
In the next few days, I will examine the impact of the modular by design approach on music, digital downloads, broadcast television, cable television, telephony, news-gathering and software, highlighting how this approach has impact that is applicable to all of those. I hope you will join me for this journey and feel free to comment.
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