Network Economies
by Samuel Smith
1. Demand Side Economies of Scale
1.1. When you have a monopolistic hold due to high demand
1.2. The simultaneous existance of Demand and Supply side Econmies of scale is unique to new information tech companies.
2. Network Externalities
2.1. postive when one particapant positively affects others, negative when opposite. Both happening without compensation being paid
2.2. Makes it almost impossible for small business to thrive
3. Collective Switching Costs
3.1. user switching costs
3.2. supplier switching costs
4. Network Strategies
4.1. Open Migration
4.2. Controlled Migration
5. Economics of Networks
5.1. Similar to Economies of Scale instead relies on Size of Network/s
5.2. The more subscribers, viewers, listens, streams the more successfull
6. Positive Feedback
6.1. amplifies: stronger get stronger and vice versa
6.2. creates S shaped curve for newly launched tech; once positive feedback kicks in, sales take off
7. Supply Side Economies of Scale
7.1. Larger firms = Lower Unit Costs
7.2. For physical goods, natural limits will eventually cause negative feedback
