Almost everything a digital business does follows from one fact: who the customer is. There are four common ways of being paid, and each produces a different product.
Four ways of being paid, and who the customer turns out to be in each.
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| Model | Who pays | What it makes the product do |
|---|---|---|
| Sell it | The user, once | Be good at the job — nothing else earns |
| Subscribe | The user, monthly | Be good enough not to cancel |
| Advertising | An advertiser | Hold attention, which is not the same |
| Commission | Both sides of a trade | Keep both sides dependent on it |
Free is not free: When the service is free, the customer is somebody else and the user is what is being sold. That is not a slogan — it predicts which changes a platform will make and which it will not.
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A platform does not sell a product; it sits between people who want to trade and takes a share. That position is what makes platform businesses so profitable and so hard to compete with.
Real-world examples you can name
Platform work and employment status — UK Supreme Court ruling on Uber drivers February 2021; EU platform work directive adopted 2024
Work is allocated by an app rather than a manager. The UK Supreme Court held that Uber drivers are workers entitled to minimum wage and holiday pay, and the EU has since legislated a presumption of employment where a platform controls the work.
Who it affected: Couriers and drivers, and companies whose model assumed self-employment.
Australia's News Media Bargaining Code — passed February 2021
A law designed to make large platforms negotiate payment with news publishers for content that appears on their services. Facebook briefly blocked news for Australian users while it was being debated; the law passed in amended form and several deals followed.
Who it affected: News publishers, platform users, and regulators elsewhere who copied the model.
Short-term letting platforms and city housing — Barcelona fines from 2016; ban on tourist flats announced for 2028
Platforms let residential flats be rented to visitors nightly. Cities argue this removed homes from the long-term market and pushed rents up; Barcelona has fined platforms for unlicensed listings and announced it will end tourist flat licences entirely.
Who it affected: Residents priced out of central districts, hosts earning from spare rooms, and visitors.
Why it is hard to leave: Each side is there because the other side is. A competitor has to attract both at once, which is why the second-largest platform in a market is usually far smaller than the first.
How this is tested — naming the model turns a vague answer about a company into a specific one about incentives. It comes up two ways:
Paper 1 — structured question
- Part b: explain why a free service behaves as it does
- Part c: evaluate a platform's effect on the businesses using it
Paper 2 — source-based question
- Q2: explain a claim about how a company earns
- Q4: synthesise sources on platform power
The trap: “they want to make money”: Every business does. Which model they use decides what making money requires them to do, and that is the analysis.
Explain one reason why a free service may not be designed to serve its users well.
Model answer plan
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Analyse why platform businesses tend towards one dominant firm per market.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.