Welcome to the Vandelay Industries Wikidot - Assignment 2 Outline

With reference to a major Internet business, address the question, ‘What is the fundamental economic basis of Internet commerce?' with your team.


What is the fundamental economic basis of internet commerce? - provide an overview
Introduction to the chosen business: Apple, with a particular focus on iTunes, and why this business was chosen.

The History of Apple and its Products

Include a brief history of Apple
Overview of Apple's products:

  • computers (Mac - MacBook, iMac, Mac Pro)
  • mobile media (iPod, TV)
  • smart phone and tablets (iPhone, iPad)
  • software (iOS, iCloud, apps, Siri)
  • leading nicely into iTunes - music, TV, movies, books, podcasts, ringtones, radio, Ping and apps

Internet Business Basics

Online Business Models - using Apple as an example expain the various business models for sales and their product use online and off. (WP111_Apple_Business_Model_April_2012.pdf, Williams, Baggini)
Take a closer look at iTunes, and specific iTunes business models.

The Long Tail
(Anderson, McDermott)

Network Economy: It's All About Networking

What is the Network Economy and how has Apple/iTunes recognised the value of networks and the steps it has taken to network its business.
SERVICE becomes the premium in the network economy. TIME is the new scarcity. ‘Mind Share’ leads to ‘Market Share’ (Kelly)
Large networks are stronger than smaller networks. Increasing returns (to scale) - normally winner-takes-all. Larger consumer base will always win. Idea to eliminate competition.
Instant scalability - Instant methods of production to meet instant market demand. I.e software replicability. Does not lead to winner-take-all - consumers may find difference in monetary value according to informational value. (Liebowitz)
Trade routes - networks, markets (Steel)

Attention Economy: Getting Eyeballs

Explanation of attention economics showing how bringing attention to information is as important as the provision of the information and how iTunes and the music industry has successfully done this.
“Uncertainty is increasingly central to all aspects of economic and social life”. (Flew)
Learning economy: derived from Knowledge economy which implies a ‘fixed knowledge”, Learning economy is an ongoing flux of learning to adapt and always create anew.

Knowledge Economy

The sharing of knowledge and information to produce economic benefits
(Flew) Internationalisation of production, trade, and finance, with the rise of multinational corporations, reductions in cross-border tariffs on the flows of goods and services, the deregulation of financial markets and the rise of Internet-based electronic commerce. “Knowledge economy is one where ideas and intangible assets rather than tangible physical assets are increasingly the central sources of new wealth creation, where ‘the economy is more strongly and more directly rooted in the production, distribution and use of knowledge than ever before” p. 196
Networking patterns to accelerate diffusion of knowledge

Success, Challenges and the Future

  • Apple's statistics and success.
  • Possible competition (or perception of competitors) - media alternatives (library/shopping centre example - Gauntlett, 2004. Note to find better example), copyright and piracy.
  • The future for Apple - The future for iTunes.


Summary of the site content
About the team

(potential) References

Anderson, C. (2009). The Long Tail. Wired, 12(10). October. Retrieved from: http://www.wired.com/wired/archive/12.10/tail.html
Baggini, Julian. How Steve Jobs changed capitalism
Flew, T. (2008). The Global Knowledge Economy. In New Media: An Introduction (3rd ed., pp.193-217). New York: Oxford.
Gauntlett, D. (2004). Basic Web Economics: How things work in the 'attention economy'. newmediastudies.com. Retrieved from: http://www.newmediastudies.com/economic.htm
Kelly, K. (1997, September). New Rules for the New Economy: Twelve Dependable Principles for Thriving in a Turbulent World. Wired. Retrieved from: http://www.wired.com/wired/archive/5.09/newrules_pr.html.
Leibowitz, S.J. (2002). Basic economics of the internet from Re-Thinking the Network Economy: The True Forces that Drive the Digital Marketplace. New York: Amacom. (pp. 9 - 24).
McDermott, Irene. Because you purchased - Ecommerce, Recommendation Software, and the Long Tail. Retrieved from:
Steel, Carolyn. How food shapes our cities. Ted Talks. Retrieved from: http://www.ted.com/talks/carolyn_steel_how_food_shapes_our_cities.html
The New Economics of the Music Industry, Music News, Rolling Stone.pdf Retrieved from:
The Current Economy of iTunes. Retrieved from:
The MP3 as a cultural artifact. Retrieved from:
Williams, Paul. I came, I saw, I conquered -iTunes. Retrieved from:
WP111_Apple_Business_Model_April_2012.pdf. Retrieved from:

Team Report

Final team report (from journal)

Collaboration strategy and tools

  • the team initially started using Basecamp for: discussion, basic skills audit, to-do lists and document sharing
  • following this we arranged a live online chat via Wiggio, where we discussed using Basecamp, Wiggio, Wikidot and Wordpress. Generally, all of the team seemed happy to consider all suggestions but after negotiation decided the main point of communication would be Wiggio (for its broad range of collaboration tools), Wikidot (for the wiki-part of collaboration and because it is already being used for this Unit) and Wordpress for the final version of the assignment.
  • End goal: Project will be delivered via a free functioning website, hyperlinked and navigable (Wordpress) with a short video presentation.
  • Problems/challenges the team faced in building this project.
  • What has been learned.
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