Difference between Digital Products and Digital Platforms

The technology evolves on a frequent basis, products and industries in the market take on new parameters. Digital products and digital platforms are critical components. Users’ expectations rise with the advancement of digital products and platforms. This implies that service providers must follow the trend in order to produce the best products that will meet the needs of the customers. Which one is essential and where do they stand for company’s growth- Digital product or Digital platform?

A business model that attracts value by connecting two or more parties, typically producers and consumers, is represented by digital platforms. The end-user entity is the focus of digital product design in the form of content or services sold to individuals seeking to benefit from what the product offers.

This is the primary focus of the two business models:

Platform = Communication

Product = Manufacturing

A number of other distinctions distinguish digital products from digital platforms. Let’s dig deeper into a thorough examination.

Digital platforms


A digital platform is where activities involving the exchange of goods and services take place from a business standpoint. Producers and consumers facilitate platform activities. Aside from the two participants, the entire community is critical in ensuring that everything moves in the right direction. Most people nowadays are connected, which makes interaction on such platforms simple. There are various types of digital platforms, and a business can use any platform depending on its needs. These platforms include

Social media sites – Twitter, Facebook, LinkedIn and Instagram

Media sharing platforms – YouTube, Vimeo and Spotify

Service-based platforms – GrubHub, Airbnb and Uber

Knowledge-based platforms – Quora, Yahoo! Answers and StackOverflow.

Digital Products


A digital product is any product you sell or distribute online; a digital product is simply a service or entity consumed or used by an end-user. such as an ebook, mobile app, website theme, video game, and so on. This product focuses on adding value to the lives of its buyers or users by solving problems, raising awareness about an important topic, or expanding their knowledge.

Google search, Instagram app, Uber app, and Shopify themes are digital products.

Reasons why you should embrace Digital Products

  • You do not need to rent a location to sell your wares.
  • There are no materials or assembly costs.
  • You can never run out of stock, and you can never have too much. It’s always in balance!
  • In most cases, customers receive their purchases within a reasonable time.

Digital Product vs. Digital Platform

1. The Structure of Business Models

A digital product’s task is much easier. It does not have to be concerned with anything other than product development. A company only needs to plan how to provide content/service to its customers and advance the product in accordance with current technology.

The four essential functions for carrying out a transaction are as follows:

  • Increasing the size of your audience (provider and consumer)
  • Bringing together the right provider and the right consumer
  • Provision of essential services and features for an excellent user experience
  • Developing standards and terms and conditions to ensure authenticity
This reduces its role to three key functions:

A digital platform, on the other side, serves the primary purpose of ensuring perfect communication between the parties involved. Everything revolves around the smooth facilitation of transactions between actors to produce and exchange value.

The four essential functions for carrying out a transaction are as follows:

  • Increasing the size of your audience (provider and consumer)
  • Bringing together the right provider and the right consumer
  • Provision of essential services and features for an excellent user experience
  • Developing standards and terms and conditions to ensure authenticity

2. Circular and Linear Model 

For the platforms’ operations to be effective, they go beyond the linear model and adopt a circular model approach. You might be wondering what this means. In a nutshell, the company provides excellent service by facilitating communication between third-party businesses and product consumers. A perfect example is the one for YouTube, in which content creators from all over the world share information with platform users. This point demonstrates the importance of platforms and their role in digital businesses around the world.

To better understand how a platform works in relation to the linear model, you should know that the purpose of a linear model is to attract top-rated services by providing the best product, which is then sold to users. Toyota, which manufactures vehicles, is an excellent example of a linear model of operation. The vehicles manufactured are later sold directly to users. Another good example is a content production company like Netflix, which creates content for direct sale to end users. You may be wondering why a large corporation like Netflix, which is up to date on current technology and trends, cannot stand on its own. Simply put, it is not a business platform.

3. Direct Network Vs. Indirect Networks

Now the question arises what direct and indirect networks are. Suppose if you have a smartphone but a friend does not have one, there will be a communication barrier because the loop is incomplete. But if  both of you had smartphones, you would be able to communicate effectively because both parties have what it takes to keep the conversation moving. The network effect is now the additional benefit gained by a new user who joins the connected networks.

The network effect is classified into two types: indirect networks and direct networks. In terms of the product, it is part of a direct network. This implies that as business values rise, so does the number of users. A good example is Netflix, whereby as the number of users increases, so does the brand of Netflix, and thus its value.

In terms of platforms, there are various types of digital platforms, such as two or more groups that provide services to one another. For example, in the Click Up software, more team members are free to use the network, which means that the business benefits all the team members and the Click Up platform.

4. The Functional Challenges

Digital products and digital platforms work in different ways. By providing a single product to a single end-user, digital products add value. The process is straightforward: the company provides a product, and the user consumes it, resulting in a single revenue stream. However, users are not permitted to resell the product because the individual or digital product development company who created it retains ownership.

Netflix is a well-known example. Customers can access content streaming for a monthly subscription fee. Users can buy, watch, and enjoy the content, but they cannot resell it because Netflix retains ownership.

A digital platform that concentrates on multiple sources of revenue. It is a transaction in which both creators and consumers are involved. A digital platform also operates on a demand and supply model, where the consumer has a need and the creator fills it. The platform is not owned by either the creator or the consumers.

YouTube is a great example of how digital platforms work. A transaction is taking place here that involves both content creators and content consumers. The number of views benefits content creators, while watching the content benefits consumers. None of them own the platform; they’re in a mutually beneficial transaction.

5. The economical condition of service or product

The distribution and production costs are relatively low in this case. This implies that expenses are kept to a minimum, increasing revenue. In YouTube, where the content creator only needs to increase the number of subscribers in order to upload new content. This appears to be reasonable. The distinction is that platforms are widely recognised as being of high value, whereas products are not. The main reason for this is that products require more human and financial resources in order to increase sales and attract more customers.

When uploading new content to the website, content producers, like Netflix, will have to spend more money on services such as production, marketing, creating, and launching, among others. When the content attracts customers, more profits are made, and this attracts more and more customer.


You now understand what digital platforms and digital products are. The question is, how do they relate? You’ll need Vispan Solutions to market, advertise, and sell your digital products. That is how digital products and digital platforms rely on one another.