Network effects
A network effect is defined as the effect one node (or user) has on the value of the network as a whole. Below are the different models of network, and the value of one extra user.
Broadcast networks
This network can only send out information one-way. The value is equal to the number of nodes that each transmitter can catch, TV for example.
In this network content is king, and companies want the attention of as many people as possible (attention economy).
Metcalfe network
Every node in this network is connected to others bi-directionally (two way) in a single channel. The value is proportional to the number of nodes squared, Uber or telephones for example.
In this network, transactions are the most important (not content), and the number of members is key.
Reed networks (peer to peer)
A network where sub-groups can form and communicate simultaneously, a many to many relationship. The value is proportional exponentially to the number of nodes. In this network, groups create and consume their own content, Facebook or Reddit for example.
The ability to find other users is key in this network, as well as group communication.