I believe the second structure is more prominent in corporate or large sized firms given the multiple no. Of departments that can have a product team…. 
 On preference, of course the first one seems better but the second one has its own perks too.

Product Manager

So I've been in orgs in which product team was independent, the CPO directly reported to CEO. CPO used to get alignment from other function leads, and on basis

So I've been in orgs in which product team was independent, the CPO directly reported to CEO. CPO used to get alignment from other function leads, and on basis of that product roadmap was decided. The business team could only influence the roadmap, they had no power to dictate it. 

In another org, we didn't have CPO arrangement, the product leads reported to business heads. Business head decided on what gets prioritized and shipped.

In the later case, product team ended up more like a bunch of program managers. 

What kind of structure are you part of? Do you've any preferences on kind of structure you like?

What kind of product team structure do you like?