Building or launched a web site/application? Check out the choices below on how to generate money from your hard work. Note that these are not mutually exclusive: consider mixed hybrid models too.
|I||Immediate Revenue||Models for generating regular income, cash-flow (‘Self-Sufficient’ models)|
|I.S||Subscription||Charge the end-user a regular, recurring fee. Consider:
|I.S.F||Fixed||A single, fixed subscription cost (e.g. to access an online magazine or a specific service).|
|I.S.V||Variable||A number of fixed-price subscriptions are available to the end-user; fee dictates feature/usage limitations, etc. This includes the ‘Freemium’ model; a (usually limited) ‘free’ option alongside one or more paid options.|
|I.T||Third-Party Supported||The end-user receives the service for free; a third-party pays the fee for a returned service.|
|I.T.A||Advertising||One or more third-parties place clearly defined adverts within the website/application. Variations of adverts include graphical banners, text, inline, pop-over, interstitial, etc. Normally charged by cost per click, cost per action, or cost per thousand impressions.|
|I.T.S||Sponsorship||One or more third parties become the ‘official’ sponsor(s) of the website. This could include fixed (non-rotating, typically prominent) adverts, integration of third-party branding (colours, slogans) and/or licensing agreements.|
|I.T.C||Paid Content||Advertorials: third-parties pay to include marketing-led content on the website.|
|I.T.P||Paid Placement||Third-parties pay to be included in lists or in the application (e.g. comparisons, reviews, entertainment listings).|
|I.T.R||Referrer||End-users are directed to third-party sites, which pay a fee to the website owner for any referred transactions (e.g. comparison sites).|
|I.T.L||License Content||Third-Parties are given access to re-use the content from the web-site for their own purposes.|
|I.P||Payments||The end-user makes individual, ad-hoc transactional purchases.|
|I.P.U||Pay-per-use||Micropayments: the end-user is charged a fee to use an online service (one-off, or for a limited time). This includes the ‘brokerage’ model, where user(s) are charged a fixed-price or percentage per transaction (e.g. ebay). This also includes the purchase of ‘credits’ e.g. 10 uses of the service for a fixed cost. Discounts can be offered for bulk purchases.|
|I.P.P||Physical Products||The typical e-commerce model; includes books, CDs, holidays, tickets, etc. Typically each ‘physical product’ has a non-arbitrary cost associated with its production.|
|I.P.V||Virtual Products||The end-user purchases a ‘digital’ product that typically has a negligible cost of replication. This includes virtual gifts (e.g. Facebook), in-game items (e.g. World of Warcraft), and other virtual assets (e.g. land in Second Life).|
|I.P.R||Related Products||The end-user has free access to the main product/service. An additional, optional charge is made for related ‘added value’ products/services, e.g. documentation, support, commercial versions, related iPhone or Android application, etc.|
|I.P.D||Donations||The website relies on voluntary end-user donations (e.g. a ‘Tip Jar’).|
|L||Long-Term Revenue||Strategic, ‘Invest and Reward’ models where costs are incurred initially for a longer-term ‘pay off’.|
|L.E||Establish and Exploit||Attract a substantial audience before monetizing.|
|L.E.R||Re-use/Re-sell||Re-sell/re-use the data/content, usually from User Generated Content websites e.g. create books, posters or other purchasable products from data/content created on site.|
|L.E.P||Platform||Establish a platform, then charge for third parties to participate once an audience has been established e.g. iPhone. See also Facebook.|
|L.E.B||Branding||Build a ‘personal brand’ for yourself/your company. Once awareness is raised, go on Conference/Workshop/‘Expert’ circuit, or release a book, etc.|
|L.S||Sell/Exit||Create a popular application/website, then make it someone else’s problem to monetize e.g. YouTube|
The following business models can be applied in addition to most of the basic revenue models described above.
|M.R||Revenue Share||End-users are offered a cash incentive to make the website/application generate revenue, by sharing a percentage of revenue with them (usually based on their personal referrals or popularity of their content).|
|M.R||Re-Seller||The end-user can re-sell the online service.|
|M.R.A||Affiliate||The end-user is paid to direct customers to the website, typically by listing/selling the products/services elsewhere.|
|M.R.W||White Label||The end-user can brand/tailor the online service and re-sell it as their own (typically taking a percentage of the generated revenue, or paying a fixed subscription cost to the original service).|
We spent a few hours going through the Webware 100 Top Web Apps for 2008, analysing the business model(s) used by each. The chart below shows the results of this survey: 34% use Advertising, 12% a Variable Subscription model, and 8% each for Virtual Products (typically digital downloads), Related Products (typically a large software company offering a free product to attract you to their platform) and Pay-Per-Use.
To find out more about how Box UK can help you get the most out of your web application visit the Web & Mobile Development section of our site.