Business Models Advertising/Subscription Hybrid(Dual Rev. Stream) Advertising Only(Single Rev. Stream) SubscriptionOnly(Single Rev. Stream) Transaction(Single Rev. Stream) DVDs Music TV Radio Google Outdoor HBO Newsletters Movies Cable Newspapers Magazines Content ownership cost is highest Content access cost is low Content access cost is higher Content access is free Content creation, distribution, access, and advertising-delivery business Content creation, distribution, and advertising-delivery business Content creation, distribution, and access business Content creation, distribution, and retail business
Internet Business Models • Ad supported – Google, Yahoo, Gawker • Hybrid – Cable TV, NY Times, Pandora • Subscription– HBO, Economist • Commerce – eBay, Amazon
Types of Business Models • B2B – Business to business: GE, Cisco • B2C– Business to consumers: Apple • C2C – Consumer to consumer: Craig’s List
Types of Websites/Apps • Content publishers – NY Times, ESPN • Content aggregators – Google News • Social networks (communities) – Facebook • Facilitators – Craig’s List • Peer-to-Peer – Wikipedia • Gaming– Candy Crunch • Financial Services – E-Trade • Travel– Expedia • Health – WebMD • Education – Coursera, Code Academy
Online Advertising Models • CPM– Cost-per-thousand (M) impressions • Unlike TV, no start or end date • CPM model used primarily for branding • Sold guaranteed and programmatically • CPC– Cost-per-click • Auction – AdWords • Modified Dutch auction • Sold programmatically also • CPA – Cost-per-acquisition or per-action • Rev Share (typically a hybrid model) • Sponsorship
Online Pricing Model • Go tohttp://charleswarner.us/cseindex.html and open “Daily Comedy Sponsorship Costs” spreadsheet for an example of an ad pricing (sponsorship) model.
IAB Standard Ad Units • http://www.iab.net/adunitportfolio • Check out the latest, because changes occur from time to time.
A Business Model Must Scale • In order to get financing from anyone other than friends and family, your startup must be able to scale. • Scale means a company must add revenue faster than it adds costs. • Writing a novel scales– you don’t have to write a new copy for everyone who buys the book. • Software scales – write it once and sell it to lots of people.
No Scale • Services don’t scale. • Services that charge by the hour, such as production companies, advertising agencies, consulting, law firms, gardeners, etc. don’t scale. • No scale, no $ from investors.
Setting Up a Website • Get a domain name • Buy it (register it) and close mutations (.net, .tv, .us, etc.) on GoDaddy.com or namesecure.com or negotiate with squatter (afternic.com) • Serving the domain name and site • Web hosting company – where you registered it or third party such as GoDaddy.com or HostGator.com. • Microsoft or Linux server software (some hosting services give you a choice – Linux is less expensive. • MySql and Fetch or other interfaces as needed (need some way to FTP files to and edit site) • E-mail addresses • Transfer domain name to server
Design a Site • Online platform • Proprietary platform • Server company design software, i.e. SquareSpace • Original design • Do it yourself - HTML, CSS • Word Press, e.g. • Drupal (PHP, open source)
Setting Up a Website • Platform/Architecture • Proprietary (Movable Type, InGage e.g.) vs. open source (Drupal, e.g.) • Get an expert webmaster • Get ad serving if ad supported • Get video serving (Brightcove, e.g.) • Commerce – secure payment, Verisign, PayPal, or outsource it.
Setting Up a Website • Marketing (the key to success) • Social Media -- Create buzz (Twitter, Facebook, Instagram, Pinterest, SnapChat, LinkedIn) • Publicity (PR firm) • Advertising (reciprocal deals, Google Search, programmatic) • Viral marketing (not as effective as advertising)