One of the interesting principles we’re seeing with new digital companies are the new digital business models.
Most internet services we use are supported by advertising (Facebook, LinkedIn, Google). Media companies offer a range of digital business models from monthly subscription (e.g. Netflix), advertising funded (e.g. YouTube), both subscription and advertising (e.g. NOW TV) and freemium (e.g. Spotify).
The internet coined the term ‘as a Service’ (with the postfix ‘aaS’), which essentially rents shared platform ‘space’ or utilisation. These are usually available on a minimal-term contract of a month. One example here is Amazon’s hosting facility, AWS (Amazon Web Services) which offers hourly pricing, in a market which used to have annual contracts.
Linked to this are ‘marketplaces’ which combined large numbers of sellers and buyers. The biggest examples here are eBay, Alibaba, and Amazon. Apple App Store and Google Play fall into this category.
These marketplaces transformed into other offerings, such as what we now call crowdfunding (e.g. Kickstarter) and charity sponsorship (e.g. JustGiving). Continue reading Future digital business models