Your Questions About Internet Business Models
Robert asks…
When will the music industry succumb to the Internet?
Pardon me if I sound ignorant, but nowadays it just seems like the record industry is out of touch with the format music is consumed today. I know they still play a large part in radio and album pressing, but more and more people are using the internet and it seems like that won’t fade away any time soon.
Do you think they will change their business model or become more irrelevant due to the rise of the internet?
Thanks!
Jere answers:
Their model has changed little. Unquestionably, the Internet has allowed exposure for more artists, but all of the big name stars understand that the big money is with a label, and the labels help promote the activities, dates and appearances that keep the money flowing.
If you think that “rocking out” to that tinny sound on your earbuds from some pirated download is the same thing as a concert experience in the company of another 6000 fans who know the lyrics just as well as you do, you need to get out more.
Sandy asks…
Do internet companies make more money with ads or with subscriptions?
As a general rule, does the free-service-with-ads business model or the paid-subscription business model tend to make more money for online companies?
Jere answers:
I have to assume advertising is by far the largest overall revenue source, certain paid services that once worked became unprofitable when someone else started offering it for free, some niches like dating may make more from memberships and sticky subscriptions, but again the biggest? Dating site Plenty of Fish is advertising based.
You have to offer a very exclusive valuable service to get people to subscribe to it. Some internet guru money making courses costing thousands may be the most artificially high priced service I have seen, the promise of multiplying your investment is easier to sell than spiritual harmony.
A couple of revenue model related articles:
http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/online-revenue-model-options-internet-business/
Charles asks…
Do internet companies make more money with adds or with subscriptions?
As a general rule, does the free-service-with-ads business model or the paid-subscription business model tend to make more money for online companies?
Jere answers:
That is both a great question and a very difficult one to answer. It varies so much based on the TYPE of website you have and ultimately who is the target audience.
As a general rule, it requires a significant amount of traffic to generate money from advertising. People are being bombarded more and more with ads online and therefore have started to ignore them at a much higher level than before.
Now that said, if your website content and therefore your traffic is for a highly sought after demographic and the CPC (cost-per-click) rates are quite good, then even if you don’t’ have a ton of traffic but you have a sought after niche, then the chances of making money are there. Although it may not be a dramatic amount.
To summarize on the advertising side, unless your site is hugely popular, don’t expect to make a bunch.
Now taking the same factors into account, e.g. Targeted content and demographic, if you are providing quality service, content etc then from a revenue standpoint making money on a recurring basis is much more likely. If you have a price point for your subscription of under $10 per month, then you have an 85% chance that if you convert them into a subscriber ONCE then you will keep them for at least a year.
I know this is long but to summarize, it used to be advertising, now it’s subscriptions UNLESS you have amazing amounts of traffic.
Hope this is helpful
Michael asks…
What product or service would you like to see being sold today?
This is for an Entrepreneurship class that I’m taking over the summer. An assignment that we have is to come up with a business plan/model on how we plan to sell our product or service. I can’t think of any product or service that would be something unique or interesting. Yea, I could just say something like a sporting goods store, restaurant, bakery, video store, any of that garbage. What I’m looking for is something unique, something that really isn’t quite out there yet. Any help is appreciated!!
Jere answers:
Interactive sex toys for use with internet chat…
Each participant has a product which responds in preset ways to preset words/commands input by their chat partner allowing participants to interactively stimulate each other…
You could sell the products , software and chat access… Extend your product line and chat services to cater to sexual preferences and fetishes…
Paul asks…
How do I turn my idea into business reality?
I have a business idea but I don’t have the technical skills to turn it into reality, where can I turn to?
Jere answers:
First, you must know whether your ideas have any high market demand and whether how many online competitor you could be facing. This will see your chances of success. The information could be checked using some of the online application tools.
You could explore into internet business using your ideas as the investment cost is low. To turn your ideas into reality, you do not necessary need technical skills if you are doing online business.
There are a lot of internet business models you could consider of (e.g. Buying and selling domain names, affiliate marketing, auctions, selling digital or physical products, creating paid newsletter or websites and many more).
Find out more from the below link. It will tell you how to setup a successful online business step by step regardless of your experience and background. This include the techniques to know how your ideas have any high market demands and whether how many online competitor you will be facing.
It will also tell you what are the reason behind each step, how you could go about doing it and where you could get the necessary resources free or at a low price.
Hope that it will be helpful to you.
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