Revenue Streams for Social Networks

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Revenue Streams In Social Networks Laurel Papworth

description

A quick and dirty preso put together for BarCamp3 in Sydney - pre roll ad to show that is what happens. Don\'t let the advertisers win - better models. 13 revenue models. Used gaming examples cos it\'s a dev/gamer crowd, with links to business social networks.

Transcript of Revenue Streams for Social Networks

Page 1: Revenue Streams for Social Networks

Revenue Streams

In Social NetworksLaurel Papworth

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PreRoll Ad

This presentation is *brought to you by Blizzard (World of Warcraft) and Coke

*Not

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If you don’t find a revenue model

• Expect one to be found for you• Expect it to be traditional• Which means interruptive and irritating

• Imagine a preroll ad before logging into facebook or Twitter or World of Warcraft.

• Imagine ads plastered Banner, sidebar and embedded.

• Find a better model!

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Successful Social Network

• If you build it …(product development)?

• Will they come …. (user acquisition)?

• Will you make money …. (monetization) ?

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Successful Social Network

• If you build it …(product development)?TIP: LOVE YOUR PRODUCT/SERVICE

• Will they come …. (user acquisition)?TIP: LOVE YOUR COMMUNITY

• Will you make money …. (monetization) ?TIP: LOVE THE MONEY

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Note:

• Gaming data taken from freetoplay.biz• August 2007

• Non-gaming data collated by me (Laurel)

• Article by me (Investor Weekly, Dec 07)

• Credited where possible

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1. Revenue: Virtual Items

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Revenue: Virtual Items

• ARPU can reach $10,000 per user - Would take a WoW user 55 years to reach that amount

• Guesstimate: 2 Billion dollars in 2007, low figures because of the blockade gaming companies put on trades.

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Pixel products in SNs

• SK Telecom “CyWorld” - $300,000 per day• 60m members, 83% of all Koreans in SK • $7.00 per user per year (non-advertising)

• Habbo, tweens world, $16 per month (Oz)• 86 million avatars, 8 million visitors per

month, 200k in Australia, $60M revenue• Avatar goods, “room” goods,

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2. Revenue: Subscription Tier

…may be called “Freemium”

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• Free - 6 million members • $5.00 per month – 1 million membersFor those who can’t count:• $60M annually

• Second Life Freemium – free first account, $10 for second, $72.00 per year for premium

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• 11 million members• $15 per month• 1.1 billion revenues, 560million profit

• No Pay No PLAY model.

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Ad Break

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Brought to you by….

Toyota trucks in World of Warcraft??????

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3. Revenue: Advertising

• Massive, IGA and Double Fusion• EA, Activision, THQ and Microsoft Game

Ubisoft, Atari, and Vivendi Universal • Static ads or dynamic ads. • Sports, racing, contemporary shootersGOOD NEWS/BAD NEWS• Currently $200M will reach $723M in

2010• Suck in roleplaying.

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• Solely Ads• Well over 100 million members• $2.17 per year per member

- $900 Million deal with Google for Ads• Spotlight ad spots in “roped off” areas.

• The Guardian $900M – Aug ‘06, CNN Money $2.17 per member, Jul ‘06

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4. Real Estate

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• Purchase an island for $1675• Monthly fees around $300• 70% of Linden Lab revenue is from

real estate

WATCH OUT• Court cases

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4. Merchandising

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• $15 toy + secret code• April 2005 – Aug 2007 2million sold,

1 million registered online• More than $20m in 24 months

• World of Warcraft CARD games

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5. Auctions and Player Trades

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5. Expansion Packs

“premium packages”

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Everquest Expansions

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6. Event (viral spikes)

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Sports and other games

• Usually free and/or ad-supported• Special zones or times for event• Lots of build-up and buzz• Pay to play during that time, receive

leaderboard and other rewards• Ultimate Baseball Online, Shot Online

(golf), Half-Life 2, Counter-Strike

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7. TrialPay

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Trial Pay

• Cost of Acquisition could be as high as $50• But a WoW user will pay $15 p.m for 12

months? 24 months? Worth it.

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8. Donations

• Gaming – Kingdom of Loathing (1 mgr, 6 employees)

• Wikipedia - donations

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9. Collectible Virtual items

• Pixel Products plus Tournaments/Events

• Not trading exactly…

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10. Pay As You Go to Own

• Pay 1c per minute until the entry barrier is reached. Rest free.

• Banded or tiered?

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Pay as you go (connection)

• Vodafone New Zealand – free to set up a “room” uploading content is standard mobile charge.

• Internet meters in Asia.

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11. Licensing White Label

• Build your network as a hub• License out spokes – CSS people! –

Ning• White label = looks like theirs, but

you manage (3eep)

• eBay’s eco-community?

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12. Sponsorship

• Branding/Badging – blatantly or not• Pharmaceutical companies

sponsoring health sites. BE OPEN! • Gonzo Marketing – Ford Utes

sponsoring Gardening sites

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13. Monetizing User Generated Content

• User Generates Crap (UGC)• User sells crap • Host gets a clip of the sale• User is a distributor, advertiser,

marketer• User signs up network

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• Mobile videos (cost 25c, creator gets 5c)

• Avatar housing in Second Life (Anshe Chung)

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Revenue Share

• Member as distributor• Member gets income (Meraki mesh)• Member invests (social finance Zopa)• Member works (escrow projects

eLance)• Member ahem… (p2p escorts, not

media)

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LaurelPapworth

• Social Network Hostess-with-the-Mostess• +61 (4)32684992• lpapworth (at) gmail.com• Sydney Australia• Blog: http://silkcharm.blogspot.com• Biz site: http://laurelpapworth.com

• For BarCampSydney3 - developed while drinking and carousing excessively