Business Models

Through technological advancements, businesses have had to change their business models to make their company competitive in today’s market. These advancement have also paved the way for new business models to emerge. This post will discuss two types of e-commerce business models. The first is the content subscription service and the second is an affiliate revenue model of cost per click.

Content Subscription Service (Netflix)

The first is Netflix, a subscription business model that provides content services.

Source: PCmag.com

Source: PCmag.com

Those who subscribe to Netflix are able to access television shows and movies through online streaming by paying a monthly fee. The user is able to access this content without having to store the files on their personal hard drives. Services like Netflix have become possible due to the increase in high broadband speeds.

This service is similar to the service provided in Australia by ABC iView. Currently Netflix is not available in Australia due to geo-coding of IP addresses however those who are tech-savvy are able to create a Virtual Private Network (VPN) to mask their IP addresses to access this content.

 This has proven to be a successful business model. Netflix has now overtaken HBO and has so far made over $1.15 billion USD.

 

Affiliate Revenue Pay Per Click (PPC) (Vlogger Chloe Morello)

Chloe Morello is an Australian Vlogger who rose to fame for her make-up tutorials on Youtube. Although she gained prominence in her Youtube account (https://www.youtube.com/user/ChloeMorello), Chloe has used other social media platforms such as Instagram to promote her brand.

Chloe has affiliate relationships with companies of brands that she has promoted on her social media such as Sigma who specialise in makeup and makeup brushes. Revenue is generated on a Pay Per Click model and Chloe uses her social media sites and Youtube to direct viewers to the Sigma website. For those who purchase make-up brushes through Chloe’s affiliate link, Sigma pays a percentage to Chloe.

This business model can also be defined as a hybrid revenue model as Chloe uses the Affiliate and Community Model to gain revenue.

Source: Youtube

Source: Youtube

References:

Casper, A. 2014. Move over HBO, Netflix has got this. Viewed 01 September 2014, http://www.reviewjournal.com/entertainment/reel/move-over-hbo-netflix-has-got

Hopewell, L. 2014. Australian TV Execs Are Upset that Netflix Exists. Viewed 01 September 2014, http://www.gizmodo.com.au/2014/03/australian-tv-network-execs-are-upset-that-netflix-exists/

Bouvain, P. (2014). Internet Marketing. Retrieved from:http://learnonline.canberra.edu.au/course/view.php?id=12302

 Jackson, S. 2014. ‘Beaut of an idea eats into mag ads’. Viewed on 01 September 2014. http://www.theaustralian.com.au/media/beaut-of-an-idea-eats-into-mag-ads/story-e6frg996-1226843001457?nk=cbabbf4a6758c712ffda3957b95766b0

 

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One thought on “Business Models

  1. Hey,
    Your blog looks awesome! I like how you have shown the success of the content subscription service through your example of Netflix!

    If you get a chance have a look at my blog.

    Dannie

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