Revenue Streams In Social Networks Laurel Papworth
Nov 01, 2014
Revenue Streams
In Social NetworksLaurel Papworth
PreRoll Ad
This presentation is *brought to you by Blizzard (World of Warcraft) and Coke
*Not
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!
Successful Social Network
• If you build it …(product development)?
• Will they come …. (user acquisition)?
• Will you make money …. (monetization) ?
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
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
1. Revenue: Virtual Items
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.
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,
2. Revenue: Subscription Tier
…may be called “Freemium”
• 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
• 11 million members• $15 per month• 1.1 billion revenues, 560million profit
• No Pay No PLAY model.
Ad Break
Brought to you by….
Toyota trucks in World of Warcraft??????
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.
• 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
4. Real Estate
• Purchase an island for $1675• Monthly fees around $300• 70% of Linden Lab revenue is from
real estate
WATCH OUT• Court cases
4. Merchandising
• $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
5. Auctions and Player Trades
5. Expansion Packs
“premium packages”
Everquest Expansions
6. Event (viral spikes)
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
7. TrialPay
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.
8. Donations
• Gaming – Kingdom of Loathing (1 mgr, 6 employees)
• Wikipedia - donations
9. Collectible Virtual items
• Pixel Products plus Tournaments/Events
• Not trading exactly…
10. Pay As You Go to Own
• Pay 1c per minute until the entry barrier is reached. Rest free.
• Banded or tiered?
Pay as you go (connection)
• Vodafone New Zealand – free to set up a “room” uploading content is standard mobile charge.
• Internet meters in Asia.
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?
12. Sponsorship
• Branding/Badging – blatantly or not• Pharmaceutical companies
sponsoring health sites. BE OPEN! • Gonzo Marketing – Ford Utes
sponsoring Gardening sites
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
• Mobile videos (cost 25c, creator gets 5c)
• Avatar housing in Second Life (Anshe Chung)
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)
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