The logic that the user is responsible for the income of the business is abandoned. Instead, the main source of revenue comes from a third party, which cross-finances whatever free or low-priced offering attracts the users. A very common case of this model is financing through advertisement, where attracted customers are of value to the advertisers who fund the offering. This concept facilitates the idea of 'separation between revenue and customer'.
How they do it: YouTube’s platform, website and mobile apps are all free to use. In fact, over 5 billion videos are watched every day. In the absence of paying customers, advertisements on YouTube cross-finance the vast infrastructure needed to support YouTube’s operations.
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How they do it: Mozilla doesn’t charge its users for the download or use of the software. However by using the software, Mozilla gets access to the users data and searches, which the company can then market to search engine operators and other advertisers.
Learn more about Mozilla →
How they do it: Although regular users can use the platform for free, LinkedIn integrates targeted ads for services as well as jobs in the individual users platform experience. Hence it is able to generate revenue from both free as well as premium users.
Learn more about LinkedIn →
How they do it: Facebook is free for private individuals and businesses. The main monetization happens through the possibility for companies for targeted advertising.
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How they do it: In 2014, Pinterest generated its first revenue, when it began charging advertisers to promote their products to the site’s millions of users, consisting of hobbyists, vacation planners, and do-it-yourselfers. It generates revenue by displaying advertisements in the form of “Promoted Pins.” Promoted Pins are based on an individual user’s interests, things done on Pinterest, or a result of visiting an advertiser’s site or app (via re-targeting).
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Below, the top industries for the pattern "Hidden Revenue" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Below, the pattern "Hidden Revenue" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
