Hidden Revenue 21#
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'.
Examples: Iconic Cases
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: As Hotmail drove a lot of traffic on its website from its email users, it monetized that traffic with ads. These include sponsored articles, as well as display ads. The core product remained free to the user but Hotmail generated revenue from advertisers.
Learn more about Hotmail →
How they do it: The advertising model, popular with industries such as media (radio, TV, websites), was adopted by Ryanair. If there is a flat surface anywhere on a Ryanair plane, chances are good that they have placed an advertisement on it. Advertisers can also place ads on the booking website, Ryanair.com.
Learn more about Ryanair →
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.
Learn more about YouTube →
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 →
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.
Top Industries
67% of firms using pattern
26% of firms using pattern
18% of firms using pattern
All Industries
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.
Top Co-Occurrences
11 pattern co-occurrences
7 pattern co-occurrences
6 pattern co-occurrences