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"Only eight basic revenue models for all businesses"

What business are you in? Take your pick...

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Peter Mortesen, Senior Strategist, Jump

Occasionally, it's fun to back up and look at the big picture. Peter Mortensen, senior Strategist at Jump, says there are only eight revenue models that any business can use, based on the work of Prof. Andy Hargadon of UC Davis. But within those business models, local media are "just scratching the surface." Speaking at the Association of Alternative Newsmedia (AAN) in January, 2012, Here's how Mortensen applies these models to media companies:


1. Unit sales
Simple sales of a product. Mortensen pointed out The Guardian in England sells about two or three EBooks a week, a top best-seller being the Royal Wedding book.  Coffee shops in the unused space downstairs might also fit the bill. We can also see  sales of photographs and certificate stores in this category, as long as it is sales of things the media company owns. 

2. Advertising sales  

Local Media is familiar with this model. So is Google.

3. Franchise fees  

McDonaldesque franchises which "pay you to replicate your knowledge" are rare in the media world.  TimeOut, which only owns it's London media, but franchises the rest TimeOut properties around the world is an example.

4.Utility fees

Pay-on-consumption, like a utility, such as PG.  Mortensen  points to sales of archival information as a possibility for this model. Flattr, a new company that monetizes publications archives is showing promising results in Germany, Mortesen says. 

5. Subscription 

The non-media version of this is a health club. Mortensen's media example is the New York Times which is proving subscription sales is a viable model for sophisticated news franchises. A variety of small and mid-sized newspapers are also generating revenues from online subscriptions as part of an overall revenues strategy. 

6. Transaction fees

A small cut of someonelses sale, such as Visa takes. Mortensen used the example of Spot.us, in which journalists get investments for specific stories. However,  sales of travel products and other kinds of direct onsite transactions are a huge business. Deals also fall in to the the transaction category. 

7. Professional service fees 

 Increasingly local media companies are offering services in return for professional fees, more like a tax consultant.  He mentions the St. Louis beacon which provides training on Facebook and Twitter. More local media companies are forming inhouse ad agencies that sell services as well. 

8. Licence fees

The right to access and use content as if it was their intellectual property.   A number of attempts have started up, such as PressPlus and Cont3nt that allow media companies to correctly licence content more easily. The typical media use of licencing are rights to broadcast events. 

“Journalism is just scratching the surface with revenue models,” Mortensen said.

Pete Mortensen, senior strategist at Jump Associates has a particular talent for articulating and expressing social, design and business questions in surprising forms – and answering them, too. A journalist by training, he has written and edited for numerous publications, including Wired, BusinessWeek, Huffington Post, and the Windsor Times.  JUMP is a 51 person consulting firm that specializes in producing ideas to create and reinventing businesses.  


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