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Three Revenue Models for Digital Content Delivery: Subscription, A La Carte, and Advertising-Supported (Free and Freemium)
There are three revenue models for delivering content on the Internet. The two “pay” models are subscriptions (usually “all you can eat”) and a la carte (pay for what you use). The third model uses advertising revenue to provide content for free, usually with a “freemium” (higher price) option. There is also completely free, user-generated content, which we will discuss later. Contrary to early analysts’ projections that “free” would drive “paid” out of business (“information wants to be free”), it turns out that both models are viable now and in the near future. Consumers increasingly choose to pay for high-quality, convenient, and unique content, and they have gladly accepted “free” advertiser-supported content when that content is deemed not worth paying for but entertaining nevertheless. There’s nothing contradictory about all three models working in tandem and cooperatively: free content can drive customers to paid content, as the recorded music firms have discovered with services like Pandora and Spotify.
Detail :
The assignment for this week asks you to identify three online sources of content that exemplify one of the three digital content revenue models (subscription, a la carte, and advertising-supported) discussed in Chapter 10.
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