What's a good API business model? If you have an API, or you plan to have an open API, or just want to use APIs in your web or mobile app, what models make sense? See 20 different API business models. This comprehensive survey of the gamut of today's options covering anything from paid to getting paid to indirect.

1. API
Business Models
20 models in 20 minutes
John
Musser,
ProgrammableWeb
@johnmusser
API
Strategy
Conference,
2013

2. yea rs
7
Is
,000
AP tor ies
8
new s
s
3 ,000

3. why, why, why?

4. Why API? Many reasons…
Drive innovation BizDev / LeadGen
Marketing channel
User acquisition New line of business
Upsell opportunity API as Product Increase footprint
Device and mobile support Distribution channel
Partner opportunities
Content acquisition
Drive traffic Increase stickiness
Accelerate internal projects Extend product

5. ET #1
I SECR
A P
An API strategy
is not
an API business model

6. A very brief history of API
business models…

7. API Business Models, 2005

8. API Business Models, 2013

9. ET #2
I SECR
A P
Most APIs have
>1
type of ROI

10. Free

11. Developer Pays

12. Pay as You Go
“Pay
only
for
what
you
use.
There
is
no
minimum
fee.”

13. Tiered Pricing

14. Freemium

15. Unit-based Pricing

16. Unit-based Pricing

17. Beware complex pricing

18. Transaction Fee
2.9%
+
30¢
per
transacDon

19. Developer Gets Paid

20. Affiliate Revenue Share: CPA
+
=
$

21. Revenue Share: CPC

22. APIs, now a billion $ business
=
$2
billion/year
Affiliate Network
“90%
of
what
we
do
is
business
through
APIs”
John
Wa9on,
Expedia
Affiliate
Network,
TravoluGon.co.uk,
April
2012

23. Recurring Revenue Share
• 3%
of
$9.99/month
per
“Unlimited”
subscriber
• 2%
of
$4.99/month
per
“Rdio
Web”
subscriber
Affiliate Program • 7%
of
purchase
price
for
each
MP3
purchased
Recurring
revenue
every
month
for
as
long
as
a
subscriber
recruited
by
you
remains
an
Rdio
subscriber

24. ET #3
I SECR
A P
You need to bake your
business model into
your API

25. Indirect

26. Content Acquisition
3rd
party
applicaOons
built
on
60%
of
all
tweets
came
from
the
[eBay]
Open
PlaTorm
3rd
party
clients
[2010]
accounOng
for
$6.9
billion
in
Gross
Merchandise
Volume
(GMV)
in
2008.
Kumar Kandaswamy, May 31, 2012 Ryan Sarver, Chirp Conference, April 4, 2010

27. Content Syndication

28. API as SaaS upsell

29. APIs, the glue of SaaS
200
SaaS
companies
with
API
success
stories:
“We
find
that
if
our
customers
use
any
single
integraOon,
they
are
three
Omes
as
likely
to
convert
to
paid.”
Sunir Shah, FreshBooks Blog, Aug 25, 2010

30. ET #4
I SECR
A P
API business models
are not
1 size fits all

31. NPR: Internal use = API growth
NPR Music
Facebook Integration iPhone app
NPR
iPad app
Relaunched NPR
mobile site
Player 2.0
NPR News
Android app
NPR Music Homepage NPR Blogs
Remix Improvements Made API Friendly
Story Page
Improvements
Source
NPR.
Shown
in
millions
via
Ominture.
Last
updated
September
23,
2010.

32. Evernote: 99% internal calls
External
usage
API
usage
from
internal
apps

33. Netflix platform: 800 devices
Daniel Jacobson, Netflix Engineering Blog, July 9, 2012

34. ET #5
I SECR
A P
Internal use may
be the biggest API
use case

35. API Business Models

36. Thank You
QuesOons,
ideas,
comments?
jmusser@gmail.com
@johnmusser