Digital Business Model

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Group assignment made for the Digitazing your Business Model class at Hult International Business School.

We designed a new digital business model for a publishing company.

Note: We were not hired by the company and all the data used in this project was gathered by the group through internet.

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Digital Business Model

  1. 1. Baen publishing Andrew Boyd Satomi Hisamoto Kate Davids Ivannia Figueroa Charise Mason David Ioli 1
  2. 2. Agenda 2
  3. 3. AgendaCurrent organisation 2
  4. 4. AgendaCurrent organisationBook publishing industry 2
  5. 5. AgendaCurrent organisationBook publishing industryTime to move Print Vs. Digital 2
  6. 6. AgendaCurrent organisationBook publishing industryTime to move Print Vs. DigitalBusinesses models evaluated 2
  7. 7. AgendaCurrent organisationBook publishing industryTime to move Print Vs. DigitalBusinesses models evaluatedChosen business model 2
  8. 8. AgendaCurrent organisationBook publishing industryTime to move Print Vs. DigitalBusinesses models evaluatedChosen business modelCommunity building 2
  9. 9. AgendaCurrent organisationBook publishing industryTime to move Print Vs. DigitalBusinesses models evaluatedChosen business modelCommunity buildingBusiness Budget Estimation 2
  10. 10. AgendaCurrent organisationBook publishing industryTime to move Print Vs. DigitalBusinesses models evaluatedChosen business modelCommunity buildingBusiness Budget EstimationCustomer’s journey 2
  11. 11. Our products: 3
  12. 12. Our products:Webscription e-books 3
  13. 13. Our products:Webscription e-booksPaperbacks 3
  14. 14. Our products:Webscription e-booksPaperbacksAudiobooks 3
  15. 15. Our products:Webscription e-booksPaperbacksAudiobooksFree library 3
  16. 16. The Industry Structure 4
  17. 17. 5
  18. 18. 5
  19. 19. 5
  20. 20. 5
  21. 21. 5
  22. 22. 5
  23. 23. 5
  24. 24. 6
  25. 25. current customers 7
  26. 26. current customers45-65 year old 7
  27. 27. current customers45-65 year oldMale 7
  28. 28. current customers45-65 year oldMaleNo children 7
  29. 29. current customers45-65 year oldMaleNo childrenEducated 7
  30. 30. current customers45-65 year oldMaleNo childrenEducatedBrowse from home 7
  31. 31. current customers I love Sci-fi45-65 year old booksMaleNo childrenEducatedBrowse from home 7
  32. 32. Motivation 8
  33. 33. Motivation 8
  34. 34. Current audience video 9
  35. 35. Time to move?Print Vs. Ebooks 10
  36. 36. Argument for change 11
  37. 37. Argument for change 11
  38. 38. Arguments for change 12
  39. 39. 13
  40. 40. 13
  41. 41. Amazon sold $12010. 2.95 bil lio n in ebo oks in 13
  42. 42. Amazon sold $1 2010. 2.95 bil lio n in ebo oks in ck s. e r ba d p ap as se su rp s al es oo k le ebKi nd 13
  43. 43. Amazon sold $1 2010. 2.95 bil lio n in ebo oks in ck s.100 paperbacks = 115 ebooks. r ba ap e d p as se su rp s al es oo k le eb Ki nd 13
  44. 44. We need to go digital... 14
  45. 45. 3 Businesses models evaluated 15
  46. 46. What is Crowdsourcing? 16
  47. 47. Advantages 17
  48. 48. Advantages Brand Engagement 17
  49. 49. Advantages Brand Engagement Insights 17
  50. 50. Advantages Brand Engagement Insights Cost Saving 17
  51. 51. Advantages BrandCreative Engagement ideas Insights Cost Saving 17
  52. 52. Advantages Brand Creative Engagement ideasR&D Cost Insights Saving 17
  53. 53. Disadvantages 18
  54. 54. DisadvantagesLack ofStability 18
  55. 55. DisadvantagesLack of CopyrightStability issues 18
  56. 56. Disadvantages Lack of Copyright Stability issuesProfitable? 18
  57. 57. Disadvantages Lack of Copyright Stability issuesProfitable? Vandalism 18
  58. 58. Data-driven Business Model 19
  59. 59. information 20
  60. 60. information 20
  61. 61. information information 20
  62. 62. valuable data 21
  63. 63. third partiesvaluable data 21
  64. 64. third partiesvaluable offer tailored products data and/or services 21
  65. 65. third partiesvaluable offer tailored products data and/or services advertising 21
  66. 66. valuable data = 21
  67. 67. Freemium Business Model 22
  68. 68. 23
  69. 69. quantity / quality of services paid by paid by advertising consumers 23
  70. 70. quantity / quality of services Free paid by paid by advertising consumers 23
  71. 71. quantity / quality of services Pa i d Free paid by paid by advertising consumers 23
  72. 72. quantity / quality of services Pa i d80/20 rule Free paid by paid by advertising consumers 23
  73. 73. 24
  74. 74. Our new business model: Freemium + crowdsourcing 25
  75. 75. What is on the website? 26
  76. 76. 27
  77. 77. Engaging the community Forums Offline Games Community Email SNS Mobile 28
  78. 78. Engaging the community Forums 28
  79. 79. Stories 29
  80. 80. StoriesFeatured 29
  81. 81. StoriesFeaturedFavourite Characters 29
  82. 82. ForumsConnect directly to profilesFocus on stories Available on user’s homescreen 30
  83. 83. Engaging the community Forums Offline Games Community Email SNS Mobile 31
  84. 84. Engaging the community Gam e s 31
  85. 85. GamesFollows freemium modelFull site integrationSocial / Casual games 32
  86. 86. Engaging the community Forums Offline Games Community Email SNS Mobile 33
  87. 87. Engaging the community SNS 33
  88. 88. Social networking sitesDrive Traffic to the websiteContestsGame functionality on Facebook?Discussion of books Encourage users to interactbetween them 34
  89. 89. What we are doingWhat authors we are talking toPossible stories for the futureMarketing promotionsSurveys 35
  90. 90. Engaging the community Forums Offline Games Community Email SNS Mobile 36
  91. 91. Engaging the community Mobile 36
  92. 92. MobileDisplay adsText alertsMobile friendly websiteApps (future) 37
  93. 93. Engaging the community Forums Offline Games Community Email SNS Mobile 38
  94. 94. Engaging the community Email 38
  95. 95. Email *%$+,&!"#"&-.&/01/+#$12&-.&3!45& &6.7-8%9&72:/%2;2#& !"#$%&())&Drive traffic to the websiteOffers and promotionsNew books and productsCall to action 39
  96. 96. Engaging the community Forums Offline Games Community Email SNS Mobile 40
  97. 97. Engaging the community Offline 40
  98. 98. OfflineEventsYearly conference Advertising in publishedbooks 41
  99. 99. MarketingOnline adsSEOOffline adsDatabasesStart-up promotionsPay with a tweet 42
  100. 100. Community 43
  101. 101. Community BuildingThe number of members in 5 semesters will be... 44
  102. 102. Community BuildingEnglish speakingThe number of members in 5 semesters will be... 44
  103. 103. Community BuildingEnglish speakingInternet connectionThe number of members in 5 semesters will be... 44
  104. 104. Community BuildingEnglish speakingInternet connectionInterested in Sci-FiThe number of members in 5 semesters will be... 44
  105. 105. Community BuildingEnglish speakingInternet connection = 20,188,330Interested in Sci-FiThe number of members in 5 semesters will be... 44
  106. 106. Community BuildingEnglish speakingInternet connection = 20,188,330Interested in Sci-Fi X 5%The number of members in 5 semesters will be... 44
  107. 107. Community BuildingEnglish speakingInternet connection = 20,188,330Interested in Sci-Fi X 5%The number of members in 5 semesters will be... 504,708 44
  108. 108. Community Building 504,707.80 423,954.52 New Users Total Users 252,353.80 171,601 171,601 80,753.08 80,753 68,136 12,617.501st Semester 2nd Semester 3rd Semester 4th Semester 5th Semester 45
  109. 109. ? 46
  110. 110. ,%$$+ -%.)/$+ 0(1#$%+ + "/0"(.*-1&"()*+$,-."& 56!"+,"(.& !"#$%&()*+ 2334.& G%>*3(.& !"#"$%"& E(3?,& ;3%()"& 73(%/.& 8+/".& ;3)-+<& =">?3(4.& 9:-$"&& E3//%$->F& @7+)"0334& A&B?-C"(D& 47
  111. 111. Freemiumfree 48
  112. 112. Freemiumfree bronze £ 2.99 x m 48
  113. 113. Freemiumfree bronze ✓ No ads £ 2.99 x m 48
  114. 114. Freemiumfree bronze ✓ No ads ✓ Special content £ 2.99 x m 48
  115. 115. Freemiumfree bronze ✓ No ads ✓ Special content ✓ Enhanced game play £ 2.99 x m 48
  116. 116. Freemiumfree bronze silver ✓ No ads ✓ Special content ✓ Enhanced game play £ 2.99 x m £ 6.99 x m 48
  117. 117. Freemiumfree bronze silver ✓ No ads ✓10% off ✓ Special merchandise content ✓ Enhanced game play £ 2.99 x m £ 6.99 x m 48
  118. 118. Freemiumfree bronze silver ✓ No ads ✓ 10% off ✓ Special merchandise content ✓ Downloadable ✓ Enhanced PDFs game play £ 2.99 x m £ 6.99 x m 48
  119. 119. Freemium80%£0 12% 8% £ 2,152,800 £ 3,355,200 49
  120. 120. AdvertisingFree members only5 visits per week15 pages x visit7 ads x page £ 1,036,800Standard CTRStandard revenue 50
  121. 121. Gaming20% play games20% of players spend money 51
  122. 122. Gaming20% play games20% of players spend money £2.50 £5.00 £10.00 £15.00 40% 25% 25% 10% 51
  123. 123. Gaming20% play games20% of players spend money £ 484,519 £2.50 £5.00 £10.00 £15.00 40% 25% 25% 10% 51
  124. 124. MerchandiseOutsourcing everything20% buy merchandiseRevenue is 30% of sales 52
  125. 125. MerchandiseOutsourcing everything20% buy merchandiseRevenue is 30% of sales £10.00 £25.00 £50.00 £100.00 40% 25% 25% 10% 52
  126. 126. MerchandiseOutsourcing everything20% buy merchandise £ 495,875Revenue is 30% of sales £10.00 £25.00 £50.00 £100.00 40% 25% 25% 10% 52
  127. 127. Revenue 53
  128. 128. Revenue Games Merchandise 10% 10% Advertising 22% Freemium 58%Advertising FreemiumMerchandise Games 53
  129. 129. Revenue Games Merchandise 10% 10% Advertising 22% Total = £4,771,194 Freemium 58%Advertising FreemiumMerchandise Games 53
  130. 130. Costs Initial investment £370,000 (servers, computers,technology, web design, external consultants, etc) Operational costs £350,000 x semester (personnel,advertising, maintenance, other expenses) 54
  131. 131. Revenue Revenue£720,000 £350,000 £350,000 £350,000 £350,0001st semester 2nd semester 3rd semester 4th semester 5th semester 55
  132. 132. Revenue Revenue£720,000 £350,000 £350,000 £350,000 £350,0001st semester 2nd semester 3rd semester 4th semester 5th semester 55
  133. 133. The Journey 56
  134. 134. Journey video 57
  135. 135. Questions 58

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