Revenue Streams In Social Networks Laurel Papworth
PreRoll Ad This presentation is *brought to you by Blizzard (World of Warcraft) and Coke *Not
If you don’t find a revenue model <ul><li>Expect one to be found for you </li></ul><ul><li>Expect it to be traditional </l...
 
Successful Social Network <ul><li>If you  build it  …(product development)? </li></ul><ul><li>Will  they come  …. (user ac...
Successful Social Network <ul><li>If you  build it  …(product development)? TIP: LOVE YOUR PRODUCT/SERVICE </li></ul><ul><...
Note: <ul><li>Gaming data taken from freetoplay.biz </li></ul><ul><li>August 2007 </li></ul><ul><li>Non-gaming data collat...
1. Revenue: Virtual Items
 
Revenue: Virtual Items <ul><li>ARPU can reach $10,000 per user  - Would take a WoW user 55 years to reach that amount </li...
Pixel products in SNs <ul><li>SK Telecom “CyWorld” - $300,000 per day </li></ul><ul><li>60m members, 83% of all Koreans in...
2. Revenue: Subscription Tier … may be called “Freemium”
<ul><li>Free - 6 million members  </li></ul><ul><li>$5.00 per month – 1 million members </li></ul><ul><li>For those who ca...
<ul><li>11 million members </li></ul><ul><li>$15 per month </li></ul><ul><li>1.1 billion revenues, 560million profit </li>...
 
Ad Break
Brought to you by…. Toyota trucks in World of Warcraft??????
3. Revenue: Advertising <ul><li>Massive, IGA and Double Fusion </li></ul><ul><li>EA, Activision, THQ and Microsoft Game Ub...
 
<ul><li>Solely Ads </li></ul><ul><li>Well over 100 million members </li></ul><ul><li>$2.17 per year per member -  $900 Mil...
 
4. Real Estate
<ul><li>Purchase an island for $1675 </li></ul><ul><li>Monthly fees around $300 </li></ul><ul><li>70% of Linden Lab revenu...
4. Merchandising
<ul><li>$15 toy + secret code </li></ul><ul><li>April 2005 – Aug 2007 2million sold, 1 million registered online </li></ul...
 
 
5. Auctions and Player Trades
 
5. Expansion Packs “premium packages”
Everquest Expansions
6. Event  (viral spikes)
Sports and other games <ul><li>Usually free and/or ad-supported </li></ul><ul><li>Special zones or times for event </li></...
7. TrialPay
Trial Pay <ul><li>Cost of Acquisition could be as high as $50 </li></ul><ul><li>But a WoW user will pay $15 p.m for 12 mon...
8. Donations <ul><li>Gaming – Kingdom of Loathing (1 mgr, 6 employees) </li></ul><ul><li>Wikipedia - donations </li></ul>
9. Collectible Virtual items <ul><li>Pixel Products plus Tournaments/Events </li></ul><ul><li>Not trading exactly…  </li><...
10. Pay As You Go to Own <ul><li>Pay 1c per minute until the entry barrier is reached. Rest free. </li></ul><ul><li>Banded...
Pay as you go (connection) <ul><li>Vodafone New Zealand – free to set up a “room” uploading content is standard mobile cha...
11. Licensing White Label <ul><li>Build your network as a hub </li></ul><ul><li>License out spokes – CSS people! – Ning </...
12. Sponsorship <ul><li>Branding/Badging – blatantly or not </li></ul><ul><li>Pharmaceutical companies sponsoring health s...
13. Monetizing User Generated Content <ul><li>User Generates Crap (UGC) </li></ul><ul><li>User sells crap  </li></ul><ul><...
<ul><li>Mobile videos (cost 25c, creator gets 5c) </li></ul><ul><li>Avatar housing in Second Life (Anshe Chung) </li></ul>
Revenue Share <ul><li>Member as distributor </li></ul><ul><li>Member gets income (Meraki mesh) </li></ul><ul><li>Member in...
LaurelPapworth <ul><li>Social Network Hostess-with-the-Mostess </li></ul><ul><li>+61 (4)32684992 </li></ul><ul><li>lpapwor...
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Revenue Streams for Social Networks

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A quick and dirty preso put together for BarCamp3 in Sydney - pre roll ad to show that is what happens. Don\'t let the advertisers win - better models. 13 revenue models. Used gaming examples cos it\'s a dev/gamer crowd, with links to business social networks.

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  • Revenue Streams for Social Networks

    1. 1. Revenue Streams In Social Networks Laurel Papworth
    2. 2. PreRoll Ad This presentation is *brought to you by Blizzard (World of Warcraft) and Coke *Not
    3. 3. If you don’t find a revenue model <ul><li>Expect one to be found for you </li></ul><ul><li>Expect it to be traditional </li></ul><ul><li>Which means interruptive and irritating </li></ul><ul><li>Imagine a preroll ad before logging into facebook or Twitter or World of Warcraft. </li></ul><ul><li>Imagine ads plastered Banner, sidebar and embedded. </li></ul><ul><li>Find a better model! </li></ul>
    4. 5. Successful Social Network <ul><li>If you build it …(product development)? </li></ul><ul><li>Will they come …. (user acquisition)? </li></ul><ul><li>Will you make money …. (monetization) ? </li></ul>
    5. 6. Successful Social Network <ul><li>If you build it …(product development)? TIP: LOVE YOUR PRODUCT/SERVICE </li></ul><ul><li>Will they come …. (user acquisition)? TIP: LOVE YOUR COMMUNITY </li></ul><ul><li>Will you make money …. (monetization) ? TIP: LOVE THE MONEY </li></ul>
    6. 7. Note: <ul><li>Gaming data taken from freetoplay.biz </li></ul><ul><li>August 2007 </li></ul><ul><li>Non-gaming data collated by me (Laurel) </li></ul><ul><li>Article by me (Investor Weekly, Dec 07) </li></ul><ul><li>Credited where possible </li></ul>
    7. 8. 1. Revenue: Virtual Items
    8. 10. Revenue: Virtual Items <ul><li>ARPU can reach $10,000 per user - Would take a WoW user 55 years to reach that amount </li></ul><ul><li>Guesstimate: 2 Billion dollars in 2007, low figures because of the blockade gaming companies put on trades. </li></ul>
    9. 11. Pixel products in SNs <ul><li>SK Telecom “CyWorld” - $300,000 per day </li></ul><ul><li>60m members, 83% of all Koreans in SK </li></ul><ul><li>$7.00 per user per year (non-advertising) </li></ul><ul><li>Habbo, tweens world, $16 per month (Oz) </li></ul><ul><li>86 million avatars, 8 million visitors per month, 200k in Australia, $60M revenue </li></ul><ul><li>Avatar goods, “room” goods, </li></ul>
    10. 12. 2. Revenue: Subscription Tier … may be called “Freemium”
    11. 13. <ul><li>Free - 6 million members </li></ul><ul><li>$5.00 per month – 1 million members </li></ul><ul><li>For those who can’t count: </li></ul><ul><li>$60M annually </li></ul><ul><li>Second Life Freemium – free first account, $10 for second, $72.00 per year for premium </li></ul>
    12. 14. <ul><li>11 million members </li></ul><ul><li>$15 per month </li></ul><ul><li>1.1 billion revenues, 560million profit </li></ul><ul><li>No Pay No PLAY model. </li></ul>
    13. 16. Ad Break
    14. 17. Brought to you by…. Toyota trucks in World of Warcraft??????
    15. 18. 3. Revenue: Advertising <ul><li>Massive, IGA and Double Fusion </li></ul><ul><li>EA, Activision, THQ and Microsoft Game Ubisoft, Atari, and Vivendi Universal </li></ul><ul><li>Static ads or dynamic ads. </li></ul><ul><li>Sports, racing, contemporary shooters </li></ul><ul><li>GOOD NEWS/BAD NEWS </li></ul><ul><li>Currently $200M will reach $723M in 2010 </li></ul><ul><li>Suck in roleplaying. </li></ul>
    16. 20. <ul><li>Solely Ads </li></ul><ul><li>Well over 100 million members </li></ul><ul><li>$2.17 per year per member - $900 Million deal with Google for Ads </li></ul><ul><li>Spotlight ad spots in “roped off” areas. </li></ul><ul><li>The Guardian $900M – Aug ‘06, CNN Money $2.17 per member, Jul ‘06 </li></ul>
    17. 22. 4. Real Estate
    18. 23. <ul><li>Purchase an island for $1675 </li></ul><ul><li>Monthly fees around $300 </li></ul><ul><li>70% of Linden Lab revenue is from real estate </li></ul><ul><li>WATCH OUT </li></ul><ul><li>Court cases </li></ul>
    19. 24. 4. Merchandising
    20. 25. <ul><li>$15 toy + secret code </li></ul><ul><li>April 2005 – Aug 2007 2million sold, 1 million registered online </li></ul><ul><li>More than $20m in 24 months </li></ul><ul><li>World of Warcraft CARD games </li></ul>
    21. 28. 5. Auctions and Player Trades
    22. 30. 5. Expansion Packs “premium packages”
    23. 31. Everquest Expansions
    24. 32. 6. Event (viral spikes)
    25. 33. Sports and other games <ul><li>Usually free and/or ad-supported </li></ul><ul><li>Special zones or times for event </li></ul><ul><li>Lots of build-up and buzz </li></ul><ul><li>Pay to play during that time, receive leaderboard and other rewards </li></ul><ul><li>Ultimate Baseball Online, Shot Online (golf), Half-Life 2, Counter-Strike </li></ul>
    26. 34. 7. TrialPay
    27. 35. Trial Pay <ul><li>Cost of Acquisition could be as high as $50 </li></ul><ul><li>But a WoW user will pay $15 p.m for 12 months? 24 months? Worth it. </li></ul>
    28. 36. 8. Donations <ul><li>Gaming – Kingdom of Loathing (1 mgr, 6 employees) </li></ul><ul><li>Wikipedia - donations </li></ul>
    29. 37. 9. Collectible Virtual items <ul><li>Pixel Products plus Tournaments/Events </li></ul><ul><li>Not trading exactly… </li></ul>
    30. 38. 10. Pay As You Go to Own <ul><li>Pay 1c per minute until the entry barrier is reached. Rest free. </li></ul><ul><li>Banded or tiered? </li></ul>
    31. 39. Pay as you go (connection) <ul><li>Vodafone New Zealand – free to set up a “room” uploading content is standard mobile charge. </li></ul><ul><li>Internet meters in Asia. </li></ul>
    32. 40. 11. Licensing White Label <ul><li>Build your network as a hub </li></ul><ul><li>License out spokes – CSS people! – Ning </li></ul><ul><li>White label = looks like theirs, but you manage (3eep) </li></ul><ul><li>eBay’s eco-community? </li></ul>
    33. 41. 12. Sponsorship <ul><li>Branding/Badging – blatantly or not </li></ul><ul><li>Pharmaceutical companies sponsoring health sites. BE OPEN! </li></ul><ul><li>Gonzo Marketing – Ford Utes sponsoring Gardening sites </li></ul>
    34. 42. 13. Monetizing User Generated Content <ul><li>User Generates Crap (UGC) </li></ul><ul><li>User sells crap </li></ul><ul><li>Host gets a clip of the sale </li></ul><ul><li>User is a distributor, advertiser, marketer </li></ul><ul><li>User signs up network </li></ul>
    35. 43. <ul><li>Mobile videos (cost 25c, creator gets 5c) </li></ul><ul><li>Avatar housing in Second Life (Anshe Chung) </li></ul>
    36. 44. Revenue Share <ul><li>Member as distributor </li></ul><ul><li>Member gets income (Meraki mesh) </li></ul><ul><li>Member invests (social finance Zopa) </li></ul><ul><li>Member works (escrow projects eLance) </li></ul><ul><li>Member ahem… (p2p escorts, not media) </li></ul>
    37. 45. LaurelPapworth <ul><li>Social Network Hostess-with-the-Mostess </li></ul><ul><li>+61 (4)32684992 </li></ul><ul><li>lpapworth (at) gmail.com </li></ul><ul><li>Sydney Australia </li></ul><ul><li>Blog: http://silkcharm.blogspot.com </li></ul><ul><li>Biz site: http://laurelpapworth.com </li></ul><ul><li>For BarCampSydney3 - developed while drinking and carousing excessively </li></ul>

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