The document discusses business models and strategies for online music streaming services. It covers potential revenue streams like advertising, freemium plans, and e-commerce. It also addresses challenges like user acquisition costs, building social features, and achieving profitability. Key recommendations include testing assumptions, focusing on one main revenue stream initially, and leveraging partnerships to reduce customer acquisition costs.

1. Nico Perez Mixcloud Co-founder

2. Contents Revenue - Models - Checking assumptions - Tips from Mixcloud - Challenges - Mix/single streams - Ad space models - Transactional models Costs - Customer acquisition - Conversion funnels - Social + partnerships - People costs Profits

3. REVENUE

7. The simple model Revenue – Direct costs = Gross profit Gross Profit – Overheads = EBITDA

8. The simple model Revenue – Direct costs = Gross profit Ads Freemium Services E-commerce Servers Licenses Customer acquisition Gross Profit – Overheads = EBITDA Salaries Rent

9. The complex (acronyms) model Net sales revenue – Cost of goods sold = Gross profit – SG&A expenses (costs of operating the company) = EBITDA – Depreciation & amortization = EBIT – Interest expense (cost of borrowing money) = EBT – Tax expense = Net income (EAT)

10. Mixcloud tips (context)

11. Mixcloud tips (context)

15. PIRACY! Mixcloud Mixcloud Example: The Online Radio/Music Space Mass market Consumer pays Someone else pays Specialist

18. Freemium/Transactional Models

19. Freemium/Transactional Models “ We believe the future business model for social games will be primarily transactions… consumers play for free supported by advertising but have the option to pay for virtual items and premium features ” Kristian @ Playfish, July 2008

20. Freemium Model Learnings and Tips Distribution platforms Don ’ t force them to pay Access not ownership Gaming as a service , not product “ Virtual goods have a value that ’ s very tangible… maximised around social emotion and social expression ” - Sebastian, COO Quality control on ads

21. COSTS

22. What you can control Revenue – Direct costs = Gross profit Ads Freemium Services E-commerce Servers Licenses Customer acquisition Gross Profit – Overheads = EBITDA Salaries Rent

23. What you can control Revenue – Direct costs = Gross profit Ads Freemium Services Servers Licenses Customer acquisition Gross Profit – Overheads = EBITDA Salaries Rent

26. Visitor Registered user Integrate with FB + Twitter Invite friends 18% <20% 10% Conversion funnel + Viral loop (see also Dave McClure on metrics)

28. Mixcloud <3 partnerships

31. PROFITS

33. What we covered Revenue - Models - Checking assumptions - Tips from Mixcloud - Challenges - Mix/single streams - Ad space models - Transactional models Costs - Customer acquisition - Conversion funnels - Social + partnerships - People costs Profits

35. In business: “ If it doesn’t make dollars it doesn’t make sense” (But do it for the love!)

36. The end. Flickr CC credits: http://www.flickr.com/photos/thomashawk/228228018/ http://www.flickr.com/photos/8078381@N03/3279725831/ http://en.wikipedia.org/wiki/History_of_radio http://www.flickr.com/photos/9948354@N08/763399258/ http://www.flickr.com/photos/emry/369409914 http://informationarchitects.jp/web-trend-map-4-final-beta/

37. Please get in touch Keen to hear your thoughts Email: [email_address] Twitter: @nicoperez / @mixcloud