Revenue Models and Their Advantages and Disadvantages, and Examples

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Web Catalog Revenue Models: The seller establishes a brand image, and then uses the strength of that image to sell through printed catalogs mailed to prospective buyers. Buyers place orders by mail or by calling the seller’s toll-free telephone number

Advantages: 1/ A wide variety of consumer items, including apparel, computers, electronics, house wares, and gifts. 2/ Customers can place orders through the Web site or by telephone

Disadvantages: For many types of products, people are still unwilling to buy through a Web site

Examples: Amazon.com is a hugely successful business using the Web catalog model for many reasons: –There are over 4 million books in print throughout the world, but no physical store could hold them –Books and videos are small-ticket items people are willing to buy without inspection

Digital Content Revenue Models: Firms that own intellectual property have embraced the Web as a new and highly efficient distribution mechanism.

Advantages: Offers a variety of information services, including legal information, corporate information, government information, news, and resources for academic libraries.

Disadvantages: To break even, academic journals often must charge each subscriber hundreds or even thousands of dollars per year

Examples: One of the first academic organizations to make the transition to electronic distribution on the Web was (not surprisingly) the Association for Computer Machinery (ACM). The ACM Digital Library offers subscriptions to electronic versions of its journals to its members and to library and institutional subscribers

Advertising-Supported Revenue Models: The advertising-supported business model is the one used by network television in the U.S Broadcasters provide free programming to an audience along with advertising messages. The advertising revenue is sufficient to support the operations of the network and the creation or purchase of the programs.

Disadvantages: The success of...
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