Arrow icon
Ness Labs: Make the most of your mind
Learn more about Joggo

A Summary of

Six Ways New Social Companies Will Monetize

by
Anne Lee Skates
a16z
View original

While the traditional ad model has worked well for social platforms in the past, new entrants have found new ways to monetize beyond targeted ads.

VIP Membership Subscriptions for personalized content

  • Two ways this can be done:
    • Subscriptions to the platform or to a specific creator
  • A subscription allows users to select different things based on their level of engagement
  • Reduce reliance on brand sponsors and increase the authenticity of creators
  • The drawback is the content reaches fewer people

Commerce: Platforms that help creators sell their product

  • Pinterest pioneered this field, but TikTok and Instagram are now moving into the ‘space’ as well
  • Incentives for both fields align when the creator is seen as an expert in the field the product is coming from

Virtual live experiences

  • Typically one-time purchases that are to a specific live event
    • The PPV model of boxing
  • A relatively new medium that has been accelerated by COVID-19

Internet-based paid communities

  • These companies allow users to interact with people who have shared interests
    • Can be done for fitness, mental health, career guidance, etc.
  • Platforms act as matchmakers and users are the community that people seek in that specific field

Digital goods and in-app purchases

  • Popular in China and in video games
  • Among Us, a popular game, uses these to personalize a character despite the game being free
  • Beyond gaming, there has been little adoption in the US

Tipping, donations, and microtransactions

  • Livestream tipping has become a $10 billion industry in China
  • Twitch uses this in the US for videogame streamers
  • The downfall to this is that the tipping can be an inconsistent stream of revenue
Related content
See all posts
Arrow icon