Digital Business Theory 2022

DIGITAL BUSINESS
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Table of Contents
REVENUE Model Identification.......................................................................................... 3
1.1 Advertising Revenue Model...................................................................................3
1.2 Subscription revenue Model...................................................................................3
1.3 Transaction Fee Revenue Model.............................................................................. 4
1.4 Sales Revenue Model........................................................................................... 4
1.5 Affiliate Revenue Model....................................................................................... 5
References..................................................................................................................... 6

REVENUE Model Identification
1.1 Advertising Revenue Model
This model mainly focuses on the sale of advertisement as a source of revenue for the business.
Example of the digital business that uses this model is Twitter. It is a social networking site that
has more active users than any other online platform. The advertising is the mode through which
this organization is increasing its revenues. The company generates about 85% of its revenue
through advertising sales. The individual or company can advertise on twitter through promoting
the tweet, which will be available on the timeline of people and hence it boosts its awareness
among them. Moreover, the individual and business can post the ad by promoting from its
account (Zott & Amit, 2017). With the help of Twitter, there are business and individuals that
are gaining popularity all over the world.
Twitter provides the people and company to add photos and videos for their advertisement in
order to provide information regarding their content and business to the target audience. Twitter
charges the advertisers based on tweet generated. Around 65% of Twitter’s advertising revenue
comes from mobile devices. This digital business helps the companies and individuals to reach to
a large number of people in order to share their thoughts and make a connection for the future
(Laudon & Traver, 2016). The advertising revenue model is beneficial for twitter as it helped in
increasing profitability and attracts a more audience to promote their business. The Advertisers
are charged based on the number of communication tweets made also there are required to pay
on per click. This model offers the users with a platform to have free access to the content and
attract more revenue towards the business.
1.2 Subscription revenue Model
This model is used by those companies that charge their customer with the recurring fee for
using or accessing the content or any product or services. The firm charges its customer with
monthly or yearly fees in order to increase its revenue sources. For example, Spotify which
provide media services to its customers. It provides the customers with Freemium services
through which they charge its customers with a monthly or yearly membership for accessing the
music videos. The company provides customers with improved streaming quality that are