Understanding Revenue Models For Creative Businesses

Note to Mentors

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Unit Purpose and Aims

The purpose of this unit is to;

In this unit the learner will explore different revenue models with specific relation to the creative industries. They will also be asked to explain, describe and identify key features of different models and be able to produce a ‘dummy’ model for a given company.

Learning Outcomes

Learners will;

1. Understand different revenue models within an advertising and creative business context.

Learners can;

1.1 Describe different revenue models

1.2 Explain the differences between a business model and a revenue model.

1.3 Research businesses that use different revenue models

1.4 Identify what type of revenue models are used by different commercial sectors

1.5 Describe how a given business might increase revenue by a change or modification of model.

2. Produce a revenue model for a business idea

2.1 Identify the appropriate revenue model for a business idea form a number of different models.

2.2 Produce revenue forecast for a 12 month period.

Learning Tools, Resources & Links

Things that will help the learner develop understanding of this unit;

Mentors – please add your ideas, examples, case studies, links to articles, videos, etc. here.

The Business Model Canvas

The Business Model Generation Canvas makes it simple and easy for you to quickly understand a business. How does it make money? Who is it targeting? Why is it adding value?

The Business Model Canvas is a strategic management tool, which allows us to develop and sketch out new or existing business models. It is a visual template pre-formatted with the nine blocks of a business model.

With this business model design template, an enterprise can easily describe their business model

• Infrastructure
  • Key Activities: The activities necessary to execute a company’s business model.
  • Key Resources: The resources that are necessary to create value for the customer.
  • Partner Network: The business alliances which complement other aspects of the business model.
• Offering
  • Value Proposition: The products and services a business offers. Quoting Osterwalder (2004), a value proposition “is an overall view of .. products and services that together represent value for a specific customer segment. It describes the way a firm differentiates itself from its competitors and is the reason why customers buy from a certain firm and not from another.”
• Customers
  • Customer Segments: The target audience for a business’ products and services.
  • Channels: The means by which a company delivers products and services to customers. This includes the company’s marketing and distribution strategy.
  • Customer Relationship: The links a company establishes between itself and its different customer segments. The process of managing customer relationships is referred to ascustomer relationship management.
• Finances
  • Cost Structure: The monetary consequences of the means employed in the business model. A company’s DOC.
  • Revenue Streams: The way a company makes money through a variety of revenue flows. A company’s income.

http://www.slideshare.net/Alex.Osterwalder/business-model-canvas-poster

10 Business Models that rocked 2010

Following on from the Business Model Canvas, here is some interesting/creative revenue models from 2010.

http://www.slideshare.net/boardofinnovation/10-business-models-that-rocked-2010-6434921