Revenue Models Review

True or False? A revenue model is the same as a business plan.

• True

• False

The benefits of a subscription revenue model do not include:

• Lock-in effect: recurring basis creates brand loyalty

• Reduction of seasonal fluctuation: design of subscription can bind consumer to a period of time

• Low switching costs: affordable subscription rates can attract customers to try and compare offers

• Cash flow: more reliable and predictable revenue and costs

Which of the following is not true of the revenue model, Freemium?

• Freemium is basic product that is offered free of charge

• Upgraded versions of the product can be available for a price

• Freemium includes all features and functions for free

• Free versions have usage limitations and paid versions are unrestricted

True or false? Services revenue is the least attractive model as is essential sells time, which is easy to compete, but difficult to leverage.

• True

• False

Airbnb, Etsy and Kickstarter are all examples of which revenue model?

• Databases

• Sponsorships

• Licensing

• Creating a platform or marketplace

Which of the following businesses use the revenue model of sponsorship?

• TED talks

• PayPal

• Netflix

• eBay

True or false? Revenue streams are the same as profits.

• True

• False

Which of the following is not a commerce or retail form of revenue model?

• Selling physical goods, like Amazon

• Creating a platform or marketplace, like Etsy

• Selling digital products, like eBooks

• Services with a fixed price, like Event Cinema’s movie tickets

Which of the following is not true of promoted or sponsored content?

• Unlike ads, promoted content looks like regular users content

• This revenue model is common on social networks, like Facebook, as well as Yelp

• Users may be oblivious to sponsored content and give it higher credibility

• Sponsored content is legally allowed to be misleading or make deceptive claims

True or false? revenue streams are only important to start-up businesses as they need to demonstrate high cash flows.

• True

• False