History has repeatedly shown us that the best revenue streams aren’t always obvious. As such, when we get to this part of the Business Model Canvas, some lateral thinking can pay off.
Here are a few unlikely examples that you will have seen play out:
Traditionally, musicians made money off of album sales, and the deals they made with their label. Technology removed the barriers between people sharing music with each other; CD burning, Napster, Kazaa, Limewire, iTunes, YouTube and MySpace all played their part.
One of the first artists to capitalize on this was Katy Perry, who understood the value putting her music on MySpace. The tradeoff here is that MySpace didn’t earn her much money, but it made her work instantly accessible to an enormous audience. Perry became a household name around the world, thanks in part to the viral success of her clips on YouTube.
NPR’s Planet Money podcast revealed an interesting statistic; at the height of her success in 2011, her label made US$8m from her albums after costs. For a global superstar, it’s not much.
Meanwhile, a huge tour campaign earned her US$120m that same year, of which her label received hardly anything. This was Katy Perry’s genius: Acquiring an audience shouldn’t be where you make money.
Give them the songs for free.
Once they’ve become fans, they’ll happily pay $160 to see you perform live.
I don’t like George Lucas. I do respect him for seeing an incredible revenue stream before anyone else.
Ahead of Star Wars’ release in 1977, Lucas made a deal with the film’s producers. Instead of getting paid a huge amount for being the creator/director, he would receive a portion of the toy sales, in partnership with Kenner. Up until this point, merchandise wasn’t a particularly lucrative business.
But George knew that he had Luke Skywalker.
And Han Solo.
And Darth Vader.
And Princess Leia.
An incredible collection of cast, vehicles and weapons, like nothing that had come before it. Lucas saw that these would have immense appeal, and positioned himself so that he could benefit from it.
It even influenced future film decisions; the rumour is that the Ewoks in Return of the Jedi were included purely for the toy sales.
George Lucas is now a billionaire.
Running a commercial airline isn’t a great business to be in.
High costs, variable income, sensitivity to oil prices and labour strikes all make it a costly game.
It may surprise you to learn that, in lieu of this, Qantas has an ace up their sleeves, and you probably contribute to it.
It’s their Frequent Flyer program. Despite it appearing to cost money rather than earn it, we often forget the value of information, specifically to marketers.
In exchange for your FF points on your weekly shopping, Qantas receive data on your purchases, which they then sell. It can feel creepy, but it’s a win-win. Customers earn points, Qantas make money and stay afloat, and marketers make better decisions in the future.
Similarly, Melbourne Airport’s unlikely revenue stream is their carpark, which probably makes more money that what they get from the airlines they host. In other cases, the retail spaces and food courts can also bring in the majority of revenue; a captive audience can be extremely valuable.
When it comes to revenue streams, thinking laterally pays off. Try it on your canvas, what are some creative ways of generating revenue in your industry?