Today in class we discussed the topic of revenue models.  As a non-business major, I initially thought that I knew nothing about business revenue models, but then I realized that I might not be familiar with the selling aspect of business, but I am a well-seasoned consumer.  I’ve bought plenty of things and like to think that I’m at least a little bit savvy with my limited college student funds and balancing necessities from pleasure.  And then I started thinking about what I spent most of my money on.

And I thanked whatever non-denominational deity because my parents pay for family plans.

Web-based entertainment is mostly made up of revenue models of either subscriptions or freemium, that is, there are two versions of the site or service:  One that is free but has advertisements and less exclusive features, and the paid, ad-free, exclusive content site.

Again, I’m going to use my own over-use of the internet to illustrate:

  • Netflix
  • Amazon Prime
  • Hulu
  • HBO
  • YouTube
  • Rooster Teeth

These are the sites I use the most to access my online entertainment.  Netflix and Hulu are shared subscriptions with my family, so I actually luck out there and don’t usually have to pay for it (yet).  HBO is included in the cable package that my family has back home, so I can access it from my computer, which is also fortunate for me.  Amazon Prime has a great deal for students which cuts the subscription price in half for as long as you’re still enrolled in college.  YouTube is free, but with ads, and two years ago they launched YouTube Red, which offers exclusive content like shows and movies that are only available for paying members of the site.  I’ve been on YouTube since it was an infant in 2005, and I honestly don’t want to pay for something I use to see people who put out content for free.  I spend most of my limited free time on the Rooster Teeth Productions website, a digital media production company with a focus on their community.

Of all these, four are subscription based only.  Netflix ($9.99/mo), Amazon Prime ($50/yr: Student price), Hulu ($7.99/mo with commercials), HBO (free with cable, but HBO Now is offered for $14.99/mo).  Up until 2016, Hulu offered a free tier of their site, but killed it to make it exclusively subscription-based.  They now offer a platform that is $7.99/mo with ads, or $11.99/mo without ads.  You can read more about the revenue switch here.

Rooster Teeth creates so much original content in a week that it’s impossible to keep up with it all if you are a normal human with anything that resembles a life, but that also means that you get a lot of options.   They offer a free version of their site that allows you to interact with the community and watch content.  Then there is a second tier which is called a First Membership.  That’s what I am.  There are different choices for billing, but I chose the one that is a recurring $19.99/6 mo.  For that, I get access to content a day earlier, access to exclusive content, a 5% discount in the store whenever I shop, and a sweet little star next to my name on the website that shows I pay money to support the people I watch.  Also, who doesn’t like feeling special?  There’s also a third tier of membership that gives all the perks of the second tier, 10% off in the online store, and a monthly box of exclusive merch sent to you.  Of course, this is more pricey, but you get more bang for your buck.

I’m glad I’m a more informed consumer and everything, but please excuse me while I go breathe into a bag after looking at those numbers for a while.


One thought on “The Best Things in Life are Free(mium)

  1. “Netflix ($9.99/mo), Amazon Prime ($50/yr: Student price), Hulu ($7.99/mo with commercials), HBO (free with cable, but HBO Now is offered for $14.99/mo).”

    Looking at your statement, reminds me of the psychological pricing strategies that we discussed in class. Frankly speaking, they make everything seem less and affordable. You just think that Netflix, will be fine with all they have to offer, and you go on adding more and more which also have prices that look very cheap. At the end of the year, when you calculate, you find yourself with a lot of expenses when you haven’t even used the full advantage of each. For example, you can’t watch Hulu and Netflix at the same time, while you watch one, there is one waiting,…

    Anyway, as a consumer, you also look for ways to go for cheap such as not paying for youtube when you know the contents are free.

    Great post!

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