Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Monday, August 02, 2004


Business Model of the Day

KeepMedia. Revenue stream 1: $4.95/month for access to the archives of 170 magazines + papers. They will make a few bucks from niche markets, but where's the money? There are simply too many substitutes available which give consumers relatively good value (for free, no less) for the mass market to buy at significant levels. Revenue stream 2: the platform angle. The market for scalable CMS with integrated billing is already taken - and saturated.

So where's the magic? After all, the team they've lined up is fairly impressive. The angle is simple scale economies - the more suppliers they sign up, the larger their scale advantage gets, and the more attractive their archiving platform becomes to the rest of the market. Their personalization also throws in weak network externalities for consumers, which is a mild value driver. After they reach a critical mass, they will be the backend archive solution powering digital content. Don't be fooled; the aggregation play - which may sound very 1999 - is a disguise for what's actually a pretty good business model.

-- umair // 10:28 PM // 0 comments


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