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4 Standard Business Models for API Monetization

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@kelltontechKellton Tech

Kellton Tech Is a global company providing digital transformation solutions and services.

The process of generating revenue from APIs is called API monetisation.

API monetisation isn’t only about how a business generates revenue from APIs but also about how you expose the API to an audience while keeping it secure and controlling its consumption. API monetisation includes both direct and indirect payment models to drive revenue. Here are some standard business models for API monetisation.

Free

As the name suggests, there is no direct exchange of money. This is a popular way to provide access to an API as anyone can sign-up and start using the API. In this model, the consumers can test the API before they start paying for it. This model also helps drive API adoption and brand loyalty. While there is no exchange of money, it involves the cost of doing business such as advertising or supplying product information.

Facebook log-in is an excellent example of a free API. Facebook provides this API to companies to help them identify end-users. Facebook does no earn any direct revenue from this API but benefits if a consumer signs up on Facebook to use this logon on other sites. It also helps Facebook understand usage patterns to generate extra value from the log-in data gathered. However, the free model works only in conjunction with other models, such as offering paid services to businesses with higher demands.

Developer Pays

In this model, the developer pays the enterprise to use the API to gain a competitive advantage. The developer, in turn, earns downstream revenue through the use of the API. The developer pays model has several sub-models: Freemium, Pay As You Go, Tiered, Points-Based, and Transactions Fee.

1. Freemium – In this model, the basic features are free, and the premium features priced. Dropbox is a relevant example of this model.

2. Pay As You Go – This is a straightforward model in which the developer only pays for the consumed services, without any minimum guarantee or tiers. The billing in this model is done periodically, such as monthly. Amazon Web Services (AWS) is one such example.

3. Tiered – Some API providers set multiple tiered resource access for the developers to choose from, such as bronze, silver, and platinum. The developers can select their desired level and access and pay for it. In most cases, the lowest tier is free so that the developers can test the waters. The developers are billed for the chosen tier during the said period whether they use the entire amount or not.

4. Points-Based – Google Adwords is an example of a points-based monetisation model. Different APIs have different value and are assigned points. The developer has the option to either pre-buy points (tiers) or is billed by the number of points on a pay as you go basis.

5. Transaction Fee – PayPal uses a transaction fee model in which the API provider receives a fixed or percentage as a transaction fee on every transaction.

Developer Gets Paid

This is one of the most common API monetisation models based on revenue sharing. In this model, an e-commerce enterprise like Amazon or eBay makes its APIs available to the developers. When the end-user purchases on the e-commerce site, the developer receives a percentage of the revenue; Expedia earns over $2 million per year through their API leveraging this monetisation model. The developer gets paid model also has sub-models: Affiliate, Revenue Share, and Referal.

1. Affiliate – In the affiliate model, a partner leverages your content/advertisements to drive potential user traffic to you. This type of engagement has further sub-models: clicks, impressions, action/acquisition, and engagement. Examples of this model include Amozon.com and Google Adsense.

2. Revenue Share – In this model, the developer acts as an agent to help API providers sell their products or assets. The API consumer receives a fixed percentage in commission. An example of this model is car comparison portal Cars.com.

3. Referal – This model draws similarities with the affiliate model the only difference being that payment is involved only when the end-user makes a purchase. Payments may be recurring or one time. An example of this model is job placement site Monster.com.

Indirect Monetisation

Indirect monetisation takes an indirect approach to deliver value from APIs instead of generating revenue from direct methods such as API access or advertising. This model too has multiple sub-models: Content Syndication, Content Acquisition, Internal-Consumer, Internal Non-Consumer, B2B Partner, B2B Customer, and Business Expansion.

1. Content Syndication – Distribution of your content by a third-party through APIs is called content syndication. Examples of this model include Twitter and NY Times.

2. Content Acquisition – In this model, a third-party submits content through APIs to attract customers to you. Examples of this model include YouTube and Twitter.

3. Internal-Consumer – Your employees use APIs to create a customer-facing capability for your business, such as developing mobile apps or e-commerce web portals. Examples of this model include Netflix and Citibank.

4. Internal Non-Consumer – In this model, the internal use of APIs enables improved productivity, meeting regulatory requirements, and managing portals.

5. B2B Partner – Your partners use APIs to integrate your enterprise. Examples of this model include government agencies sharing information.

6. B2B Customer – Your customers use APIs to integrate your enterprise. An example of this model is Walmart.

7. Business Expansion – This model is used to expand to new geographies, demographics; and offer new products or upsell new capabilities. A relevant example of this business model is Facebook.

Closing Thoughts

We have covered almost all API monetisation business models in this blog. I hope It helps you understand the options available when deciding your API monetisation strategy.

by Kellton Tech @kelltontech. Kellton Tech Is a global company providing digital transformation solutions and services. Kellton Tech

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‘Assassin’s Creed Valhalla’ DLC will let you lay siege to Paris this summer

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When Assassin’s Creed Valhalla new expansion comes out this summer, it will allow players to relieve the Siege of Paris, Ubisoft announced at its Forward E3 event on Saturday. Historically, the 845 CE event culminated with the Vikings occupying the city and doing what they did best, plundering it for all it was worth. 

How the event will unfold in Valhalla, we’ll see, but Ubisoft promised the DLC will include new weapons, gear and abilities for players to discover. Additionally, The Siege of Paris will see the return of a fan favorite feature: black box infiltration missions. Leaning into the franchise’s sandbox roots, these will give you an objective to complete, but how you go about accomplishing it will be up to you.   

Come this fall, Ubisoft will also release a new Discovery Tour for Assassin’s Creed Valhalla. The company said the educational software will be free for all Valhalla owners. The AC team redesigned the experience to allow you to play as people from the era so that you can get an idea of what life was like in the Early Middle Ages. For the first time, Ubisoft also plans to support an AC game beyond its first year of availability. The company said it’s working on more expansions it plans to release next year.   

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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Rocksmith+ is an Ubisoft subscription service for learning guitar and bass

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Ubisoft is reviving its Rocksmith franchise with Rocksmith+, a subscription service that aims to help you learn guitar and bass. You can connect your instrument to your PC, console or mobile device and practice by playing along with master recordings of a wide variety of songs. 

Rocksmith+ works with acoustic instruments and amps as well, since you can use your phone’s microphone to pick up what you’re playing. So, you won’t need any extra gear to use it. 

You’ll get real-time feedback as you’re playing, and songs will have adaptive difficulty. You’ll be able to control playback speed, so you can slow tracks down and really get to grips with them.

Ubisoft says Rocksmith+ will have a “huge amount of songs at launch” from a variety of genres, not just rock and metal. Pop, hip hop, country, Latin and R&B tunes will be present too, as will tracks from Ubisoft games by the looks of things. 

Every song will have chord charts for rhythm players. There will be note-by-note “authentic arrangements,” if you want to learn those parts as well. You’ll be able to create your own arrangements for licensed songs through the Rocksmith Workshop.

Ubisoft didn’t reveal a release date or pricing. However, you can sign up now for a closed beta on PC.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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‘Rainbow 6: Extraction’ brings alien co-op shooting on September 16th

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As promised, Ubisoft showed off Rainbow 6: Extraction, a fresh spin on its consistently popular first-person shooter. Extraction takes the R6: Siege formula into a new co-op direction. You and up two other friends will take on missions where you have infiltrate facilities that have been taken by a alien species known as the Archaeans. Similar to Valve’s Left 4 Dead, you’ll encounter different classes of enemies that have unique abilities that will force you and your teammates to adjust your strategy. 

You’ll want to approach most encounters stealthily in part because if you lose one of your teammates, the operator they played will be unavailable until you rescue them. When Extraction comes out on September 16th, it will include support for crossplay. You’ll be able to play the game on PlayStation 4, PS5, Xbox One, Xbox Series S/X, Stadia and PC.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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Google will update Chrome OS just as quickly as its web browser

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Google isn’t just reserving speedy updates for its Chrome browser. Google is moving Chrome OS to the same four-week update schedule, starting with the M96 release in the fourth quarter of 2021. You’ll only have to wait about a month to get bug fixes and security patches for your Chromebook.

The company will skip the M95 release to bring Chrome OS and the Chrome browser in sync. You’ll also see a slower, six-month update schedule for schools and enterprise customers that should arrive by the time M96 is ready.

The move is meant to accelerate feature releases while focusing on the “key pillars” of Chrome OS, including stability, security, simplicity and speed. To some extent, it’s an acknowledgment that Chrome OS updates have become more iterative as the platform matured — the focus is now on small-but-fast tweaks rather than giant changes. Slower updates are now meant for classrooms and others more interested in solid code than the latest interface.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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