Thread by @conniechan

1/Last month I wrote about multi-modal biz models --> how companies don't have to rely on just ads or transactions for revenue. Take Tencent for example (WeChat), ads are only ~20% revenue and they limit ads on WeChat Moments to less than 2 per user per day!

2/Look how big payments is as a percentage of Tencent's overall revenue. Also, note how much Tencent could grow its revenue if it decided to increase the # ads shown... yet they've chosen to limit ads, to build the consumer trust necessary for broader expansion.

3/China shows us it IS possible to build a big Internet business that's not 100% ad or subscription based.

In my essay, I show how content such as digital books or podcasts, are presented to end users. In every case, user experience benefits from diversified revenue streams.

4/Unpacking each example -- digital books in China are sold as if they were made for the Internet.

You can buy by the chapter, by 1,000 words, free books can earn tips, some books you only pay to unlock the ending. Readers end up reading more and authors get realtime feedback.

5/Podcasts and audio based learning doesn't have to just be ad-based.

Why not let a long-tail expert package 20 courses and sell them for say $10? Podcast creators in the States are under-monetizing their expertise because platforms today have very simple business models.

6/Video similarly doesn't have to rely on just ads (or even live-streaming stickers: a16z.com/2016/09/27/liv…)!

Why not food offers, related merchandise, event tickets, app skins. For premium content, why not let users watch the first 6 minutes before asking them to pay?

7/Online music might be the most interesting example of all -- QQ Music incorporates leaderboards, games, prizes, livestream concerts, online radio (anyone can host and make $$), event tickets, app skins, artist stories/news, music merch, even digital and physical karaoke booths.

8/China's music platforms are not solo-consumption experiences.

Can you imagine using a music app and *making* money because you had funny/entertaining commentary or a great voice? The rev share of tips from online radio hosts/karaoke is almost 70% of Tencent music's revenue!

9/Another China example is Didi car sharing adding financial services such as auto financing, loans, health insurance and wealth products; not just for drivers but for all of its users.

These apps are viewing their distribution reach with a different lens than most apps here.

10/These are just some of the many examples of multi-modal biz models working abroad. I predict more US companies will move the same direction and am particularly happy to see Buzzfeed (portco) selling physical goods through Tasty and Walmart as an example.

11/Even if ads or transactions remain the dominant source of revenue for your business, I think it's 100% worth the exercise to brainstorm what NEW sources of revenue are possible. It may just lead you to create a better user experience!

Full essay here 👇a16z.com/2018/12/07/whe…