deliverable 6.10 definition of it- iohain platform usiness ...€¦ · example: software plugins,...

This project has received funding from the Bio Based Industries Joint Undertaking under the European Union’s Horizon 2020 research and innovation programme under grant agreement No 792221

Deliverable 6.10 Definition of ICT-

BIOCHAIN Platform Business Model Strategies

Acronym: ICT-BIOCHAIN Project title: ICT-BIOCHAIN - ICT Tools in Efficient Biomass Supply Chains for

Sustainable Chemical Production Contract Nº: 792221 Start date: June 1st 2018 Duration: 24 months

Deliverable number D6.10

Deliverable title Definition of ICT-BIOCHAIN platform business model strategies

Submission due date M12 – May 2019

Actual submission date 23/05/2019

Work Package WP6

WP Lead Beneficiary SIE

Dissemination Level Public

Version 02

Authors Claire LAI (SIE)

Ref. Ares(2019)6423715 - 17/10/2019

Deliverable 6.10 Definition of ICT-BIOCHAIN Platform Business Model Strategies of 24

1. Executive Summary

The ICT-BIOCHAIN project will develop a platform prototype as the first-of-its-kind to

store and share the knowledge and information regarding regional biomass and waste

resources, potential opportunities to improve the biomass supply chain sustainability and

efficiency, the state-of-the-art of ICT, IoT, Industrial 4.0 solutions applicable to biomass

supply chain and the best practices.

This report of Definition of ICT-BIOCHAIN Platform Business Model Strategies (Task 6.5,

Deliverable 6.10) focuses on identifying the suitable archetypes of the ICT-BIOCHAIN

Platform and comparing following four potential revenue streams:

• Free use with ads: All users are provided free access to the platform. Meanwhile,

advertisers could place their ads among the contents provided by the platform

and would be charged accordingly.

• Incentivized advertising: All users are provided free access to the platform but

would be required to complete specific request or to watch ads before reaching

certain contents.

• Freemium: Contents or features are categorized into different levels and can be

accessed based on the types of user accounts either free basic account for limited

access or premium account for complete access.

• Subscription: Access to contents and/or services are charged monthly, seasonally

or yearly recurring subscription instead of one-time purchase.

Despite the fact that the development level of the platform will reach only prototype

(beta version) level during the project, it is still essential to consider the financial

sustainability of the platform in advance to cover the operation and maintenance cost of

the platform in the long term when it is further developed for fully operation after the

lifetime of the project.

Each revenue stream has its own methods to monetize the value of the platform. It is not

necessary to adopt only one of the four revenue streams mentioned above. Considering

the fact that the concept of the platform is still under structure when this report is

written, three combination of the revenue streams are proposed at the end of this report

to be chosen based on the final design of the platform.


Content

1. Executive Summary ................................................................................................... 2

2. List of Tables .............................................................................................................. 4

3. List of Figures ............................................................................................................. 4

4. Acronyms and abbreviations ..................................................................................... 4

5. Introduction ............................................................................................................... 5

6. Methodology ............................................................................................................. 5

7. Business Model Strategy............................................................................................ 7

7.1 Concept of ICT-BIOCHAIN Platform .................................................................... 7

7.2 Archetype of ICT-BIOCHAIN Platform ................................................................. 8

7.3 Sustainable Revenue Streams .......................................................................... 11

7.3.1 Potential Payers ........................................................................................ 11

7.3.2 Revenue Streams Comparison .................................................................. 11

7.3.2.1 Free Use with Ads .................................................................................. 12

7.3.2.2 Sponsorship (Incentivized Advertising) ................................................. 16

7.3.2.3 Freemium (Gated Features) .................................................................. 16

7.3.2.4 Paywalls (Subscriptions) ........................................................................ 18

7.3.2.5 Other Revenue Streams to Consider ..................................................... 19

7.4 Benchmark .................................................................................................... 19

8. Conclusion ............................................................................................................... 23

9. Reference ................................................................................................................ 24


2. List of Tables

Table 1 Archetype comparison: Subscription vs Brokerage vs Marketplace ................... 9

Table 2 Types of payers and their motivations to use the platform ............................. 11

Table 3 Fortissimo Marketplace's membership structure ............................................. 20

Table 4 ThingPark Market's partner programs .............................................................. 21

3. List of Figures

Figure 1 Business Model Archetypes Framework ........................................................... 5

Figure 2 Fundamental concept of the ICT-BIOCHAIN Platform ....................................... 7

Figure 3 Total Digital Ad Spend (€bn) in Europe ........................................................... 12

Figure 4 Share of Digital Advertising Spend by Format in Europe ................................. 12

Figure 5 Paid-for Search example of non-product search on Google ........................... 13

Figure 6 Paid-for Search example of product search on Google ................................... 14

Figure 7 Display ad spend value (left) and growth rate (right) by format ................... 14

Figure 8 Pre-roll in-stream video ads on Youtube ......................................................... 15

Figure 9 Four main events that can occur for rewarded ads ........................................ 16

Figure 10 Statista's pricing scheme ............................................................................... 17

Figure 11 Example of HelgiLibrary's data search result and purchase options ............. 19

4. Acronyms and abbreviations

CPA Cost per acquisition/action

CPM Cost per mille

CPCV Cost per complete view

CPV Cost per view

ICT Information and Communication Technologies

IoT Internet of Things

PPC Pay per click

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5. Introduction

The ICT-BIOCHAIN Platform is expected to serve as the first-of-its-kind platform, in the

biomass supply chain context, to store and share the information including regional

biomass and waste resources, the potential sustainability and efficiency improvement to

be made, and the state of the art of Information and Communication Technologies (ICT),

Internet of Things (IoT) and Industry 4.0 solutions.

The objective of the platform development within the scope of the ICT-BIOCHAIN project

is to provide a prototype (beta version), which will be tested and ready for further

development to reach industrial operation level after the lifetime of the project.

For the long-term sustainability of the platform once it is ready, it is critical to have a

business model strategy to support the platform’s operation. Hence, the purpose of this

report is to identify the most profitable and sustainable revenue streams to cover all the

costs related to the platform operation and maintenance.

6. Methodology

Business Model Archetypes framework (Neal Cabage, 2019) was designed to help

companies to structure their business, identify the opportunities in the competitive

market landscape, and further define the business strategy. In the framework, the

fundamental elements of every business interests and activities, including trade, product,

and services are examined, and 7 archetypes have been identified to describe different

categories of business (shown in Figure 1).

Figure 1 Business Model Archetypes Framework (Neal Cabage, 2019)


The 7 archetypes can be further categorized into primary and secondary, among which

the focus of the business and methods of monetization differ.

Primary

Product Focus on the development of tangible product that can be bought and sold for a one-time cost. Generally, the product provides personal entertainment or offers gain of efficiency with lower cost. ▪ Example: Software plugins, mobile apps, eBooks, etc. ▪ Monetization: Sale of product.

Service Provide services or intangible solutions for customers and clients provided by skilled professionals. ▪ Example: Customization of a platform solution. ▪ Monetization: Time the service company spends for the

customers and the materials.

Trade Connect the buyers and sellers. The traders source products, qualify and prepare the products, and make it readily available to the customers. ▪ Example: eCommerce retailers and lead generation. ▪ Monetization: Product arbitrage to sell the products higher

than the purchase cost.

Secondary

Brokerage Combine the primary archetypes of Trade and Service by trading on behalf of clients as a service. ▪ Example: Dropshipping program in which the retails purchase

from third parties and have it shipped directly to the customers when customers order products. No inventory is stocked at the retailers’ sites.

▪ Monetization: Base fee plus commission charge for the transactions

Subscription Mix of primary archetypes of Product and Service. This model provides customers with access to the product or service for a period in the meanwhile the company continues to update, improve, and support the product or service usage. ▪ Example: Software as service and content as service.


▪ Monetization: Time and material.

Marketplace Combines the primary Trade and Product archetypes to connect the buyers and sellers for trade through a self-service method, meaning the marketplace serves as a platform to match the demand and supply. ▪ Example: Amazon, eBay. ▪ Monetization: Commission per sale.

Ecosystem The most ideal archetype which combines all three primary ones – Product, Service, and Trade. ▪ Example: Salesforce CRM, Microsoft, etc. ▪ Monetization: Subscription fee.

7. Business Model Strategy

7.1 Concept of ICT-BIOCHAIN Platform

The concept of the ICT-BIOCHAIN Platform (as shown in Figure 2) is to serve as a place to

store and share information as well as merge the users and ICT solution providers.

Figure 2 Fundamental concept of the ICT-BIOCHAIN Platform


The contents on the platform can be categorized into two types:

1) Biomass supply chain:

a. Partial region-specific data models of biomass and waste resources

availability1 and the public data published by the Statistical Institutes

of the Region, the National Institute, or included in published scientific

articles.

b. The potential opportunity areas to improve supply chain efficiency and

sustainability.

2) ICT, IoT, Industry 4.0 in biomass context: Current state-of-the-art of the ICT,

IoT, and Industry 4.0 technologies, the promising solutions that have been

primarily screened by the platform operator, and the best practices for the

users to share their successful stories using the technology to improve their

business. Further functionality could also include training for users, user’s

reviews and rating of the ICT solution providers.

Under the platform concept framework, potential groups of people who may be involved

in the usage include the end users and the ICT solution providers. On one side, the end

users could be any biomass supply chain stakeholder in the European area or anywhere

in the world who is interested in searching, learning, updating or creating any information

of ICT technology information in the biomass context. Potential users identified in the

Grant Agreement include green investors from either public or private sectors who would

like to invest on green-based initiatives or product, biomass suppliers or farmers who

would like to enhance their knowledge of how to use advanced technology to improve

their production efficiency and sustainability or diversify their incomes, or any citizens

who are interested in this domain. On the other side, the platform offers ICT, IoT, Industry

4.0 solution providers a place to propose their products and services. To avoid unsolicited

advertising, no company can simply demand and post information. Instead, the platform

operator will carefully evaluate the company request and introduce the technologies and

relevant information such as the technology readiness level fitting in the scope via the

platform to the end users.

7.2 Archetype of ICT-BIOCHAIN Platform

According to the Business Model Archetypes Framework, each archetype has its own suitable monetization methods based on the essence of the business and the interrelationship between the elements trade, product, and service.

1 Regarding the biomass data collected by the task 1.4 in the ICT-BIOCHAIN project, some of the data will be provided directly by experts in the field while some of them may not be revealed to the public due to business trade secret issue.


Hence, the first step here is to identify the suitable business model archetype that fits the ICT-BIOCHAIN Platform before starting to evaluate the possible revenue streams. After careful examination, the archetypes that can best describe the way that the ICT-BIOCHAIN Platform is expected to operate are Brokerage, Subscription, and Marketplace. For deeper assessment of which archetype fits the ICT-BIOCHAIN Platform better, the elements in the archetype including trade, product, and services are further analyzed and compared. In ICT-BIOCHAIN Platform, the information provided could be considered as two potential service offering. The first service offering is content/database as service in which the content refers to the information regarding biomass supply chain and state-of-the art of ICT, IoT and Industry 4.0 in biomass context.

- Product or Service: As mentioned, the service would be the contents and the data gathered during the projects provided on the platform. In the future, the platform may potentially expand its geographical coverage and include other regional data under the same context.

- Trade: In this case, the trade would be the end users pay or give something valuable in exchange for the access to the contents or data.

The second service offering is that the platform acts as the bridge to introduce promising technology solution providers to the stakeholders of biomass supply chain.

- Product or Service: This depends on the offerings of the solution providers. - Trade: The trade in this case would be if any end user (stakeholders) identifies any

ICT solution provider and makes agreements to purchase their services or products provided by the ICT solution provider via the platform.

Table 1 Archetype comparison: Subscription vs Brokerage vs Marketplace

Archetype

Trade

Product/Service

Subscription

ICT-BIOCHAIN Platform can provide end users access to the contents in the meanwhile continuing to update, improve, and support the usage.

The information provided can be considered as content service.

Brokerage

The business in brokerage archetype is supposed to trade on behalf of clients as a service, which is not the

Solutions could be traded as products: sensors, radio frequency


case for ICT-BIOCHAIN Platform.

identification, wearables, additive manufacturing equipment, robotics, etc.

Marketplace

The ICT-BIOCHAIN Platform fits the trade mode by connecting the end users as buyers and solution providers as sellers via a self-search functionality empowered by the platform. The platform helps to match the demand and supply.

Solutions could be offered as services: analytics and machine learning, interactive platform to process and visualize data in real time, blockchain application to identify and trace goods, etc.

The first offering well matches the subscription archetype; as for the second offering, the manner of the ICT-BIOCHAIN Platform to facilitate the trade between end users and the ICT solution providers is closer to the Marketplace archetype. The platform serves as a virtual place to merge many end users as buyers and many solution providers as sellers. The end users can use the search function of the platform with certain relevant filters, such as geography and technology type, to seek for the relevant solution providers for their needs. The platform holds a neutral position and will not proactively act as a middleman on behalf of any specific ICT solution providers. The offering by the ICT solution providers can be either product, or service, or combination of both, depending on their business strategy, capacity, and positioning in the competitive landscape. Solutions that could be traded as products are technologies like sensors and wearables that can collect various types of data for further analysis purposes, additive manufacturing to join materials to make objects from 3D model data, or robotics to automate monotonous and sometimes physical demanding tasks. Meanwhile, many solutions are offered as services, such as platform and software to process and visualize data and support decision making in real time, or machine learning to analyze the data of equipment operation for predictive maintenance. In summary, the ICT-BIOCHAIN Platform well fits the Subscription, Marketplace archetype and partially the Brokerage archetype considering the method to manage the trade and the essence of the offerings. The corresponding archetype of the platform shall remain the same if in the future the platform is further spread to other regions, include additional regional data, and provide the services through same manners. Thus, the revenue streams discussed in the following section will still be relevant.


7.3 Sustainable Revenue Streams

7.3.1 Potential Payers

Based on the platform concept framework discussed in section 7.1, the first two potential

payers where the platform can generate revenue from would be the end users and the

ICT solution providers as the main groups of people involved in the platform usage.

Moreover, advertisers play an important role as the revenue sources for any online

website or platform.

Table 2 Types of payers and their motivations to use the platform

Type of Payers Motivations to Use the Platform Expected Value to Get

Biomass

Stakeholders as End Users

Green Investors

Search for green investment opportunity such as companies which do research or manufacture products like renewable fuels (Investopedia, 2018c).

Biomass Supply Chain Actors

- Provide input or search for information regarding regional biomass and waste resources.

- Expand network and options of cooperative partners, suppliers, or clients.

- Enhance knowledge of state-of-the-art of the ICT, IoT, Industry 4.0 technology and solution providers to improve own operations.

- Benchmark with industrial best practices. Biomass users

Search for biomass feedstock as raw materials for their business.

Citizens Enhance general knowledge regarding biomass and/or how to apply ICT, IoT, Industry 4.0 technology to biomass supply chain.

Governments Track regional biomass sector development.

ICT Solution Providers

- Reach wider range of potential clients. - Increase company visibility. - Monitor competitive landscape and competitors.

Advertisers - Enhance brand awareness, recognition, to consumer preference.

- Promote or sell product/service, introduce new offerings, marketing upcoming events.

- Enhance brand image in relevant sector.

7.3.2 Revenue Streams Comparison

Four revenue streams (A) Free use but with ads, (B) Sponsorship (incentivized

advertising), (C) Freemium (gated features) and (D) Paywalls (subscriptions) which were

identified and stated in the Grant Agreements will be analyzed and compared in this


section. Some examples of possible execution are also

provided for references. Yet, the final execution should not be limited to the examples

mentioned here.

7.3.2.1 Free Use with Ads

Along with the growing population having access to the internet, digital advertising has significantly increased the importance compared to traditional TV advertising or printed ads over the decades. It has reached €48 billion in 2017, almost 7 times larger than the size in 2006, establishing its place as the dominant advertising media in Europe. Among which, the Display and Paid-for Search are the two main formats of advertising, accounting for 40,3% and 45,7% of the total digital advertising spend at the expense of Classifieds & Directories2. (IAB Europe & IHS Markit, 2017).

Figure 3 Total Digital Ad Spend (€bn) in Europe (IAB Europe & IHS Markit, 2017)

Figure 4 Share of Digital Advertising Spend by Format in Europe (IAB Europe & IHS Markit, 2017)

2 Classifieds & Directories are the online lists or catalogs of websites providing information of individuals or organizations alphabetically or thematically with details such as names, contact information, website link, etc.

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Paid-for Search

Paid-for Search advertising, also known as search engine marketing or sponsored listings, has gained popularity as part of the digital marketing campaign for many businesses and been proven to be an efficient marketing technique because the ads will show to the potential customers in the relevant context. Companies can place their ads in the search results if the keywords that users use for the search query via the search engine match the keywords that companies have chosen. The format of the ads could be text-based advertisements for non-product search (as shown in Figure 5) or visual carousel with images and few texts of relevant information for products (as shown in Figure 6). The ads may show on top, bottom or on the side of the search engine results page, but the mechanisms to decide the positions and ranks may vary among different search engines. The methodology used by Google to decide the position of the advertisements evaluate five key factors, including the maximum amount that the company is willing to pay for a click on the ads, the quality of the ads and the landing page, minimum thresholds regarding the ads, context of the user’s search, and other complementary information shown together with the ads (Google, 2019a). The most common pricing scheme is pay-per-click (PPC), or known as cost per click, which requires advertisers to pay a fee each time that a search engine user clicks on the ads. Higher amount of the traffic using the search engine, higher amount of the bid that the advertisers will be willing to pay for the ads. Other types of pricing model are CPM, meaning cost per mille that the advertisers have to pay certain amount of fee for each 1000 impressions of their ads, or the CPA as cost per action or acquisition in which the advertisers only need to pay when the users click the ad link to visit the website and make a transaction afterward (Investopedia, 2018a).

Figure 5 Paid-for Search example of non-product search on Google


Figure 6 Paid-for Search example of product search on Google

Display

Display ads can be further categorized into video and non-video types which account for almost €20 billion ads spending in 2017. Despite the fact that video ads were worth only €5,3 billion compared to €14 billion from the non-video ads, yet its growth from 2016 to 2017 is nearly four times higher than the rest of the display ads.

Figure 7 Display ad spend value (left) and growth rate (right) by format (IAB Europe & IHS Markit, 2017)

Out-stream video has overtaken in-stream as the dominant video format in 2017 thanks to its skyrocket growth from €1,6 billion in 2016 to €3,1 billion in 2017, with growth rate at 73,4% (IAB Europe & IHS Markit, 2017). Out-stream video ads generally apply to non-video environments in which the videos start to autoplay whenever the users scroll down

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the page and make them within the viewing range of the screen. The videos would remain playing as long as the users keep the videos in the viewing range of the screen, pause once the users scroll away, and then continue to play from where the videos have been stopped again when the users scroll back. Its superb advantage is that there is not limitation on the placements. It can appear anywhere on the web page. On the other hand, in-stream videos are limited to the placements within existing videos either to be pre-roll, mid-roll, or post roll. The video ads appear in the existing videos that users plan to watch or are already watching. The pricing scheme CPM is also used by certain ads publishers for video ads as well. Nevertheless, several new pricing models have been created considering that video ads require users to spend longer time to watch the ads. For instance, cost-per-view (CPV), or cost per complete view (CPCV) is another pricing scheme proposed by both Facebook and Google that advertisers will only pay for the video ads if users have watched the video ads more than certain time period, which could be 10 or 30 seconds, or complete videos depending on the pricing policy of the advertisers (Facebook, 2019)(Google, 2019b). Other non-video display ads can be banners showing on the strategic place on the web page, pop-up ads jumping out on top of the window when users open a website or a new web page, or pop-under ads opening a new window but behind the one that users are currently viewing. Non-video display ads are charged by CPM. Though those are still common advertisement practices for advertisers, but they have been suffered from various issues. In the late 1990, study has noticed the issue of banner blindness, the phenomenon of users consciously or subconsciously ignoring web banner ads when heatmap studies tracking their eye movement over a given area on the web page. As for pop-up ads, it has been widely considered as an intrusive marketing tools which bring negative experiences.

What can ICT-BIOCHAIN Platform do?

If adopting this revenue stream, ICT-BIOCHAIN Platform could firstly consider allowing advertisers to implant their display ads, videos or non-videos, in the article or content pages. Display ads offer advertisers higher flexibilities in terms of style and format, and wider reach to platform users in that ads could be placed anywhere during user’s usage journey. This can potentially create higher visibility of the ads even in the early stage when the platform tries to increase its user base. Therefore, it is considered relatively easy to generate revenues at the beginning. Later on, the platform can further provide the paid-

Figure 8 Pre-roll in-stream video ads on Youtube


for search ads allowing solution providers to advertise their companies, services or products along with the results of a search performed with relevant keywords.

7.3.2.2 Sponsorship (Incentivized Advertising)

To solve the common issues that people nowadays can easily ignore the ads or avoid ads via ad-blocking software, incentivized advertising, or known as rewarded advertising, is designed to reward the viewers something they value in return for watching the ads or accomplishing certain engagement actions assigned by the advertisers (Mike Shields, 2016). Incentivized ads are highly popular for mobile game apps where users are rewarded with some game bonuses, extra lives, or additional tools to play the game for watching a short video ad. Music or video platforms, such as Spotify, encourage users to watch video ads in order to get ad-free usage experience for certain time period. Other example is that some online publications may ask users to watch video ads as paywalls to continue their access to the contents they would like to read or watch.

Figure 9 Four main events that can occur for rewarded ads (Google, 2019c)

The pricing scheme can be CPM, CPV, CPCV, or cost per install (CPI) if the objective of the video ad advertiser is to invite viewers to install an application, game or software.


For instance, ICT-BIOCHAIN Platform could require the end users to watch an ad before continuing their access to the contents they would like to read.

7.3.2.3 Freemium (Gated Features)

Freemium combines the words “free” and “premium” to describe the business model that offers both free and premium services (Investopedia, 2018b). Basic services or product features with limited capabilities are offered for the users to try, while the advanced or premium features can only be accessed at a premium price. This model has been used by many software companies, games, or various internet services providers. The premium offerings can be quantity limitation in terms of volume, time, or data release for time-sensitive data, or in terms of features, distribution and use


cases (Pujol, 2010). Take Statista and LinkedIn for instance. Statista provides three types of accounts with different access to its statistic data, data format options, and data analysis features. Users with basic account can only have simple statistics, while users with premium account can have access to much more datasets, detailed source references, and have different format options for download, and corporate account users have the full access. LinkedIn, as the job marketplace to match demand (human resource recruitments for corporates) and supply (job hunting for the applicants), provide different premium programs for demand and supply side users according to their own needs.

Figure 10 Statista's pricing scheme (Statista, 2019)

The pricing schemes are usually set by the amount of the services or functionalities offered and also the period of time like monthly or annually. Often, free trial of the premium program for limited time can be proposed to the users in order to hook the users and transform them into paying customers after the trial session.


ICT-BIOCHAIN Platform can categorize the data and contents into different valuable levels

and provide access to end users according to the type of account they may hold. Another

example is to provide some advanced features, such as message functions with other end

users who have left a review regarding an ICT, IoT, Industrial 4.0 solution provider,

contact with solution providers, and product information. A trial period for the premium

account could be considered.


7.3.2.4 Paywalls (Subscriptions)

Paywalls or subscription business model sells the contents, products or services to receive monthly, seasonally or yearly recurring subscription revenue from the customers instead of one-time purchase (Evan Tarver, 2018). It can be overlapped with the freemium models to ask the customers to subscribe the premium accounts. The easiest example to understand how it works could be magazines. Instead of selling magazine once per month, the magazine publishers offer options to subscribe the magazines annually, which guarantee the publisher expected revenue for the following 12 months and the users are charged automatically every month or sometimes pay all in once at the beginning. According to a study (Wang, Zhang, Ye, & Nguyen, 2005), the primary factors to convince consumers to subscribe fee-based online contents or services are convenience, essentiality and usage frequency. The convenience of the online subscribed contents prevents the customers from time-consuming and potentially unproductive search for similar contents elsewhere for free. The value proposition of essentiality offers customers the important contents which are highly difficult to get by themselves elsewhere. The usage frequency factor suggests that the customers are more willing to pay for the access to the online contents, services or products if they have the need to access it frequently. Other factors to be considered include added value, perceived service quality, perceived fairness and security concerns. The key pricing principle is that the fee of subscription is lower than the one-time purchase to encourage the users for longer transaction commitment. Different subscription pricing models have been created (Harmon, Raffo, & Faulk, 2005):

- Flat pricing: Users pay a fixed monthly or annual fee for unlimited access to the contents or software. The access is provided to particular user and/or machine.

- User-based pricing: The charge is based on the number of the total users that have the access to the contents or software for a given period of time.

- Usage-based pricing: Also known as “pay-as-you-go”, users pay for what they actually use.

- Tiered pricing: Customers are segmented into different tiers by their needs and willingness to pay. The charge increases along with the level of the requirements from the customers.


ICT-BIOCHAIN Platform could require end users to pay if they want to access to specific data such as the professional marketing reports or non-open access publishing articles.


7.3.2.5 Other Revenue Streams to Consider

Depending on the design of the final ICT-BIOCHAIN Platform’s functionalities3 to facilitate the transaction between the end use and the ICT, IoT, and Industrial 4.0 solution providers, other revenue stream such as transactional income could be considered as well. Transactional income can be fixed fees per transaction, referral fees, fixed or variable sales commissions, and mark-up on direct sales of goods, etc. (Zhseng, 2006).

7.4 Benchmark

Though ICT-BIOCHAIN Platform is the first-of-its-kind platform for biomass sector, there are some platforms or marketplaces serving similar roles for other industries. Noteworthily, it is rare to find a single platform which provides sectorial data and brokers stakeholders with solution providers at the same time. Hence, in this section, few platforms utilizing data to generate revenues and technology marketplace have been analyzed to see their revenue streams to provide benchmark references for ICT-BIOCHAIN Platform. HelgiLibrary Several platforms generating revenues with the data (without analysis insights) go for the subscription model, such as Statista and Statistic Brain. Helgi Library also adopts subscription model as its competitors, from USD199 per month as starting point to USD399 per month for unlimited access to all the hidden data and reports. In addition, it also offers an alternative option for one-time purchase for specific data. As shown in the Figure 11, clients without long-term subscription are also allowed to pay $9,99 to purchase the data searched from the database. The price for one-time purchase may vary according to the value of the data defined by the platform.

Figure 11 Example of HelgiLibrary's data search result and purchase options (HelgiLibrary, 2019)

3 The platform concept will be finalized at month 18, while this report is due at month 12. Hence, certain functionalities are still under structuring and conceptualizing while this report is written.


Fortissimo Marketplace The Fortissimo Marketplace is developed by another European projects on DiH and have been presented during the sixth meeting of the Working Group on Digital Innovation Hubs on April 3rd, 2019. Though the sector or the technology solution focus may not be the same, but the role as broker to present innovative technology solutions to improve potential platform users’ business operation is similar to the second service offering that ICT-BIOCHAIN Platform plans to offer. The Fortissimo Marketplace brokers advanced simulation, modelling & data analytics to users (clients) to solve their business challenges and improve competitiveness. The offerings include products or services as solutions and knowledge data base. Two types of memberships are proposed to vendors to advertise or integrate their services onto the Marketplace: Gold and Platinum membership (Table 3). Their revenue stream strategy is mixed of tiered pricing subscription and transactional income. Vendors can choose the membership according to their needs of the functionalities. In addition to the annual membership fee, for the Platinum members, 15% of commission fee will be charged per sale by the Fortissimo Marketplace as well (Fortissimo, 2019). Table 3 Fortissimo Marketplace's membership structure

Functionality Gold Platinum

Advertising Inclusion in Capability Register

V V

Resource Library Best Practice Guide V V

Support Helpdesk V V

Marketplace Consultancy Support

V

User Management

Resource usage monitoring V

Accounting V

Helpdesk V

Service Purchase User buys service directly V

Billing and Payments handled by MKP

V

Service Front-end Development and Hosting

Front-end Development V

Front-end Hosting V

Document Templates

Service Legal Agreements V

Member-member Agreement

V

After-sales Support Customer satisfaction survey V

Fee (subject to VAT)

€1000 annual Membership Fee

€1000 annual Membership Fee


+15% commission on sales

Actility The ThingPark Market developed by Actility is an online B2B marketplace to offer wide selection of high quality low power wide area IoT products provided by solution providers worldwide. This B2B e-commerce marketplace allows all kinds of IoT solution provides such as manufacturer, distributor, or connectivity providers to promote and monetize their products or services to all potential users looking for IoT solutions. Three types of partner programs are proposed to the vendors and service providers (Actility, 2019). Table 4 ThingPark Market's partner programs

Partner Silver Partner Gold Partner Platinum

Cost €390 €1490 €2490

Common benefits

in all program

• Brand & product exposure in ThingPark Wireless and Enterprise

• Product profile & devise decoder integration which simplify setup and ease of use

• Right to use Actility & Thinkpark connected logo

Different level

benefits

• Web Partner listing

• Integration on ThingPark Market

• Unlimited number of ThingPark Connected products

• Eligibility to FOTA and activation service for secure device manufacturing

• Extension to 1 gateway and 15 devices on the developer portal

• Silver benefits+

• Social media blogging

• Newsletter to service provider & distribution channels

• Co-branded collaterals (flyers)

• Joined demo & exposure during IoT events

• 2 hours of technical support with Actility experts

• Extension to 3 gateways & 25 devices on ThingPark Developer Portal

• Gold benefits+

• Co-branded datasheets

• Co-webinar

• Development of joint success stories

• Eligibility to be hosted on Actility booth at Mobile World Congress

• Eligibility to use Actility meeting room at Mobile World Congress

• Access to 5 hours of technical support with Actility experts

• Access to ThinkPark roadmap and new features

• Access to 1 radio planning and


network sizing activities

• Extension to 5 gateways and 50 devices on ThingPark developer portal


8. Conclusion

With the two service offerings, contents/database and role as bridge between end users and solution providers, ICT-BIOCHAIN Platform should be categorized into the Subscription and Marketplace archetypes. These two service offerings enable the platform to adopt different possible revenue streams to cover its operation and maintenance costs. The four revenue streams focused in this report include free use with ads, incentivized advertising, freemium and subscription. Other monetization method, such as commission, can be considered as well. Each revenue stream has its own scheme to monetize the value of the platform. It is not necessary to adopt only one of the revenue streams. Combining multiple revenue streams to diversify the sources is also possible depending on the final service offerings and the willingness to pay of the end users, solution providers as well as the advertisers. In the case of the ICT-BIOCHAIN Platform, following revenue combinations can be considered: Options 1: Simply Provide Free Use with Ads Providing free access to anyone who might be interested in using the platform is the quickest way to increase the user pool which is especially important for a platform needing to reach sizable users to create the network effects. More end users will attract more solution providers to offer their products and/or services via the platform. And vice versa. The value of the platform rises along with the number of the users. Meanwhile, the higher the traffic of the users, the better the interests of the advertisers to post their ads on the platform.

Options 2: Free Use with Ads + Commission As mentioned above, in addition to the free access to the contents and/or data, if the final functionality of the platform can assist in matching end users with the proper solution providers and facilitating the transaction or contract preparation, then the platform can generate profits from charging commissions to either solution providers or the end users, or even both. Option 3: Option 1 or 2 + Freemium + Subscription Free use with ads can be the offer for the free account users, but the access to the contents and/or data, features, or services have to be limited in some way in order to differentiate from the premium accounts with certain advanced offerings. Free account options can act as advertising for the premium account options, as a teaser to attract sizable users and expect to switch them to pay users. Yet, it is important that the contents or data will be continuously updated and improved and there are certain users that are willing to pay premium prices for it.


9. Reference

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