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FREE AS A BUSINESS MODEL Advertising: A Multi-Sided

Platform Model

92

PATTERNS Advertising is a well-established revenue source to and from work. Competitors using the same
that enables free offers. We recognize it on
model soon followed, but <Tca^ kept them at
television, radio, the Web, and in one of its most bay with a couple of smart moves. For example,
sophisticated forms, in targeted Google ads. it controlled many of the news racks at train and Minimizes costs by cutting Assures high circulation
In business model terms, FREE based on adver- bus stations, forcing rivals to resort to costly editorial team to produce through free offer and by
tising is a particular form of the multi-sided hand distribution in important areas. a daily paper just “good focusing on distributing
enough” for a commute in high-traffi c commuter
platform pattern (see p. 76). One side of the
read zones and public transport
platform is designed to attract users with free
networks
content, products, or services. Another side of
the platform generates revenue by selling space Metro
to advertisers. KP KA VP CR CS
One striking example of this pattern is <Tca^,
write & produce acquisition
the free newspaper that started in Stockholm a daily paper retention
and is now available in dozens of cities around distribution ad space in high
circulation
the world. The genius of <Tca^ lies in how it distribution free paper advertisers
agreements with
modifi ed the traditional daily newspaper model. public transport
networks KR commuters
free city-wide
First, it offered the paper for free. Second, it commuter paper CH
brand ad sales force
focused on distributing in high-traffi c com-
distribution net- public transport,
muter zones and public transport networks by work & logistics train stations,
hand and with self-service racks. This required bus stops
<Tca^ to develop its own distribution network,
but enabled the company to quickly achieve C$ content, design & print R$ free newspaper
of a daily paper
broad circulation. Third, it cut editorial costs to fees for ad space in paper
distribution
produce a paper just good enough to entertain
younger commuters during their short rides

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