Page 159 - Electronic Commerce

Chapter 3

Advertising-Supported Advertising-Subscription Mixed Supported

Most or All Content Substantial Content Most Content Available
134 Free to All Visitors Free to All Visitors Only to Subscribers

The Boston Globe BusinessWeek The Economist
Cleveland Plain Dealer Chronicle of Higher Education Foreign Affairs
Financial Times Forbes Harvard Business Review
Newsweek Inc. Magazine National Geographic
InStyle The Los Angeles Times Nature
PC Magazine The New York Times Scientific American Learning
San Francisco Chronicle The Washington Post Sports Illustrated
Smithsonian Technology Review Cengage
Time The Times
The Wall Street Journal 2015
©
FIGURE 3-3 Revenue models used by online editions of newspapers and magazines

Sports fans visit the ESPN site for all types of sports-related information. Leveraging
its brand name from its cable television businesses, ESPN is one of the most-visited sports
sites on the Web. It sells advertising and offers a vast amount of free information, but
die-hard fans can subscribe to its Insider service to obtain access to even more sports
information. Thus, ESPN uses a mixed model that includes advertising and subscription
revenue, but it only collects the subscription revenue from Insider subscribers, who make
up a small portion of site visitors.
Consumers Union, the publisher of product evaluations and ratings monthly magazine
Consumer Reports, operates a Web site, ConsumerReports.org, that relies exclusively on
subscriptions (that is, it is a purely subscription-supported site). Consumers Union is a
not-for-profit organization that does not accept advertising as a matter of policy because
it might appear to influence its research results. Thus, the site is supported by a
combination of subscriptions and a small amount of charitable donations. The Web site
does offer some free information as a way to attract subscribers and fulfill its
organizational mission of encouraging improvements in product safety.

Fee-for-Transaction Revenue Models
In the fee-for-transaction revenue model, businesses offer services for which they charge
a fee that is based on the number or size of transactions they process. Some of these
services, including stock trading and online banking, lend themselves well to operating on
the Web. To the extent that companies can offer Web site visitors the information they
need about the transaction, companies can offer much of the personal service formerly
provided by human agents. If customers are willing to enter transaction information into
Web site forms, these sites can provide options and execute transactions much less
expensively than traditional transaction service providers. The removal of these
traditional service providers is an example of disintermediation, which occurs when an

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