Business models: business based on digital services.

Business models: business based on digital services.

If you want to develop a business models based on the digital services, the best time is now. This is the optimal period for developing a digital business or transforming a physical services business into an online one.

We live in the digital age. Regardless of our lifestyle, most of us own a smartphone, have internet access and use online services almost daily to make our lives easier.

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Unlike the sale of physical products, which we discussed in previous articles, digital services involve less logistics infrastructure but a greater investment in software development.

Here are some ways to approach the business model based on digital services, with successful examples for everyone.

Business models based on digital services

1. Subscription-based service

The subscription has been around for a long time as a business model. You can take as an example the services offered by the gas, electricity, internet or mobile telephony provider.

However, this model has undergone a rapid evolution with the popularization of the Internet.

It involves a virtual space (a platform, a mobile application or a desktop application, etc.) that users can access in exchange for a monthly, quarterly or annual subscription. Here, they can access either content or a software service (SaaS) for which users would pay.

Subscription-based businesses may offer a limited period of access to all content, such as Netflix or, after which users repeatedly pay a monthly subscription to keep their account active.

How do you keep loyal users month after month? Always giving them new content in their interest.

2. “Free” service

You certainly know it, because you use it too. It is a service that is permanently free only for a certain category of users.

Such services are offered by the well-known social networking and content distribution platforms such as Facebook, Instagram, LinkedIn, YouTube, Tumblr, Pinterest and many more.

They are based on gathering as many users as possible, to whom to display advertising messages from brands that pay for promotion.

In simple terms, this business model is based on data collection. You don’t have to invent a second Facebook to start a business based on this model. You just have to be creative, find the right niche and give users the opportunity to create and receive value.

3. Service on request

This model is based on “rent”. In other words, you only pay when you need it.

The business ideas specific to this model fall into two categories:

  • Offline services
  • Exclusive online services

The first category includes businesses such as AirBnb, Uber. Basically, these are platforms that mediate the connection between users who have a need and those who offer a solution. They are niche businesses that are based on solving a clear need but without owning property rights over the goods involved. For example, the apartments and houses rented on AirBnb are owned by the owners, the cars on Uber are owned by the drivers, the listed restaurants are individual businesses that use the platform only for promotion.

The second category includes platforms that involve only digital products. For example, Udacity is a successful model in this regard. Users access the platform for free and pay only for the courses they want. It’s like a virtual store where it’s free to take a look.

4. The “freemium” model

Who doesn’t like to receive a free service for life? In fact, this is what attracts most businesses. It costs us nothing to try them, and then, if we are convinced, we pay to receive more. However, the decision always remains with the consumers.

Unlike social networks or other businesses mentioned in point #2, the difference from this model is that the same users can choose whether to pay for the service or not. Obviously, if the business collects a large amount of data, it can also expand in the direction that Facebook and Instagram did: to allow the posting of ads. However, this would not be the main source of income.

Examples of such businesses are dating applications, the most popular of which is Tinder. Users can access the service for free as much as they want, but those who want certain facilities can pay a symbolic monthly subscription.

Free mobile games work on the same principle. Users can play endlessly free of charge but can pay for extra features to improve their gaming experience.

Spotify is another such business model. Unlike first-class services (such as Netflix), on Spotify we have the opportunity to “take advantage” of that free “subscription” indefinitely. However, we have access to only a limited number of facilities, chosen strategically so as to convince us to go for a subscription.

Another example of business on this model is It is a platform that allows any user to create visual content (banners, personalized pictures, social media posts, etc.) for free. However, it also offers the option of a paid account for premium users.

5. Business models on the ecosystem

This is one of the most complex models because it involves several digital products or services.

Big businesses like Google, Facebook or Apple have developed such ecosystems that provide a suite of services for multiple audiences.

Such businesses are built gradually and they start from one of the models mentioned above. Over time, with their development, it launches other products under the umbrella of the same brand, in order to retain consumers.

Each of these digital products or services launched can, in turn, be based on different models, from those listed above.

Can I develop these business models on WordPress?

In essence, most of the businesses in the examples above require complex infrastructure. They use both mobile and desktop or web applications to allow access to as many users as possible.

Because this model of selling online services is based a lot on the amount of data obtained, we recommend that you choose from the beginning a software solution created especially for you. However, it all depends on how you validate your online service idea based on which you choose the reliable long-term technical solution.

The WordPress platform can complement your business with digital products and can help you present the solution to potential users.

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