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Revenue models in Digital economy

 
Revenue models in digital economy

The revenue streams in the digital economy are not limited to income from the sales of goods and services. They are unique, and tax laws have to adjust themselves to taxing this income. Some of the revenue models are discussed below:

Ad based revenue

There are three ways in which the revenue are earned in the advertising-based model:

  1. Websites are offering free or discounted content to users to increase the footfall on the website for viewing the advertisements hosted on the site. 
  2. Some applications provide advertisements through mobile devices based upon the location or other factors
  3. Social media platforms and websites build large user communities before monetizing their captive audience through advertising opportunities. 

Sale or renting of Digital content

Users pay for per item downloaded. 

Sales of goods or services through the virtual shop

Businesses sell products through the websites which are delivered later. Internet assists in connecting with global customers. 

Subscriptions

Regular payments for software services, online gaming, digital content, and many more. 

Licensing content and technology

Licensing includes access to specialist online content, music, video, journals, algorithms, software, cloud-based operating systems, or specialist technology. 

Selling of user data

Data is the new oil. All the personal information and preferences of the online users are collected and analyzed to offer new products or to identify the target audience. These data are sold to data brokers or data analytic firms for market research.

By Taxbeech

Dear Readers,
We at TaxBeech try to provide detailed information on International Taxation (IT). We have started operations in 2020 and will strive to provide everything on IT easily and understandably.

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