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:
- Websites are offering free or discounted content to users to increase the footfall on the website for viewing the advertisements hosted on the site.
- Some applications provide advertisements through mobile devices based upon the location or other factors
- 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.
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.