I am starting a web-based service business and don
I am starting a communications business on the internet. Some of my competitors who provide a similar (but not exact) service use paid ad sponsorship, while others use paid subscriptions from registered users. Is there a trend toward one type of payment method over another? Is one type usually more profitable and easier to maintain?
Congratulations on taking the time to examine your business model and future revenue streams.
If you take into account that many of the companies that did not survive the dotcom bust were companies with advertising-only revenue models, your choice might become more clear.
You also might want to consider a mix--it really isn't an either/or situation.
Another thing you might want to consider if you adopted an advertising-only business model is whether that business model is scalable. How much? For how long? What would happen to your business in a recession or tough economic times?
Be sure to ask the same questions about a subscription model.
That is not to say that advertising-only business models are wrong; they're just more difficult to master, leverage and maintain.
Entrepreneur Editors' Picks
This Founder Quit His 'Prison'-Like Teaching Job Within 2 Months. Now, He and His Sister Are Helping Other Teachers Leave the Classroom and Achieve Financial Freedom.
If You Focus on Problems, You'll Only Find More Problems. Here's How to Focus on Solutions.
Facing More Than 15 Years in Prison, This Founder Transformed His Hustle Into a Powerful Personal Brand and Business. Now, He's Giving Back in a Big Way.
Apple Asks This Jarring Interview Question as a Secret Way to Evaluate a Candidate