Thanks to the internet, many traditional brick-and-mortar businesses have since had their online equivalent created and for the most part it’s quite easy to see how they translate into the online space. If a casino takes its operations online, for instance, it’s basically just a digital version of what that same casino would have been doing in its physical form. The same applies for many other businesses, although some are made much more profitable on account of going online and not having to deal with any of the physical overheads they would have previously had to contend with.
Some businesses never even go through the physical-to-digital transformation phase though, like a casino whose genesis is as on online platform. Of all the businesses that we can zone-in on in scoping their operational models, some perhaps make for more interesting case studies than others, simply because the manner through which they make money is not readily recognisable. You have to look a little deeper.
So, we’re going to take a look at data storage and peer-to-peer networks such as MegaUpload and the likes to uncover their rather clever business models.
Paid data storage
At first glance, one would perhaps justifiably ask the question why on earth anyone would pay to store their data on some server, halfway across the world. It’s only when the need to store your data arises though that you realise why.
If you create an account with pretty much any one or more of the free data storage providers, including the data storage service attached to public email service providers like Google’s Gmail, you can perhaps get away with never having to pay for additional storage. This is only if you’re storing moderate volumes of data though. Start getting into the likes of video editing and such and there’s a greater need for more storage space.
Data storage companies then introduce the paid capacity or some upgrades to your storage capacity and you’ll be quite surprised as to the effectiveness of this model. There’s a great demand.
Let’s face it, most of the people who use online data storage repositories are usually storing copyrighted material, perhaps driven to do so by the fact that they don’t quite believe in the intellectual property laws that exist. Other times it’s just a matter of backing up media which they might very well have paid for, but in many instances these files are then made available to the public to download, if of course the privacy settings are set as such by the uploader.
As a result, when someone downloads the movie you might have uploaded as a backup, they’re violating copyright laws, but that is often turned a blind eye to by the operators of these platforms because they make the bulk of their revenue through advertising. Who wouldn’t pay some good money, as an advertiser, to have their banner add flashing away while someone on a free account waits for the 2gigabyte download to complete, all the while monitoring it to catch any sight of it perhaps timing out or something like that?