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EF Database Report v1
There are two main types of business model for…
EF Database Report v1
There are two main types of business model for funding an EF database: proprietary with user fees and open with mixed revenue model. Overall, we document 5 template business models. Revenue estimates are necessarily speculative given the information at our disposal regarding the market (pricing, demand) and costs. However, given the relatively low cost of developing and maintaining the database, at least relative to demand both for data itself and associated services, and the high social value and public interest we believe that several business models are feasible and sustainable including open ones.
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Open models have a variety of options for revenue starting with the obvious one of public funding and extending to support (financial or in kind) by other major stakeholders, complementary goods (service provision) and even user fees via dual licensing.
Complementary services can be an effective revenue stream in this case (get help from Gregor around what these could be)
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A user friendly interface (e.g. visualizations, explorer) and formats e.g. excel / xml
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Other stakeholders may support, particularly if the value of the DB has been demonstrated
Google funds lots of Open Source software because it is useful to it or the broader ecosystem it depends on. Similarly, major consumer goods companies want to reduce their EF and credibly demonstrate that so having a good, open, transparent shared db to support this is valuable
There may be contribution in kind e.g. i am a energy supplier and i am happy to share my co2 information with an open database for free (but not a proprietary one)
We can also link contribution to participation in decision-making to create further incentives e.g. giving money (or even raw data) gives a say on decisions about things like where coverage might be expanded to
You can be open and use dual licensing e.g. a sharealike license by default and a special unrestricted license for paying commercial users to achieve price discrimination and income from high WTP users
Noncommercial licenses could also be interesting but they are not open and can be complex (what exactly is non-commercial) and limit downstream use and reuse significantly (e.g. maybe minor, but can't integrate with other major commons like wikipedia, open street map etc ...)
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Appendix: contributor/supplier remuneration are (esp) important for open models and there are interesting opportunities for "innovation"
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However, collecting and integrating data to a good quality is costly of effort etc so it will be need to be remunerated
There is a different, innovative mechanism we term remuneration rights that could be relevant here (mimics the market economy in incentivizing contribution but without having to specify up front what is wanted or have it already available "on the market")
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Note: it is easy to see limitations or difficulties of the remuneration mechanism especially re estimating value. But remember, all the other approaches have the same problems but worse. We don't have to be perfect, just better than the others ...
[Preliminary 1: Building blocks of business models] In designing digital business models there are three key building blocks: ... ✅
In order to design digital business models we need an understanding of the key components of a business model
A digital business model has three core components: revenue, supplier remuneration and legal structure
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We can divide into two major types of business model: a) proprietary user fee models and b) open models.
?? [may skip] We focus on revenue because revenue generation is central to sustainability of the good, has a simple set of options that are directly associated with access feature (which is then the major determinant of social value)
There are two broad options here: closed/fee-based and Open. Both can be varied a bit as we will discuss ...
User fee base models are like this ... . Assuming there is demand they can generate revenue but they obviously limit access and reuse ... => Model A "User fees" classic
Open models have limited (or zero user fees) and so revenue comes either from other sources such as X, Y, Z. (?? cost will be lower etc - maybe say elsewhere)
Model A is well understood and is already out there - there are a bunch of proprietary EF database providers. And the strengths and limitations are well known ... the very existence of this tender is evidence of interest in examining additional options
Thus, in the rest of the piece we will explore open models and their variants in more detail
There are limited set of revenue models you can use. The best starting point for identifying potential models is the simple division between proprietary user-fee based model and open models.
User fee are well understood (though of course can be optimized ...) and are our model A. Rest of piece focuses on open models as less understood and may be especially relevant here (see Appendix B)
[Preliminary 2 Basic economic facts about EF database]. Basic economic facts about the EF Database: core maintenance is estimated at 500k-15.m a year with a broad set of potential users with varying ability to pay ✅
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Costs of data maintenance, updating and operations 10-25% of data costs (depending on bare minimum for survival vs expansion)
Diverse set of users some with varying WTP e.g. very high WTP in corporate or regulated sectors and many with low or uncertain WTP (but maybe high value e.g. innovators, engaged citizens, non-profits etc)
User demand has a long tail: e.g. high WTP customers in corporates and some gov. Need to limit reuse if a proprietary model. . Diverse set of users some with very high WTP (e.g. corporate or regulated) and many with low or uncertain WTP (but maybe high value e.g. innovators, engaged citizens, non-profits etc) and significant reuse potentia
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