How can revenue be created with a content based social media channel and which revenue streams create the most turnover?

Philipp Nasemann

Student thesis: Master thesis


Social media and the web 2.0 with its key element of user generated content became a relevant business field in the past ten years (Bender, 2008; Stareva, 2012). The basic principle of content based social media business strategies is simple: By providing target group relevant content a large basis of fans and followers is created and in a second step turned into revenue (Pellikan 2014). Creating for example a YouTube channel, one of the key social media platforms, is a very lean business model: YouTube provides the technical infrastructure to broadcast online videos without charges, so all that is needed are basically a camera, a microphone and a good idea for relevant content (Lammenett, 2012). Providing adequate content is the first crucial point, as “Content is King” in social media (Bailey & Bailey, 2010). The next relevant question is how to turn followers and fans into actual revenue. There is a large variety of opportunities like advertising, paid-content, cross-selling etc., but so far no study has been published to answer the obvious question:How can revenue be created with a content based social media channel and which revenue streams create the most turnover? Based on a broad literature search on possible revenue streams and the 4C Typology of Internet Business Models (Wirtz et al. 2010) as theoretical framework this question is being analysed using a pragmatic methodology approach in form of a good practice example: Karl Ess. Information on Karl Ess is publically available; in addition several of his employees and business partners were interviewed to gain a deeper insight and to understand his strategic decisions. Karl Ess is providing fitness and nutrition related content in web 2.0 channels like YouTube, Facebook and Instagram as well as on his own website. By creating a turnover of several Million euros in 2014 he can be regarded as very successful. The analysis of Karl Ess´ revenue streams shows that by cross selling of own products targeting his followers’ needs, much more revenue than with online advertising can be created. Wirtz et al. (2010) on the other hand differentiate between content based businesses like Karl Ess, with their primary revenue streams consisting of paid content and advertising, and commerce orientated businesses. So regarding the 4 C Typology of Internet Business Models Karl 7 Ess´ approach could be described as hybrid strategy. For Karl Ess this hybrid strategy works quite well, but further empirical research is necessary to determine, if Karl Ess is just an exception or if producing and cross selling own products is in general an adequate way besides advertising and paid content to generate revenue for content based social media channels. Besides pointing out the need for further research, this paper provides valuable insights for practitioners: The detailed analysis of Karl Ess´ value streams and strategic decisions can be used as an orientation by other content based social media channels when it comes to decide which value streams should be implemented.

EducationsMSocSc in Service Management, (Graduate Programme) Final Thesis
Publication date2016
Number of pages98