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It's time for an Airbnb model for app monetization

We have become used to three main ways in which apps collect their revenues: Advertising, data collection, and premium subscriptions.

What if there was an alternative — leasing your excessive resources.

Let’s say you own a $1,000 laptop. You are using it only for a few hours every day; the rest of the time, it’s not in use. Now, let’s say there is someone on the other side of the globe in need of your laptop’s processing power, network connection, or IP. Wouldn’t it be great if you could lease it to them during those hours your laptop is left untouched?

When an app vendor offers you their service, they expect you to pay them back in some way, whether it’s through money or data. Lending your excessive resources could be a new, effortless solution. It wouldn’t take up your time; it wouldn’t cost you money; and the app vendor would be able to create some revenue in return for your use of his service.

A company that is enabling this method is Hola, known for its free consumer VPN service used by over 80 million people worldwide, to break down the information barriers on the Web. While other VPN services cost between $5 to $10 per month, Hola is able to provide a free service to those users who are willing to contribute a small portion of their idle resources to the Hola network. Users that want to use the Hola service but not to participate in the network can pay a $5 per month subscription fee instead.

This model enables Hola to provide a free service to those users who otherwise may not have been able to pay and use such a service.
However, many users are wary of this model, due to a series of concerns, such as privacy, data usage, and battery usage.

Let’s take a closer look at these concerns in relation to the main solutions.

Advertising is the most popular monetization method. How many times were you using an app or trying to access a website, and were interrupted by an annoying ad?

The issue with ads goes well beyond feeling annoyed by the interruption or distraction they cause. A study reveals that advertisements use up to 40% of your bandwidth.

Being a peer in a network like Hola means that when your IP is idle (not in use), connected to a power source and to a Wi-Fi network, Hola has access to some of your network and processing power, routing a minimal amount of traffic through your device. The amount of traffic that Hola passes through a node on its network per day on average is equal to less than a 20 second YouTube clip.

Many free services, instead, choose to collect your personal data and sell the information to advertisers. This method does not waste your time, and uses a minimal amount of your resources. However, there is a clear privacy issue in the collection and sale of data.

Google, defined an unstoppable data collection machine,” makes no secret of monetizing its search engine by selling users’ data. Every time you search for a word or click on a result, Google records it in its system. In the picture you can see how much information Google Maps records: It knows where you have been every minute of your life! (Source).

In other cases, when you want to use a service, you’re asked to subscribe to a premium plan and pay a monthly fee. How many times have you actually decided to purchase a subscription plan for an online service?

Data prove that most users don’t like this solution. For instance, though most music streaming services gain their revenues from a monthly paid subscription plan, a minimal percentage of users do pay for a subscription. Only 5% of Pandora users actually have a subscription plan! (Image source: Forbes).

Tidal is another example: Though it’s popular for offering a high fidelity streaming quality, it has also been criticized for being “too expensive.”

In conclusion, Hola’s monetization method not only is harmless, it’s also more convenient. Becoming a peer of a network does not bother you as advertisements do, it doesn’t reveal any information about you to anyone, it’s free of charge, and doesn’t use up your battery or data plan.

Of course, users can also choose not to become a peer, and therefore pay a subscription fee, as you can see in the image below:

If you wish to try out the new Hola monetization SDK, please contact avi@hola.org