In yesterday's opening of a discussion of revenue models for data bite formats, I pointed out that tool developers and publishers have a strong incentive to use their tools and feeds to generate revenue. Today the next question:

Where will they get it? Developers have three potential revenue streams: software sales, software support and advertising. Advertising could actually be two streams itself: advertising to people who come to their site to get the tools, and advertising appearing in the tools or the feeds they work with. Advertising includes advertising their own products (in other words, they get advertising on their own site for free--except for the opportunity cost: they could sell their advertising space rather than using it themselves--which is sort of like revenue).

A few potential revenue streams that come to mind for publishers include: advertising (on their sites and within the feeds), and subscriptions fees for the feeds or for publishing services releated to them. Publishers who only publish summaries in their feeds are less likely to advertise in the feed (or to need to...who knows what they'll actually do) than those who publish full content in the feed. The reason is obvious: if the feed drives people to their site, they can advertise on the site, and keep the feed clean. If the feed replaces their site, they'll need to advertise in the feed to replace revenue lost as less people visit the site. Even if more people end up visiting the site, the increase in bandwidth costs is likely to motivate publishers to advertise in their feeds.

Tomorrow, I'll discuss factors likely to affect our acceptance or rejection of efforts to generate revenue, including how they are implemented, when they are introduced, and who they are likely to affect.