Turning Data Into Gold
Platforms have become a driver of new technologies, businesses and economies. Many in our industry focus on companies looking to enable others to create and deploy on existing foundations. And so a lot of media attention goes to APIs that generate innovation, energy and attention from third party developers in what we call the “App Economy”. Yet, many platforms have been generating revenue with the simple strategy of selling access to their valuable data. For many companies considering a platform strategy, charging for access to your APIs could be the best way to go to achieve your business goals.
When ESPN launched it’s public API program and developer portal in the beginning of March 2012, many latched on to the fact that the “world leader in sports” was launching an open API program. What was less mentioned was that ESPN was joining a growing group of companies that were turning their data into an API-driven product and monetizing it. Among those companies are Dun & Bradstreet, Rovi, Pipl and Thomas Reuters.
SportsData, which staffs analysts at sporting events, launched its API program in June 2012. Focused more on partner onboarding instead of developer engagement they feature a full breakdown of their pricing tiers on their developer portal. Clearly aiming for quality integration over quantity, they feature NBC Sports and SportingNews as customers.
Success with a “Data Economy” platform strategy can be profound. Dun & Bradstreet has said that its API is one of the highest growth products in their portfolio.
The adoption of the latest platform tools and technology by businesses in the data economy is interesting. Prior to the introduction of plug-in platform solutions like API Packager, these companies made their data available the “old fashioned way”. Customers paid annually, and were given FTP access to download large flat files (often CSV), to then upload to their own servers to power website and app content. There was no easy analytics, nor control, and certainly no easy or fast way to update data quickly. Media data companies that don’t provide data through APIs to second screen apps or to cable providers have no easy way to update their listings if a sports game runs over time or if breaking news interrupts the normal TV schedule.
With the adoption of APIs, it is easier for data companies to address both issues – using a reporting system like Mashery’s provides insights into what your customers are doing with your data and how much they are using, which makes it easier to upgrade their paid service agreement depending on their needs; it also allows data companies to offer their customers real-time data so that their apps and services can be even more useful to consumers.
By being able to track customer usage, data companies can be more effective at selling the right data to their customers. As part of this effort, many have also been offering free limited API usage (“freemium”) as well paid API usage, basically offering a free trial of their data for evaluation to drive users to pay for full access. The idea is, once you’ve experienced how easy it is to get data through an API, you will never want to go back.
Monetization of data platforms is a growing trend and is paying off for many – D&B had over 5,000 registered developers as of last fall and ESPN partnered with Foursquare through its API before even announcing its API publicly. More and more data companies will continue to open their data through paid APIs – API programs provide better and further control of data and customers as well greater and easier partner opportunities. It’s a proven platform strategy that should spell growth in data API revenue streams for years to come.