Monday Memo
A Byte of Knowledge
Ever notice how some copywriters get weird when another kick-ass writer joins their company?
They start sweating...
Thinking their piece of the pie is about to shrink.
Bother other great copywriters don't shrink your pie - they make it bigger.
Way bigger.
When you've got multiple A-players cranking out winning campaigns...
The company grows faster.
More offers get launched...
More markets get tapped...
And suddenly that "small pie" you were protecting?
It's now 10x bigger than before.
And guess what?
You're still getting your cut from YOUR campaigns...
Just from a much bigger business.
So next time a hot-shot copywriter joins your team...
Don't get jealous.
Get excited.
Because their wins aren't taking from you...
They're adding to everyone's bottom line.
🚀 Discover the 27 ‘Plug-and-Play’ AI Prompts Every Marketer Needs
>> Access All 27 Prompts Here <<
Something to Ponder
We Asked – AI Answered
Our Question:
"What are 3 innovative examples of business using royalties as a business model?"
AI's Answer:
1. Vungle’s Revenue-Sharing Royalties in Mobile Advertising
What They Did:
- Vungle, a mobile ad network, disrupted the advertising space by partnering with app developers on a royalty-based revenue-sharing model.
- Instead of charging upfront fees, Vungle integrated in-app video ads and took a percentage of the ad revenuegenerated through these ads.
Why It Worked:
- Low Risk for Developers: Developers didn’t need upfront capital, making it easy for small app creators to work with Vungle.
- Aligned Incentives: The royalty model ensured Vungle was motivated to maximize ad performance since their revenue depended on app success.
- Exponential Growth: By 2020, Vungle was generating over $300 million in revenue annually and was acquired by Blackstone for approximately $750 million.
Key Takeaway:
- The royalty model can align incentives between businesses and partners, driving shared success. For marketers, consider how you can share in a partner's growth rather than charging fixed fees.
2. TikTok’s Music Royalty Partnership
What They Did:
- TikTok became a critical player in the music industry by paying royalties to artists and labels when users incorporate licensed songs in their videos.
- TikTok negotiates with rights holders to pay a per-stream royalty fee, turning viral dances and trends into significant revenue streams for musicians.
Why It Worked:
- Global Reach: With over 1 billion active users, TikTok became a major driver for music discovery. Songs like Lil Nas X's Old Town Road skyrocketed to fame through TikTok’s platform.
- Ecosystem Effect: Labels saw TikTok as a marketing channel rather than just a cost, incentivizing further collaboration.
- Quantifiable Impact: A 2022 report by IFPI (International Federation of the Phonographic Industry) found that 67% of TikTok users discover new music on the platform, directly increasing song streams and album sales.
Key Takeaway:
- Royalties can be more than payouts—they can incentivize partnerships that drive mutual growth and amplify brand visibility.
3. LEGO Ideas: Community-Created Product Royalties
What They Did:
- LEGO launched LEGO Ideas, a platform where fans submit designs for new LEGO sets. If a design reaches 10,000 votes and LEGO decides to produce it, the creator earns 1% of net sales as royalties.
- Example: The LEGO Saturn V Rocket set, designed by a fan, became a bestseller and generated substantial royalties for the creator.
Why It Worked:
- Crowdsourcing Innovation: LEGO leveraged its fan base to identify products with built-in demand.
- Low R&D Costs: By turning fans into contributors, LEGO reduced its product development risks and expenses.
- Community Engagement: Fans felt more invested in the brand, deepening loyalty and advocacy.
Key Numbers:
- In 2020, the LEGO Ideas platform helped the company generate $7 billion in annual revenue, with fan-submitted sets often being among the top sellers.
Key Takeaway:
- Offering royalties to customers or contributors can incentivize creativity and build an ecosystem where your audience co-creates value.
GOT 15 SECONDS?
Thanks for reading the Monday Memo.
Until next time!
The AI Marketers
P.S. Help shape the future of this newsletter – take a short 2-minute survey so we can deliver even better AI marketing insights, prompts, and tools.
[Take Survey Here]
