Using the digital convergence equalizer to determine your revenue model 

Sanjaya Krishna – Digital Services Leader, KPMG in the US: We built the digital convergence equalizer using the notion of a graphic equalizer that you can find in any kind of music player. For instance, people used to have them as an external component in stereos, now they are in the digital music players. It essentially allows you to fine tune across a set of different parameters, your music, so you get the optimal sound for you. Leveraging that model, in this case in our digital convergence equalizer, instead of having frequencies of music, we have individual characteristics of the value proposition, and we have come up with 20 different characteristics, which we would like to refer to as the 20 Cs. 

Tudor Aw – Technology Sector Head, KPMG in the UK: And the idea is that you go through each of those value propositions and evaluate, first of all, is it relevant to you? If it is relevant to your value proposition, then work out, are you strong in that or weak in that, compared to others. Depending on that value proposition, the equalizer will also suggest what the revenue model bias is for that. So again, it’s a simple example, if you think content is one of your value propositions, if it’s a very unique piece of content you’ve got, then that might suggest that you can go for pay model. If your content is actually very common or ubiquitous, that would suggest it needs to be a free model or ad-supported type model.

Sanjaya Krishna: Other examples might be community. So you think about social networking sites like Facebook and Twitter, that really foster community. But you might have others that are a little less known, one of ours is compliance. So, you might think, what kind of a value characteristic is compliance? Well, you know internet sites that allow you to do things like pay your taxes, register your vehicles, or renew your vehicle registration, that’s what we need.

Tudor Aw: Comment is another C that we think is a great value proposition. So, quite often when we go to newspaper article now, it is not just the article we are interested in but it’s everybody’s comments following that article. Conversation is important. We can now go to forums and just start exchanging viewpoints.

Sanjaya Krishna: It is almost like you are using the  tribe’s concept to look at the demand side and the convergence equalizer and the 20 Cs to look at the supply side. Convergence equalizer is really looking at what are the characteristics of what I am putting out there — my supply — and the tribe’s concept is what are the characteristics of the digital tribes who I want to attract.

For more on Emerging Business Models to help serve Digital Tribes, please visit kpmg.com/tribes