You may have often heard the phrase that data is the new oil, but what is oil worth without its pipelines and refineries? And what has oil to do with monetizing APIs? Data just like oil wouldn’t be worth very much to any of if it was just left where it was unrefined and in its raw natural state. If you know how to convert data into something useful learn about API monetization and develop an API monetization strategy. In our guide below we will show you how to make API revenue, and you may consider listing your API on an API management platform.
Just like when people fuel up their car with petrol or diesel, it is only because industry experts have gone to great lengths to make getting data to people in the way that they need to consume it much easier. When people access a webpage on the internet, they are most likely communicating with an application programming interface (API) at the same time.
For instance, when you view the newsfeed of a social media site, you make a Receive request to that platform’s application programming interface (API) to get the postings that other users have made. Or, when you use an application on your phone to check your email or view the weather, you are interacting with an API. Sometimes making an API call comes at a cost, you have to have an API key to access a service. API providers are making API revenue from these API resources.
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Monetizing APIs – The API Monetization Model
Developers frequently seek for third-party API provider who have already established an API that can do a specific thing, rather than implementing ideas from scratch.
For example, what business necessitates a receptionist to construct a telecommunications network in order to make a client call, or a cook to construct an oven in order to make some bread? The same holds true in the field of computer programming. Software developers rely on the tools and resources created by others.
If you’re a developer, you have move likely Googled if something can be done with a programming language’s libraries. Very often developer forums like StackOverflow may point you to some code where a developer has figured out what you are trying to do or recommend an API. Quite often savvy developers have figured out the solution that your software needs and have made it available in an API which you may have to pay to use, to get the benefits of using the functions of their code without giving you access to what the code actually is.
Problem solvers are API designers
People from any background can become an API designer. If you have ever created an excel formula that has helped an employer out and lead to massive cost savings for the company, or created a computer macro that has automated some mundane task that turned an hourly task into one that only took a few minutes, thinks of yourself as an algorithm designer.
If you have got a brilliant strategy for winning scrabble or sudoku that you could explain to others in a simple step process, you can also think of yourself as a person who can design algorithms.
If you have a methodology of knowing how to do something that just doesn’t come naturally to others, you are a natural problem solver capable of designing algorithms which a developer could implement into an API.
When you can solve people’s problems and put your solution into an algorithm that can be shared and integrated into software across the internet you have potential to make money on a huge scale.
Niche dataset owners have a wealth of information
Perhaps you have developed a specialized dataset that you believe will be in high demand. Maybe you’ve collected some rare and elusive pieces of information that can be used in scholarly and instructional programs.
How much time and money would consumers have to invest in Google to find the same information? It’s possible that your specialized data isn’t publicly accessible online, and if it were, you probably wouldn’t want to release it without being compensated in some way. It’s possible that you may generate a lot of money by turning your specialized data into a premium API service.
The IoT and APIs
For instance companies are turning their IoT (Internet Of Things) into data gathering tools. The companies that have invested in weather sensor equipment around the world are now making millions from the premium Weather APIs that their data has become accessible in.
It has even been proposed that street lamps gather data, and they do in many parts of the world. Perhaps your company has sensors deployed that gather data intelligence and could serve in an API that other businesses would find useful.
I don’t know about programming, can I invent APIs that make money?
The good news for you is that programming is becoming easier with simpler programming languages. The amount of people with the skills who can affordably create your API idea is increasing. You can find API developers on freelancer websites such as Upwork and Fiverr.
Many Python programmers, beginning at even the most fundamental level, are using the assistance of GPT-3 and artificial intelligence to rapidly create API designs. To do this, they begin by writing in plain English what they want an API to be able to do, and then the AI generates the majority of the code for them.
Is selling APIs profitable?
Are you looking to generate revenue from your API? If so, you’re not alone. Many companies are looking for ways to monetize their APIs in order to recoup the costs of development and drive additional revenue.
If you’re targeting a large market of potential API users, then you may be able to generate significant revenue. However, if you’re targeting a smaller market, you may need to reconsider your pricing strategy in order to make your API more affordable for potential users.
Ultimately, the profitability of selling APIs depends on a number of factors. By carefully considering these factors, you can develop a monetization strategy that meets your company’s needs and generates the desired revenue.
Income opportunities for seasoned developers from API developer programs
If you are a seasoned developer, you have undoubtedly spent hundreds of hours as a developer working on algorithms that could be valuable to other businesses.
Let’s say your company doesn’t view your algorithms as proprietary information. Then, you can turn your algorithm ideas into application programming interfaces (APIs) that can be accessed from the internet and implemented into any software code anywhere, thereby generating a steady stream of income from your algorithm ideas from similar businesses that need the same solutions in their software but just don’t have the resource to allocate that development time to their developers. There are many APIs which do quite common functions that over a million developers have implemented in their software, particularly flight tracking APIs, weather, sport and finance APIs make it into a top 50 list of most used APIs. The developers who create these can be compensated as much as 50% of the monthly subscription price. If you had a million businesses paying you 50% of $9.99 monthly subscription to use your API, you could be turning over $5,000,000 a month. In fact if you were to create a successful API and list it on APILayer (a platform that has a marketplace of different APIs that developers can subscribe to), APILayer only currently takes a 15% cut of revenues generated, leaving you with a whopping 85%.
Think about the millions of apps and services that rely on the Google Maps API to give their consumers access to mapping features. The software developers who create solutions that access this API have to pay Google based on how often Google’s API products are used.
Because of the widespread use of mapping and geo-tracking APIs by the software development community, you now have a choice between Google’s APIs and a plethora of others, some of which may be more suitable to your needs.
Strategies for monetizing APIs
No matter which monetization strategy you choose, it’s important to have a good API management system in place. This will help you track usage, manage access, and ensure that your API is always available and running smoothly.
There are a few different ways to monetize APIs. The most common are charging for API access, charging for API usage, and offering mobile apps.
One of the most common ways to monetize APIs is by charging for access. This can be done on a per-call basis, or you can charge a monthly or annual fee for access to your API. If you have a mobile app that uses your API, you can also charge for in-app purchases.
Another common way to monetize APIs is by charging for usage. This means that you charge based on the amount of data that is used, or the number of API calls that are made. This is a great option if you have a high-traffic API, or if you want to encourage developers to use your API more.
Finally, you can also monetize APIs by offering premium features. This could include things like higher limits, more data, or access to special features. This is a great way to get started with monetizing your API, as it allows you to offer a basic level of service for free, while still generating revenue from your more advanced users.
Charging for API Access
One way to monetize your API is to charge users for access. This could be a monthly or yearly subscription fee, or a pay-per-use fee. If you choose to charge for access, it’s important to make sure that your API is well-documented and easy to use, so that users are willing to pay for it. This is a revenue model where developers have to pay to access your API.
Charging for API Usage
Another way to monetize APIs is to charge for usage. Developers pay based on how much they use your API. Usually done a pay-as-you-go model, developers are charged based on the number of API calls they make.
Sharing great API finds is not only caring, but also the lucrative thing to do
Perhaps you lack the expertise to develop the next revolutionary API that every business will want. However, if you are searching the web for an API solution that is ideal for integrating with your company’s software and you find one publishing a blog post about it, and how useful the API has been to you is one approach to monetize your finding.
If people sign up after reading about it on your blog, the company may pay you a commission, for example currencylayer, a financial API, currently pays a 25% commission, and mediastack, a news feed API, also currently pays a 25% commission.
Find an API that you enjoy using in your own software solutions and enquire whether it has an affiliate program. Check out the great APIs available on API Layer marketplace and if they are useful to you, check out their affiliate programs.