Discord is an instant message app that also offers features such as voice and video calling. Overall, it is a digital distribution platform that serves as an online communication tool. Its primary products include voice calls, video calls, text messaging, media and file transfer. Similarly, it features private chats and communities, which provide public communication channels.
Discord has grown significantly in popularity over the years. It initially started as an online communication tool for gamers only. However, it has modified its business model to compensate other communities. Now, it has become a VoIP, instant messaging and digital distribution platform available to all users. Discord app works on all major platforms, including Windows, macOS, iOS, Android, Linux, etc.
Discord started its operations in 2015. However, its concept came from Jason Citron and Stanislav Vishnevsky. Initially, they incorporated a game studio that developed online games. However, during the process, they discovered the challenges teams face to strategize for online games. At the time, there were minimal options available for online communication for gamers.
The solution they found was to develop their online communication tool, which came in the form of Discord. The company behind the app, Hammer & Chisel, gained funding from various companies to start the platform. This process led to the first release of the app under the domain discordapp.com in 2015. At the time, the most prevalent alternative for gamers was Internet Relay Chat (IRC).
However, IRC lacked various features, which Discord built on and developed. Many online gaming communities adapted Discord and switched to it from IRC. Over the years, the company has grown and become one of the top names in the online communication platform industry. The company has also received fundings from various sources, which has allowed it to grow even more.
Discord’s success and popularity come from its Discord app, which is its primary income source. The company behind this platform is also successful. This success generates from its business model, which is how the company makes money. Before understanding those aspects, it is crucial to know how Discord works.
How does Discord work?
Discord works by allowing users to contact others online. Similarly, it offers the ability to join communities or contact public services. This process starts from getting an account on the platform. Users can get a temporary account and register it to make it permanent. However, they also have the option to discard it if they don’t want to do so.
Once users get their profile, they can update their profile to add personal details. However, this process is not mandatory. Instead, users can choose the amount of personal information they want to share on the platform. Through this account, users get a unique identity on the app. This identity includes a username and an identifier number.
Users can access Discord through its web app. As mentioned above, however, they can also use the platform through its apps available on different systems. The web app provides an accessible method to access Discord. However, the specialized app offers more features and is available while playing games. Both have a similar design, which allows users to transition between them easily.
Once users use their preferred app to log into their accounts, they have several options. The first is to chat with other users. However, this process requires them to search for those users through their unique identity or username. Once they do so, both users can chat using private channels. These chats include all features, such as voice calls, video calls, instant messaging, screen sharing, etc.
The second option for users is to join a server or community. Discord also allows them to create their servers. These servers are channels that relate to a specific community. Users can connect to a public server through the search feature or use a custom invite link to access others. Once they join a community, they can chat with its users through public channels.
Apart from these, Discord has various other products and services. For example, it has several moderation tools for server owners. However, the above two features are the most prominent. Most of these features are free to use and do not cost anything. However, it creates a question regarding how Discord makes money. The answer to that question may lie in its business model.
What is Discord Business Model?
Being an online communications tool, Discord uses an e-commerce business model. However, this model allows for further modifications, which the platform has used to its advantage. Discord uses a combination of several business models within the e-commerce model to make money. The platform employs a subscription-based model, digital marketplace and merchandise business models.
The primary income source for Discord is the subscription-based business model. With this model, the company charges its users a monthly fee for its premium services. The subscription business model allows the company to make money from the same service for perpetuity. The company has used this model for the longest time.
The second income source for the company comes from its digital marketplace business model. Discord offers an online market where it sells various digital products, primarily consisting of games. Through this model, the company provides a platform for developers to present their games to the public. In exchange, Discord receives a commission for each sale made.
Discord also uses a merchandise business model. Through this model, the company sells various clothing items and other products with its logo on them. Users who prefer those products purchase the merchandise and pay the company in exchange. However, this revenue stream does not constitute a significant income source for the company.
Apart from the above business models, Discord also uses other models to increase revenue sources. For example, the company offers servers the ability to customize their community with cosmetic items. However, these revenue sources do not constitute a significant income for the company. Overall, all these business models combined make up the Discord business model.
How does Discord make money?
From the above Discord business model discussion, it is straightforward to understand how it makes money. Under each of these models, the company offers products that users can purchase. These products contribute to the income the company generates. Some of the primary products that Discord offers, through which it makes money, include the following.
Discord Nitro
The primary income source for Discord is its Nitro product. It is a subscription service, which allows users to get specific perks that others users can’t. This feature costs $9.99 per month or $99.99 annually. However, the company also offers a more affordable alternative to its Nitro subscription known as Nitro Classic. Users can subscribe to or cancel this subscription at any time.
Server boosts
Another feature similar to Discord Nitro is server boosting. This process involves users paying money to get specific features. However, these features do not apply to their account or profile. Instead, these relate to the servers which they are a part of or moderate. There are several levels of server boosting for every server. A single subscription to this feature costs $4.99.
Digital marketplace
Discord has a digital marketplace, which it calls game inventory. This marketplace serves as a platform for game developers to offer their games to an audience. In this case, Discord users serve as the primary buyers. For every game that this marketplace helps sell, Discord receives a 10% commission. The developer, in contrast, keeps the residual amount.
Merchandise
A small portion of Discord’s overall revenues come from the merchandise its sells. As mentioned, however, these items do not form a significant percentage of the money that Discord makes. This merchandise includes t-shirts, hoodies, sweatshirts and hats. Discord users can buy these items in several colours. The platform does not manufacture these items but uses an external supplier to do so.
Others
Discord also makes money from other sources. The company has various partnerships, which help it attract more users. Similarly, it makes money from its investors. However, these streams do not form a part of the company’s revenues. Most of these sources do not constitute a significant income or finance for Discord.
Conclusion
Discord is an online communication tool that provides various features. Its products include voice calling, video calling, screen sharing, media and files sharing, etc. Although it uses an e-commerce business model, Discord utilizes a combination of various models within it. The company makes money from several sources, as mentioned above.
