How Does Dubsmash Make Money? The Dubsmash Business Model In A Nutshell

Dubsmash is a video-sharing social media service allowing users to creatively film themselves dubbing over music, movie, or television clips. It was founded in Germany in 2014 by Jonas Drüppel, Daniel Taschik, and Roland Grenke. The trio, who met at Hackathon in Berlin, became instant friends and set about working on a new start-up idea. As of 2021, the company still does not generate revenues, but its expansion is based on funding.

Origin Story

Dubsmash is a video-sharing social media service allowing users to creatively film themselves dubbing over music, movie, or television clips. 

It was founded in Germany in 2014 by Jonas Drüppel, Daniel Taschik, and Roland Grenke.

The trio, who met at Hackathon in Berlin, became instant friends and set about working on a new start-up idea.

The first such idea was Starlize, a platform for users to create short-form music videos. While this venture ultimately proved unsuccessful, it did provide the foundations for Dubsmash.

This time, the founders took the time to develop a much simpler user interface. They also knew that Starlize users preferred to share videos privately, so WhatsApp and Facebook integration was also added.

Costs were also kept down by requiring Dubsmash users to save their videos outside of the app.

Dubsmash was launched in 2014 and quickly grew to a user base of 50 million after it was promoted by celebrities Selena Gomez and Jennifer Lopez. It then secured Series A and Series B funding in 2015 and 2016 respectively.

After finding the German start-up scene to be process-driven and lacking creativity, the company relocated to New York City.

This move also helped the company focus exclusively on American teenagers, utilizing influencers to get the word out and completely overhauling the app design.

In December 2020, Reddit acquired Dubsmash for an undisclosed sum.

The platform continues to operate today as the main rival to TikTok, with over 52 million daily active users.

Dubsmash revenue generation

At the time of writing, Dubsmash does not generate any revenue. Operational costs have been historically funded by periodic injections of investment capital.

Now that the company has been acquired, one can assume that costs will be met by Reddit moving forward.

Whether the platform will be monetized is less clear, however. Some argue the platform is following the model of Facebook, which was free of monetization for the first eight years of operation.

Drüppel has also noted publicly that he has considered various monetization methods, including branded accounts, video advertising, and premium features such as animations.

While Dubsmash will continue to operate as a standalone brand, its video creation tools may or may not be integrated within the somewhat monetized Reddit platform. In an interview regarding the acquisition, Reddit CEO Steve Huffman noted that:

Dubsmash elevates under-represented creators, while Reddit fosters a sense of community and belonging across thousands of different topics and passions. It’s clear that our missions closely align and that our community-focused platforms can coexist and grow as we learn from each other.

If monetization is added, it will need to accomplish two things. With a target audience of American teenagers, the service will need to abide by rules and regulations around advertising or selling to minors.

Any monetization will also need to be sensitive to the under-represented and sometimes underprivileged communities it serves.

Key takeaways:

  • Dubsmash is a video-sharing social media platform founded in Germany by Jonas Drüppel, Daniel Taschik, and Roland Grenke. The service was acquired by Reddit in 2020 for an undisclosed sum.
  • With over 52 million daily active users, the potential for monetization on the Dubsmash platform is high. However, the service does not currently generate any revenue.
  • Dubsmash co-founder Drüppel has hinted at monetizing via advertising, premium features, and branded accounts. Any monetization will need to be sensitive to the target audience, which is mostly under-aged and under-privileged.

Read Also: How Does TikTok Make Money, How Does Reddit Make Money, How Does Instagram Make Money, How Does Snapchat Make Money, How Does Pinterest Work And Make Money.

Related Business Model Types

Platform Business Model

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A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Marketplace Business Model

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A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Network Effects

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A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Asymmetric Business Models

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In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Attention Merchant Business Model

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In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Wholesale Business Model

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The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.

Retail Business Model

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A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.

B2B2C

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A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.

Crowdsourcing Business Model

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The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.

Open-Core Business Model

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While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.

Open Source vs. Freemium

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Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.

Freemium Business Model

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The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.

Freeterprise Business Model

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A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.

Franchising Business Model

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In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.

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