Credit Based API Pricing, With Monthly And One-Time Plans29 Dec 2014
I'm reviewing the business models of many of the top API platforms over the last couple of weeks, and I’m seeing some pretty interesting approaches to API monetization. As I look through each API, I see that some platforms don’t have their API monetization strategy together at all, while others are following the pretty proven “cloud utility” model handed down from providers like AWS, and then I see some who are continuing to standardize how we pay for, and monetize APIs--which makes me happy.
One interesting pricing page I reviewed over the holidays, was from the file conversion API, ConvertAPI. They have a credit based API monetization approach, allowing you to buy a certain amount of credits on a monthly basis, or make one-time basis. Each area offers four tiers, allowing for the purchase of credits at a various rates. One thing I found curious though, is that your credits purchased monthly do not roll over, where your one time purchases do—I will have to think about the pros / cons of this more, before I comment.
The ConvertAPI also has a "credits cost table", providing an overview of how credits actually translate into actual API calls. Many file conversion APIs use a one-to-one rate for making API calls, while others cost 2, 3, or even 5 credits per each API call. I like this approach to defining API costs, and when your API developer account includes a API for monitoring account levels, it starts getting us closer to the API pricing standardization, and the automation we will need to continue the growth of the API economy.
I’m finding a lot of individual API monetization stories as I go through this latest round of research. I’m thinking I will have to spend a couple of weeks in February or March of 2015, step back and look at the monetization strategies of the 700+ companies I’m tracking on, and hopefully provide some better analysis of where we stand with this vital layer of the API industry. Along with the work I’m doing to encourage companies to create machine readable API definitions for their APIs, accompanied with machine readable licensing using API Commons, I want to help encourage the standardization of API pricing—then who knows, maybe someday API pricing can be machine readable, allowing us to make real-time decisions on the APIs we use based upon cost.