Ever since the internet became a thing, websites have funded their operations primarily through advertising placed around the content they publish. Unfortunately, this business model is not particularly liked among those browsing the web. It's not just the web surfers who hate this way of doing business either. Many website operators merely tolerate advertising as a necessary evil, something that must be done in order to continue publishing the things people love. So, is it even possible to operate a popular website without running ads alongside the content?
Enter Penny Arcade, home to one of the most popular web comics on the entire internet. Early in its life, it operated solely on the donations of its readers. As it grew, it transitioned to a more traditional ad-based model. Now, the creators want to return to that idyllic era of a user funded site via Kickstarter
. And they're doing it with a hilarious video, showing off their personality (which is always a good way to connect with fans).
More seriously, they talk about why they are considering this form of funding when advertising is the norm:
Would scouring ads from Penny Arcade, with everything that entails, be something you'd be willing to reach into your pocket for? The more we considered it, the more we agreed it might just be. Not only would you no longer have to look at advertising when browsing Penny Arcade, but not having ads would create a chain reaction that would lead to a bunch of other interesting stuff. Without the almighty "pageview" to consider, why not populate the RSS with full comics and posts? Why not enable and even encourage apps, first and third party, for people to read it however they damn well please?
Basically, it frees them up to do a lot of things that advertising has hindered in the past. Think about this. Currently, they believe they cannot offer full comics or articles in their RSS feeds because doing so cuts into ad revenue. They cannot allow the use of 3rd party comic readers because doing so may eat into ad revenue. They cannot offer their fans the experience they deserve because they fear that doing so eats into ad revenue. But if ad revenue is no longer a consideration, all these features (and more) are back on the table. If this Kickstarter succeeds, they will no longer need to worry about making advertisers happy and can focus on making their fans happy.
The campaign is not without its critics, though. In fact, there are already several arguments against what Penny Arcade is doing here. The first argument is the idea that the Penny Arcade crew doesn't really need the money because they are already successful. We have seen this argument made before
. But just like that situation, crowdfunding is not just about raising money: it's a way to connect with your fans and let them get invested in you and your work.
Another common argument is that this Kickstarter campaign violates Kickstarter's own rules. Specifically, critics claim that it violates the rules against using Kickstarter to fund ongoing projects, or projects without an end. This might seem like a good argument against it, but if it truly did violate Kickstarter's guidelines, it wouldn't have been approved. Additionally, Penny Arcade is producing a product with these funds. They are producing a year's worth of content that would not have been created without it. So, there is a product goal here.
Something else that isn't quite a complaint about the Kickstarter campaign but more of a sustainability question is that of non-paying readers. This campaign is not just a benefit for backers. All changes made to the site and its operations will be available to all readers. Some claim that because of this free-rider problem, the ability operate under this model is not sustainable in the long run. However, we have seen many areas where this is not the case. On Twitter, Gabe compared this campaign to that of NPR fund-raising drives
. We know that the vast majority of public radio listeners do not pay at pledge time, but the stations are still able to raise the majority of their funds from those who do. Another great example comes from free-to-play video games, in which the majority of players will never spend money. Many of these games are still able to make a profit operating this way.
Regardless of the complaints, this is a really bold move for any major brand to make. If they succeed in raising all the money needed to run ad-free for a full year, we will be able to return in a year's time and gauge its success. If they don't succeed, then it will be business as usual and we will have to watch for further funding experiments. Hopefully, we will see the former and that success will spark a new wave of advertising-free content publishing.
At the very least, this is a reminder that we're seeing new business models pop up all the time. Some people claim that advertising is "the only" business model online, but clearly that's not true. That doesn't mean that this or any particular Kickstarter campaign will always succeed -- but that's true of any business model. What Kickstarter allows, however, is the rapid prototyping of a business model like this, and that's really disruptive.