Archive for March, 2010

Here’s one way for newspapers to adapt, by Ted Rall. Enjoy…

The amount isn’t enough to quit my day job, but this, my personal blog, actually brought in some money today. It’s always been a side activity for me, where I write about digital media and news innovation (mostly), and it complements other things I do that do bring in money.

The $65.08 deposit into my Paypal account earlier today came from Kachingle, a networked crowd-funding service that officially launched on February 14. The payout today represents the four months since I signed up as an early beta tester, when money was collected from beta users ($5 a month), and payouts to sites that “Kachinglers” support and visit were tracked. Money started actually flowing out yesterday.

Kachingle kept 20% of my donation total: 10% to support Kachingle; 10% to pay for Paypal fees

I first learned about the company a year or so ago, and became a fan of the idea that you can get online users to voluntarily pay for the content you produce with a system that makes it simple and allows people to support all of their favorite sites and blogs, not just your single site.

In other words, unless you’re NPR or one of its affiliate public radio stations, the “tip jar” or “begging” model doesn’t stand much chance of success done solo. The demise of TipJoy, a convenient service that hosted online tip jars on websites and blogs, points to that truth.

Lots of people in the digital-media and traditional-media worlds pooh-pooh the idea that Kachingle or a similar service (e.g., its competitor, Flattr.com) can bring in anything more than pocket change. A friend who I consider a media guru some months ago told me, “I just don’t understand your enthusiasm” for the Kachingle model, where online users join Kachingle, agree to have $5 a month charged to their credit card, then do nothing except visit the sites and blogs they like — clicking one time only when they see a Kachingle “medallion” on a site they like to initiate some of their $5 a month going to the site.

I hope my skeptical guru friend will be proved wrong.

One modest payment proves nothing, of course, but the amount is more than I expected during the beta period. And I’ve been so busy lately that I haven’t even blogged that much, so my blog traffic has been low (and earning money from Kachinglers is dependent on them visiting your site or blog). Looking at my Google AdSense earnings from this blog, for comparison, I note that the monthly figure is usually in the low one-figures.

While I have no expectation that Kachingle is going to send me large amounts of money each month, I do want to experiment and see if I can get it to work well for me. And if my little solo blog can bring in some money, then it might just give hope that the networked crowd-sourcing model has potential.

Kachingle’s founders have suggested that a good strategy for me is to ask friends and colleagues who produce websites and blogs on the same topic as I do (digital media and media trends) to sign up for Kachingle, and if they do so and “Kachingle” my blog (so I get some of their money when they visit SteveOuting.com), then I’ll agree to “Kachingle” them back (so they get some of my money when I visit them). I like that idea, and plan to do that as soon as I get a little free time.

Their advice is in line with the reason that they (and I) think this networked crowd-sourcing model can work: the social component. If you see that I’m earning money from this, then you might sign up in hopes of making money for your own site, and you might “Kachingle” me so my earnings will go up.

Founder Cynthia Typaldos recommends that for a local news website to get Kachingle numbers to take off, a good strategy is to encourage community leaders (e.g., the mayor, members of city council, etc.) to join Kachingle and then “Kachingle” the news site, as a way for them to demonstrate their support for the news organization’s work. Then as readers click the Kachingle medallion on the news site out of curiosity, they’ll see names they know who are financially supporting the news site via Kachingle. In theory, lots more people start Kachingling and everyone in the network (that is, who are producing good content) starts earning more.

I’ve never paid much attention to monetizing this blog, other than the simple step of adding AdSense. Others take it more seriously, such as venture capitalist Brad Feld, whose popular Feld Thoughts personal blog has a high readership (much higher than mine). While he’s stopped now, Feld for years experimented with different revenue sources for his blog (to see if they’d work; and sometimes they were from companies he’d invested in), and I know from past conversations with him that some of the ad and affiliate programs he’d added to Feld Thoughts brought in enough money to make the effort and webpage space lost to them worth it. (Hey, Brad, add a Kachingle medallion to your blog and I’ll “Kachingle” you!)

I still have a sense that this model can take off. We’ll see. I do know that individual tips jars on sites and blogs won’t be worth much; ask the Miami Herald.

(Disclaimer: I first ran across Kachingle when it was under development and wrote about it when I was an Editor & Publisher Online columnist (which I no longer am). In recent months I’ve served as an occasional advisor to the company and have a very small stake in it.)

Queue up the “eBay Song” by Weird Al Yankovic. … An eBay oddity landed in my inbox today in the form of a Google Alert e-mail that I have set to watch for when my name turns up in articles, blogs, etc. Included was a link to this page on eBay where an online bookseller has two copies of my 1996 trade book, “Newspapers and New Media,” for sale with a Buy-It-Now price of $118.64.

The amusing thing to me (well, actually, it’s just sad) is that the small advance and piddling royalty checks I received over the years from the publisher for that thin (67-page) title made it, I think, the single project in my past with the lowest payout per hour of work.

Thanks, Google Alerts, for reminding me of an ancient bad career decision. … It’s amazing, isn’t it? The crap you can buy on eBay?

Recently, I’ve been noticing new iPhone apps coming to market that are adopting interesting business models. Generally, they can be categorized as using the “freemium” (or semi-freemium) model; i.e., they give away some valuable content and entice you to upgrade for more and better features.

1. This American Life iPhone app. … This app costs $2.99 to purchase, and what that gets you is well worth that small amount of money if you’re a fan of the public radio show (as I am):

• All of the This American Life radio broadcasts from the most current to the program’s beginning in 1995, which are streamed to your phone. (In other words, you need to be in range of a cell-phone tower or wi-fi network.)
• Easy search for old programs, including by contributor (e.g., David Sedaris, John Hodgman, et al).

The premium part of the model is if you would like to “own” any episode. You can download any program to your iPhone or iTouch (via Apple’s iTunes) for 99 cents, which you might want to do for a favorite episode to keep, or if you want to listen to several episodes on a car trip where you’re not likely to experience quality (or any) streaming.

This app is a great example of selling an app for a modest one-time fee, but also having a recurring revenue stream from the app. In this case, This American Life can make money from it’s 15-year archives with no work involved other than promoting the app to iPhone/iTouch owners.

2. Sports Illustrated Swimsuit 2010 iPhone app. I only downloaded this app to my phone to look at the business model, not the female models. Swimsuit 2010 is a mobile version of the infamous SI annual Swimsuit issue of the magazine, featuring photos and videos.

This is a full-on freemium app, since it’s free to download to your iPhone/iTouch. That gets you only the basics: single swimsuit photos of several (but not all) SI models, and several 1-minute videos.

SI (and Apple) will get your money if you want more. (No, I did not pay for the upgrade.) For $1.99, paid from within the app, it is upgraded to see multiple photos of all the swimsuit models, and all the videos.

Which model (business, that is) should you choose: Free download with paid upgrade from within the app? Or paid download with much more given away free, but upgrades still sold within the app?

I think it depends on your audience. This American Life is a great radio program with a small but dedicated audience. SI’s controversial annual Swimsuit Issue is a mass-market offering worth $1 billion-plus in revenue for the publisher.

It’s in SI’s interest to get the limited app on as many phones as possible, and hope that lots of them will spring for the $1.99 upgrade. (A few days ago, the Swimsuit app was seeing a 7.8% paid-upgrade success rate.)

For This American Life, its loyal fans are more likely to pay the $2.99 both to show support for the program, and because what you get for that price is pretty darn nice for the show’s fans. (I didn’t hesitate to buy the app when I first saw it promoted.) I’m betting that the show will make more money by asking an up-front fee for the app than if it gave it away free and upsold the content.

For SI, I believe it will make more money giving away the sparse free app and selling upgrades than if it tried to charge an upfront fee for the app.

I’m not sure that we’ll ever know in these two cases, but I’d like to see some research on most-lucrative mobile app charging strategies for content. Indeed, I hope to be doing that at the Digital Media Test Kitchen at CU-Boulder before too long. (Hint, hint… need funding.)