Buy out penny arcade for a year, only one cool million dollars...
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Dave
Staff member
I’m not going to write a prologue to this rant. If you want the details on what PA is doing, visit their website, read the beginning of this thread or visit their Kickstarter page.
I will, however, set the stage with my limited and probably incorrect understanding of their business structure. PA is a media company made up of three separate and distinct business units: Penny-Arcade proper which would include the comic, the Penny Arcade Report, Trenches, the website, forums and merchandise, PAX the gaming expo ran by David Coffman and Child’s Play, their gaming charity administered by Jamie Dillon. PAX and Child’s Play can be considered self-sustaining, in that the income generated by the activities exceeds the expenses. There is concern that portions of Child’s Play are used as revenues towards Penny Arcade proper which I won’t get into, and PAX absolutely does support parts of Penny Arcade which I don’t think is entirely a bad thing for reasons again I won’t get into.
The Kickstarter project goals, as outlined currently, are to replace the ad revenue currently used to support the site consisting of two unintrusive ads seated at the top and the right hand side of their main screen. These ads usually feature some artwork designed by PA and the games themselves are usually held in high esteem by the PA staff. The ads run over pre-specified campaign lengths I would venture range between 2 weeks and a month in length. The ad revenue, according to Khoo, could be replaced by a Kickstarter that brought in between $250,000 and $1,000,000 per year. The replacement of the ad revenue with Kickstarter revenue would mean that the sales force tasked specifically with generating ad interest could then be tasked with project/creative work.
PA hopes to follow a similar model to NPR, yearly donations by patrons, absolving PA from any corporate pressures in their advertising, focusing the media portion of the company on generating content instead of generating business.
Issues:
1) NPR isn’t solely supported by donations.
Individuals make up only 39% of NPRs revenue stream. Corporations provide 17%, various levels of government provide 16% and foundations, universities and grants make up the bulk of the rest. Ignoring the fact that NPRs individual revenue stream has actually shrunk year over year, NPR is also a historical organization with a tremendous amount of volunteer support that works in concert with its funding drives to keep it running. The volunteers don’t support NPR because of the content, they support NPR because of the ideal behind ‘free’ public radio. PA is a for-profit media business.
2) You aren’t donating to PA, you are subsidizing PA.
To get semantic, a donation is a gift for charitable purposes. Putting money into Kickstarter for PA isn’t a donation that will allow PA to survive, it’s a subsidy that will allow its ad people to focus on producing content. Looking at the value of PA, you have Mike’s artistic ability, Jerry’s writing ability and Ben’s writing ability with PAR. The ad people who I’m sure are very talented in their own right are the benefactors of the Kickstarter in that they are ‘freed’ to pursue other opportunities. Back to the initial analysis of their business model, I suspect that the ad people sell Mike’s services for the ads that appear on the site as a value-add. If the ad people no longer have to worry about ads, Mike no longer has to draw ads and can now focus on projects he enjoys; leading back to the original point. You are paying so that Mike doesn’t have to do work he doesn’t enjoy, analogous to bailing out the banks so they don’t have to worry about their capital adequacy.
3) Kickstarter wasn’t made for “Support my Life” drives
I have no intention to go into too much detail on this point other than to point you to Kickstarters Project Guidelines:
1. Funding for projects only. A project has a clear goal, like making an album, a book, or a work of art. A project will eventually be completed, and something will be produced by it. A project is not open-ended. Starting a business, for example, does not qualify as a project.
As Mike and Jerry have both explicitly said the intention if this succeeds it will be a yearly goal.
4) It cheapens Kickstarter’s Brand
Kickstarter has bent their rules a little to allow PA to use KS for this purpose. In doing so, it has undermined in a very public fashion both its purpose and its mission – to provide a ‘kickstart’ for projects that would not have ordinarily succeeded without the crowdsourcing function that Kickstarter provides. What comes as a surprise to some people is that Kickstarter makes 15% off of each Kickstarter, so there was a monetary reason for why they’d want to approve a potentially large kickstart like PA. Unfortunately, what was originally perceived as a tool for philanthropy or business development now can be labeled simply a money-grab for Kickstarter.
5) It underscores the fact the PA guys don’t understand their brand.
A quick definition: Brand is how people perceive you, branding is how you wish people to perceive you. For the longest time, PA was ‘the underdog’, mocking those on high for silly decisions, tearing apart quite vociferously the fiscal machinations of large companies who had little regard for their customers. And a lot of their support from the community came about because of this ‘knight in web armor’ ability to effect positive change by virtue of their position and multitude of fans. This brand empowered the support of disaffected consumers; a simple post about one game could either guarantee success or utterly destroy. And as that power grew, it emboldened the more vocal PA staff (Mike) to push more and more into an ‘attack ‘ mode. With Kickstarter, PA may have thought that they still were the small guys who could depend on donations in order to survive. Unfortunately, they aren’t the small upstarts anymore, they are the EA of webcomics, with a relatively large contingent of paid staff and several ongoing projects that require their attention. PA isn’t a webcomic anymore, it’s a business, despite their protests otherwise. For PA to use Kickstarter as their funding stream is no different than Activision crowdsourcing Call of Duty 5.
6) Justifying the use of Kickstarter has taken over the messaging of using Kickstarter in the first place.
I’m just going to copy and paste tweets here from various players at PA.
Robert Khoo @rkhoo
Fail or Succeed, our readers are the best. The potential implications of the move for all content outlets is very exciting to me.
Mike Fehlauer @mikefehlauer
The furnace of the ad model consumes time and creative energy that could go toward creation and expansion of original PA content.
BenKuchera @BenKuchera
@JimSterling That's the entire point, not worrying about ad sales or space is going to allow for more content. It's an additive thing.
7) This isn’t 2000. The dot-com bubble popped.
If this kickstarter succeeds and it is run again next year, will the same people be expected to put up money? Will there be enough interest from other parties to continue kickstarting without relying on a small, but dedicated group of fans to continue their support? If we assume that at the end of 2013, the 2014 funding kickstarter didn’t succeed and ads appear all over the PA site again, what will subsidizers have gained through their cash? A website that caters to their needs? No, the site will continue to operate as it has been. The PA group won’t be beholden to their customers any more than they were beholden to their advertisers – except now those customers control the funding directly as opposed to being the indirect product. And customers are fickle; employment is high especially in the tech sector – your fanbase doesn’t have the dollars to throw at a nebulous concept. Or at least your mature fanbase doesn’t.
8) Additional comics should be run as their own Kickstarter
We’re hearing some ideas around short issue comics like Automata. Wouldn’t it have been wiser to run Automata as its own Kickstarter to gauge interest in the comic versus PA as a whole. It’s a bit of market research that most companies pay hundreds of thousands of dollars for, but PA would have been paid to do it. Instead of incrementalism, they’ve jumped into infantilism: the demand for everything, right now. There is no accountability for any of these extra projects rolled into the greater good of an ad-free PA site.
I will, however, set the stage with my limited and probably incorrect understanding of their business structure. PA is a media company made up of three separate and distinct business units: Penny-Arcade proper which would include the comic, the Penny Arcade Report, Trenches, the website, forums and merchandise, PAX the gaming expo ran by David Coffman and Child’s Play, their gaming charity administered by Jamie Dillon. PAX and Child’s Play can be considered self-sustaining, in that the income generated by the activities exceeds the expenses. There is concern that portions of Child’s Play are used as revenues towards Penny Arcade proper which I won’t get into, and PAX absolutely does support parts of Penny Arcade which I don’t think is entirely a bad thing for reasons again I won’t get into.
The Kickstarter project goals, as outlined currently, are to replace the ad revenue currently used to support the site consisting of two unintrusive ads seated at the top and the right hand side of their main screen. These ads usually feature some artwork designed by PA and the games themselves are usually held in high esteem by the PA staff. The ads run over pre-specified campaign lengths I would venture range between 2 weeks and a month in length. The ad revenue, according to Khoo, could be replaced by a Kickstarter that brought in between $250,000 and $1,000,000 per year. The replacement of the ad revenue with Kickstarter revenue would mean that the sales force tasked specifically with generating ad interest could then be tasked with project/creative work.
PA hopes to follow a similar model to NPR, yearly donations by patrons, absolving PA from any corporate pressures in their advertising, focusing the media portion of the company on generating content instead of generating business.
Issues:
1) NPR isn’t solely supported by donations.
Individuals make up only 39% of NPRs revenue stream. Corporations provide 17%, various levels of government provide 16% and foundations, universities and grants make up the bulk of the rest. Ignoring the fact that NPRs individual revenue stream has actually shrunk year over year, NPR is also a historical organization with a tremendous amount of volunteer support that works in concert with its funding drives to keep it running. The volunteers don’t support NPR because of the content, they support NPR because of the ideal behind ‘free’ public radio. PA is a for-profit media business.
2) You aren’t donating to PA, you are subsidizing PA.
To get semantic, a donation is a gift for charitable purposes. Putting money into Kickstarter for PA isn’t a donation that will allow PA to survive, it’s a subsidy that will allow its ad people to focus on producing content. Looking at the value of PA, you have Mike’s artistic ability, Jerry’s writing ability and Ben’s writing ability with PAR. The ad people who I’m sure are very talented in their own right are the benefactors of the Kickstarter in that they are ‘freed’ to pursue other opportunities. Back to the initial analysis of their business model, I suspect that the ad people sell Mike’s services for the ads that appear on the site as a value-add. If the ad people no longer have to worry about ads, Mike no longer has to draw ads and can now focus on projects he enjoys; leading back to the original point. You are paying so that Mike doesn’t have to do work he doesn’t enjoy, analogous to bailing out the banks so they don’t have to worry about their capital adequacy.
3) Kickstarter wasn’t made for “Support my Life” drives
I have no intention to go into too much detail on this point other than to point you to Kickstarters Project Guidelines:
1. Funding for projects only. A project has a clear goal, like making an album, a book, or a work of art. A project will eventually be completed, and something will be produced by it. A project is not open-ended. Starting a business, for example, does not qualify as a project.
As Mike and Jerry have both explicitly said the intention if this succeeds it will be a yearly goal.
4) It cheapens Kickstarter’s Brand
Kickstarter has bent their rules a little to allow PA to use KS for this purpose. In doing so, it has undermined in a very public fashion both its purpose and its mission – to provide a ‘kickstart’ for projects that would not have ordinarily succeeded without the crowdsourcing function that Kickstarter provides. What comes as a surprise to some people is that Kickstarter makes 15% off of each Kickstarter, so there was a monetary reason for why they’d want to approve a potentially large kickstart like PA. Unfortunately, what was originally perceived as a tool for philanthropy or business development now can be labeled simply a money-grab for Kickstarter.
5) It underscores the fact the PA guys don’t understand their brand.
A quick definition: Brand is how people perceive you, branding is how you wish people to perceive you. For the longest time, PA was ‘the underdog’, mocking those on high for silly decisions, tearing apart quite vociferously the fiscal machinations of large companies who had little regard for their customers. And a lot of their support from the community came about because of this ‘knight in web armor’ ability to effect positive change by virtue of their position and multitude of fans. This brand empowered the support of disaffected consumers; a simple post about one game could either guarantee success or utterly destroy. And as that power grew, it emboldened the more vocal PA staff (Mike) to push more and more into an ‘attack ‘ mode. With Kickstarter, PA may have thought that they still were the small guys who could depend on donations in order to survive. Unfortunately, they aren’t the small upstarts anymore, they are the EA of webcomics, with a relatively large contingent of paid staff and several ongoing projects that require their attention. PA isn’t a webcomic anymore, it’s a business, despite their protests otherwise. For PA to use Kickstarter as their funding stream is no different than Activision crowdsourcing Call of Duty 5.
6) Justifying the use of Kickstarter has taken over the messaging of using Kickstarter in the first place.
I’m just going to copy and paste tweets here from various players at PA.
Robert Khoo
Fail or Succeed, our readers are the best. The potential implications of the move for all content outlets is very exciting to me.
Mike Fehlauer
The furnace of the ad model consumes time and creative energy that could go toward creation and expansion of original PA content.
BenKuchera
7) This isn’t 2000. The dot-com bubble popped.
If this kickstarter succeeds and it is run again next year, will the same people be expected to put up money? Will there be enough interest from other parties to continue kickstarting without relying on a small, but dedicated group of fans to continue their support? If we assume that at the end of 2013, the 2014 funding kickstarter didn’t succeed and ads appear all over the PA site again, what will subsidizers have gained through their cash? A website that caters to their needs? No, the site will continue to operate as it has been. The PA group won’t be beholden to their customers any more than they were beholden to their advertisers – except now those customers control the funding directly as opposed to being the indirect product. And customers are fickle; employment is high especially in the tech sector – your fanbase doesn’t have the dollars to throw at a nebulous concept. Or at least your mature fanbase doesn’t.
8) Additional comics should be run as their own Kickstarter
We’re hearing some ideas around short issue comics like Automata. Wouldn’t it have been wiser to run Automata as its own Kickstarter to gauge interest in the comic versus PA as a whole. It’s a bit of market research that most companies pay hundreds of thousands of dollars for, but PA would have been paid to do it. Instead of incrementalism, they’ve jumped into infantilism: the demand for everything, right now. There is no accountability for any of these extra projects rolled into the greater good of an ad-free PA site.
S
Soliloquy
This is better than anything I could write on the subject. I'm going to go ahead and pretend that I wrote it.[DOUBLEPOST=1342028334][/DOUBLEPOST]
Aren't I smart?
You should open a Kickstarter for content generation!
S
Soliloquy
I'm considering opening a Kickstarter for me shaving my head, so the extra time I'd normally spend worrying about doing my hair can be put towards more productive creative projects.
I'd buy that for a dollar, but travel and lodging won't be included, right?
S
Soliloquy
Nah. And you'll have to pay for my travel and lodging as well.
Not to burst your me, burt shaving your head usually takes more time than grooming it (unless you have longer hair than is usual for a man). I shave my head every oher day and it takes easily 15 minutes to do it properly. Not keeping a beard and shaving everything shaves a bit of time (compared to goatee) but still.
that aside, my personal problem with this KS, besides everything Adam's already said I agree with, is that the ads on PA aren't intrusive/annoying at all. Their own "menu" with smakll bits of trenches etc etc is far more obnoxious; the two ads they have don't bother anyone.
This is just trying to go pay-for-content and hoping people will pay enough to help others as well. Having a separate site for those with and without ads, asking $10 a year for those who don't want ads, would probably get you less money...but it'd be fairer. And it wouldn't be bad for Kickstarter. "Donating" to a team of 15 people isn't a donation, it's a subscription.
S
Soliloquy
Who said anything about maintaining a shaved head properly? That was never mentioned in my Kickstarter campaign.
Good point. Too bad it has to have a finite end, I guess you wouldn't even be allowed to do it to keep your head shaved.
By the rules, it seems to me a KS to "stop smopking" would be perfeclty legal. Maybe I'd better start....Hmm....
Their boardgames suck.
S
Soliloquy
So... Tempting...Haha, anyone notice their mailchimp username and password in the background of their video?
From their updated FAQ:
So their experiment ends in about a day, and they've netted about a half a million dollars. What are they going to do for half a million dollars?
- remove the leader board ad from the front page (not the comic page)
- write a 6 page automata comic
- dress Jerry up (hopefully as yummy chan)
- produce another year of the penny arcade show, but this time fashioned as a reality show for comic artists other than PA
They made out like bandits. So little effort for quite a chunk of change, and they aren't going to be giving up much advertising income, the majority of their funding comes from the ads on the comic page.
Chances a good they won't actually get rid of the leaderboard, though, they'll just use it to advertise their other properties.
I still think its funny that others seem to be unhappy or even angry with penny arcade. It's just another way to sell a product, and if you don't buy it then why get angry that someone else is selling it and other people a buying it?
- remove the leader board ad from the front page (not the comic page)
- write a 6 page automata comic
- dress Jerry up (hopefully as yummy chan)
- produce another year of the penny arcade show, but this time fashioned as a reality show for comic artists other than PA
They made out like bandits. So little effort for quite a chunk of change, and they aren't going to be giving up much advertising income, the majority of their funding comes from the ads on the comic page.
Chances a good they won't actually get rid of the leaderboard, though, they'll just use it to advertise their other properties.
I still think its funny that others seem to be unhappy or even angry with penny arcade. It's just another way to sell a product, and if you don't buy it then why get angry that someone else is selling it and other people a buying it?
It also makes them the smartest and luckiest.
And one of the most productive. It's not like they sit on their asses doing nothing all day. Their whole team works really freaking hard.
But it's hard to deny that the only reason they are so successful is because they found the one guy who wouldn't rip them off when they were starting out. They guy who manages their business deserves a shitload of credit, especially because he took a huge risk just helping them out. I think he spent like a year without a paycheck.
Khoo is the man and they know it.
I'm not gonna lie: I'm a little relieved that they didn't make a million kajillion dollars on the Kickstarter. They made almost double their goal, but compared to other INCREDIBLY successful Kickstarters, like Order of the Stick and Double Fine, it doesn't compare. For one of the biggest, most successful webcomics out there, I'm surprised it only made this much.
But then, I've been against the idea from the start because the idea of Kickstarter is to fund things that ordinarily wouldn't have the money to do it. Double Fine and Order of the Stick didn't have huge money to work with because they were small, independents. Penny Arcade, on the other hand? Stupidly rich, with an incredibly successful business that didn't need to do this. Plus, they made a mockery of previous Kickstarters by offering some incredibly insulting, not very rewarding rewards.
But then, I've been against the idea from the start because the idea of Kickstarter is to fund things that ordinarily wouldn't have the money to do it. Double Fine and Order of the Stick didn't have huge money to work with because they were small, independents. Penny Arcade, on the other hand? Stupidly rich, with an incredibly successful business that didn't need to do this. Plus, they made a mockery of previous Kickstarters by offering some incredibly insulting, not very rewarding rewards.
Also, their pledge rewards sucked pretty hard.
That's what I said in the second paragraph.
So you did!
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