Penny Arcade Sells Out | Hacker News Reader

Penny Arcade Sells Out

kickstarter.com

168 pointsgilrain102 comments

This is interesting territory for Kickstarter. They've been clear throughout that they'd like to fund specific, time-limited projects, e.g. someone producing a book, and don't allow general fundraising to operate a business, e.g. raising funds to pay a year of salaries and rent for an ongoing business.

There's a way you can squint and call this a specific project, a time-limited "remove ads from PA for a year" experiment. But it sure looks like it's getting close to that raise-general-funds line that Kickstarter claims to not want to cross. In particular, the "costs" of the project that are being funded are entirely notional opportunity costs (foregone revenue), not actual expenses, whereas KS claims to be oriented towards raising funds for actual expenses that are needed to complete projects.

I doubt they'll pull this particular one, even if they determine it does violate their ToS, because PA is too high-profile (and, perhaps, because PA has fans known for being somewhat vindictive). But it seems like they'll have to either do something to prevent more of these kinds of Kickstarters going forward, or else just drop that language in the ToS and agree that anyone can use KS to raise a year of operating funds for their business.

If you need costs to justify it, they need to pay the salaries of their employees and all the other costs involved in running a business. Only real difference I can see between this and, say, the Double Fine Adventure, is that Penny Arcade is a pre-existing product and the Double Fine Adventure isn't.

That's precisely the distinction that Kickstarter claims to be making, though: they'll fund new projects, but not ongoing business expenses.

They said they won't fund life expenses. That's a bit different. Though it is a somewhat fuzzy distinction to be making.

So KS wouldn't applicable to Dwarf Fortress?

Perhaps not if it was worded support DF development for a year but perhaps if it was reworded pay for the development of a tightly integrated graphical interface for DF[1] then it sounds like a distinct project with clear objectives. Perhaps the developer was planning to do this work anyway but pitched as a project I believe its well within KS territory.

[1] example only

I think of this as a Kickstarter to pay for a year's worth of comics. These guys keep a schedule of three comics a week, and they're offering to do that in a novel way. They also have some stretch goals as well of things they'll do instead of dealing with advertisers.

It doesn't seem all that novel to me. They're just changing the source of their revenue from ads to Kickstarter.

You could argue that this lets them be freer with their art and writing, since they won't have to worry about offending their advertisers, but has that ever been an issue for them in the past? (The closest thing I can think of would be the Strawberry Shortcake comic, but that wasn't an ad-related issue.)

> I doubt they'll pull this particular one

As I understand the process, applications on Kickstarter go through a screening period that can take weeks. You're right that this "project" is on the borderline of the site's intended use, but I think if they didn't judge it appropriate we'd never have even known it existed.

"Takes weeks" seems high. As a data point, my May Kickstarter submission was approved after 27 hours.

But your point is true--Kickstarter almost certainly approved this project before it launched.

Looks like the arts patronage is back.

People often ask what there could be instead of copyright, and patronage is one of the options.

Besides targeted donations like this, you could have a general fund (restricted geographically, or worldwide), and pay a portion of it out based on viewership.

Anyone who donated anything at all to the fund gets to go to the performance/movie/play/circus, etc. They count how many viewers they had, then they get a proportional amount.

In exchange they don't claim copyright, only moral rights.

To encourage donations people above certain funding levels get extras, like backstage visits, lunches, public thanks, etc.

So under the pay-proportional-to-viewship model, artist A runs an intimate orchestral music performance and 10 people donate $100 each (because hey, orchestras are expensive to run); and artist B runs a punk performance in a warehouse where 1000 people pay £1 each. Under your model, the punk performers would make $1980 and the classical performers would make $20 - right?

Under this model yes, but no one said this was the only possible model. It's an idea, not a fully fleshed out proposal.

First, people can give directed donations if they like.

There would be multiple funds, so presumably the funds would differentiate based on genre. And people would sign up for the funds that have the type of entertainment and art (or even lectures) they prefer.

Everything here is completely voluntary. The funds would act as agents, and advertisers.

A fund would attract a performer based on how good a job the fund does on getting that performer an audience. A performer would attract a fund based on how happy people are with the performer. People would sign up with a fund based on the quality of the performers.

So if a performer is not happy with his cut of the donations they would find a different fund. If a fund is not happy with how many people are donating they would try to find better performers. And if the donors are not happy with the types of shows they would find a different fund.

So the incentives are all aligned properly. (As long as people are actually willing to donate.)

It would probably require some fine tuning to get it right. In particular there is a strong network effect, and positive feedback (the larger you are the larger you get), so this will have to be toned down somehow.

This is sort of like a subscription model, but for live events. This could of course be done while maintaining copyright, but the whole idea is to find an alternative to that.

It seems to me that you have introduced an unnecessary third party to the problem (the agent) that holds the same power and position as the current problem party in the copyright arena (the publisher/label). The interesting development in recent years has been the removal of this party from the equation (self-pub ebooks, kickstarter etc.) so it would be a shame to bring it back.

I would solve that by either not allowing exclusive contracts (so a contract is only for a specific performance) or by limiting all contracts to a maximum of one year.

I would also legislate that all agents get the same percent of the donations as fees. Not sure how much, but under %25. By not having to negotiate this part of the contact agents would be motived to compete on quality - things like how often they would advertise, how good the venues they could get, etc.

Interesting take on the crowd funding issue.

I expect to see more of these sorts of creative things. Advertising debt is annoying. And sadly people like PA with their 2 ads get nailed because people have been so massively inundated with ads all day that even one more is painful.

Another experiment they haven't tried, but would be good to run, would be to make the site subscriber only with the long tail free. So imagine a site where if you subscribed it was ad free and every few days you got a new comic. There is the 'free' site which is content that is a year old and has advertising on it, and there is a totally free site which has the two years old or later and its got no ads on it.

Of course its not as useful for topical content but its an interesting experiment.

Unfortunately for PA, their content is probably 90% games/pop culture topical. After a month it'd be completely stale and irrelevant (with exceptions of course).

I think the better move would be to have pay users not have to see any ads. Simple web re-design to remove that for pay users, otherwise free users still have to look at the ads. There are a ton of sites that do this and are quite successful.

Their goal is to redirect the people they have handling advertisers into projects for creating new content. Also, Mike tweeted (http://twitter.com/cwgabriel/status/222718794798350336) "I don't want to spoil some of the un-lockables but if we aren't making projects for advertisers we are free to make projects for you."

They clearly want to stop spending effort on ads altogether and spend it on new content for their readers, instead.

I recently went through the comics archive from about 2004 until now. The comics still resonated, and I found myself frequently checking the blog posts to see what Tycho had said that day. While it was often about old events, it certainly wasn't stale or irrelevant to me.

What's a site that only offers "no ads" as their paid-upgrade benefit? I haven't seen one offer just that, it usually comes with a grab-bag of other features that can't be replaced with a client-side script/extension. (DeviantArt's premium account is the upgrade I thought of. (http://sta.sh/047k5sokcr2) The two major client-side features of no ads and more thumbnails are solved with NoScript and AutoPager respectively.)

Off the top of my head, Wowhead offers an ad-free version for premium customers. I guess you also get custom forum avatars for being a premium customer.

The point is, free site that is ad-supported but those go away with a membership - whether you get extras or not.

The Facebook version of Words With Friends sells a 'no-ads' premium pack, but admittedly that's a bit of a different scenario as the ads are in-game modal dialogs that can only be dismissed after X seconds.

They are insinuating that there will be more content/side-projects when they don't have to worry about the commercial side of their business.

Judging by everything I have read, listened to, and watched of them over the past decade, I think they would have zero interest in any model where people only get content if they pay.

Back when I read PA I remember them saying that they were careful about who they let advertise on their site. Seeing a game advertised there was almost a tacit endorsement of it, and I'm not really sure removing those ads is in the readers' interest.

Aside from Google searches when I actually wanted to buy things, Penny Arcade had the only ads I ever looked at with actual interest.

(There's also the fact that if anyone is seriously bothered by the ads they're probably already blocking them themselves. I think people donating here are doing it to "give back", not because they actually care about the advertising.)

What's wrong with the lwn model of subscription? Don't subscribe and you get info a week old (lwn is a 'current affairs' site like PA is, hence time-dependent), subscribe a small amount and get your benefits.

https://lwn.net/subscribe/Info

The kickstarter thing for a year's business costs are basically an old-fashioned subscription drive - who wants to see brand-name websites doing this every year? Welcome to a new form of spam.

I enjoy Penny Arcade. That said, it seems like an awful lot of money for an ad-free website.

Aren't they making enough off of merchandise, their expo, their games, etc., to make the site ad free? From what I understand they are wildly successful (monetarily as well as publicly) so why do they need the public to literally give them money?

My initial reaction was that $1 million seemed low to replace their advertising revenue for a year.

I don't know the site statistics, but they have a large staff, and are a very popular site. Gaming/entertainment is a solid area of advertising.

Looking at their site though, they don't have a ton of ads, so I guess that helps explains it. And their primary source of revenue seems non-ads (expo, etc...), and probably see their site as their advertising/lead generation.

In my mind, Penny Arcade was as it started out - two guys drawing comics. $500k each sounded like a lot. I don't know if Childs Play and PAX are a big money sink for them?

From the FAQ:

Advertising paid for rent, wages, health insurance, utilities, all the normal stuff that you pay for when you have fourteen souls working together. That money keeps the lights on while we do the things people expect from us: thrice weekly content drops, two annual shows, the scholarships, Child's Play, etc.

> two annual shows, the scholarships, Child's Play

The shows make money, otherwise they wouldn't do them. By most accounts they make a lot of money. PAX Prime 2011 had 70k attendees (according to Wikipedia) and at $65 a pop that's a hefty (~$4.5 million) in revenue not to mention what exhibitors pay (which can't be cheap for the target audience). They make more than enough money off of this to go ad free.

The scholarships are their problem, the comic reader gets nothing out of those except warm fuzzies.

Child's Play should be able to maintain itself on low overhead and a non-profit status. It should cost them a minimal amount of money and any it does the company can directly write off.

Tim Schafer said “That much money for Pax Prime?” when discussing the budget (more specifically, which non-wage stuff to cut or leave in) for the Double Fine Adventure in the latest episode of the documentary.

Raise the price of a PAX ticket $15 to take a bite out of the scalpers, and boom, $1 million.

At the risk of sounding like Scrooge: I would assume most people think of Penny Arcade as the thrice weekly "content drops" (while viewing the rest as peripheral) and it certainly doesn't take 14 people to draw a comic.

Asking the community for $1 million every single year to draw a comic seems a bit steep.

I'm not saying it's not worth it. I probably will contribute, but it feels like a lot of for a small thing.

>At the risk of sounding like Scrooge: I would assume most people think of Penny Arcade as the thrice weekly "content drops" (while viewing the rest as peripheral) and it certainly doesn't take 14 people to draw a comic.

I get the feeling that they want to change this perception, especially with the recent hire of Ben Kuchera to write full time news and commentary for the Penny Arcade Reports site.

Crap. I don't know if I'm just blind or lazy or both, but I don't think I noticed the top navigation bar that has the PA Report until now (it's really subtle).

Anyway, I think you're probably right.

It's bizarrely under-promoted now, but PA made a big deal when they launched PA Report a while back.

http://penny-arcade.com/report/about

"Asking the community for $1 million every single year to draw a comic seems a bit steep."

Here's the important part though, they're already paying it, and more. That's how advertising works. People buy stuff that's advertised and they pay a higher markup which goes to pay for the advertising which goes to pay for the content.

The only difference is that today it's very indirect. What's wrong with direct support?

They have over a dozen employees, do the math it doesn't work out to a killing for them to have this kickstarter succeed at 250k a year. They could survive without any ad revenue at all just on their other sources of revenue alone, but that's a hard sell when they have so many visitors and doing so might limit what they could do. Make no mistake, almost certainly they are potentially leaving a lot of money on the table by doing this campaign.

This is an experiment. Ultimately the money changes hands the same way regardless, this is just a test to see if it's possible to do it without all the indirection and middle men. Also, for PA this is a fairly low risk activity, but if they prove the model works it could open things up for a lot of smaller web comics and art sites.

On the webcomics front, the Keenspot Twokinds strip just recently did a successful drive for 8x the asking rate :

http://www.kickstarter.com/projects/twokinds/twokinds-book-p...

The artist is now quitting his job and doing the comic full time with the kickstarter money, and is making a book. There is a lot of potential in crowdfunding!

If they say that's what they need to fund the site, then fine. From my own selfish consumer perspective, though, the amount of money they're asking for and what I would gain from it just aren't proportionate.

But you aren't being asked to front the full $1 million. The lowest amount is $1.

For $500, they will retweet one of your tweets "within reason".

Wow, put me down for TWO!

The rewards are totally lame, and insanely priced. I love the comic, and really it's not worth a dollar of mine to remove the ads I don't even look at. The Kickstarter goal doesn't even remove the ad from the Comic page.

Most people are going to donate less than $200 and the people that will donate will do it because they love the site, not because they're looking for swag. I've been reading PA since 2001 and aside from buying a t-shirt, have been entertained 3 times a week for over a decade for free, aside from the inherent value of my eyeballs. If I toss them some cash it will be because I love the site and because I want to support what I regard as a really awesome company, not because I demand they give me more stuff.

You aren't really paying to remove the ads.

There's a couple of comics I'd like to see on Kickstarter this way, because I wouldn't mind tossing them some bucks, but all they have are merchandise (which I've already bought) and PayPal links. Sorry, no, no PayPal. I wouldn't really care about the rewards, I've already received them.

I'm curious: why no PayPal? Unless I'm misreading your tone it sounds like you're pretty adamant about NOT supporting a comic through PayPal. Why?

With a somewhat large number of people, PayPal has a bad reputation as being somewhat unscrupulous, especially when the person being screwed over isn't famous. You could find horror stories fairly easily with the Google.

Myself, I use it because people use it, and stick to the practice of never keeping any money in my account, or never expecting that money to actually make it to my bank account.

I'm not interested in using PayPal again, and my desire to support the comics does not rise past that threshold. Wouldn't call myself "adamant" about either, but I definitely do not wish to use PayPal.

Fair enough - I appreciate the explanation. Thanks.

The new kid was an interestingly drawn strip and it would be nice to see it brought back to life.

Or even just see gave come up with more crazy DnD settings.

Not likely, as they've sold the movie rights.

Ah yes, I had forgotten about that.

Yeah, for $10,000 they'll buy you lunch, but not fly you to Seattle. What's up with that?

On the contrary, PA is one of the few sites that maintains an ad quality that means I actually do click on a large percentage of the ads there.

From the top of the Kickstarter page:

>"People often want to know how they can support the site in a way that doesn't involve t-shirts or looking at advertising, and I think we may have a way."

The kickstarter rewards aren't something you're buying, per se. You're donating money and getting a wink and a nod from the PA guys.

Yeah. I don't see any reason why somebody would ever want to get a tweet sent out to 90k+ dedicated gamers. I just can't seem to come up with a case where that would be a really great use of $500...

I really really wish the flattr model would take off for stuff like this. Each and every site having a huge fundraiser once a year like this seems unsustainable.

It works for public television.

It works because you have only one public television organization in your town.

Conversely, only one public television organization was worth continual year after year funding.

There are many listener supported radio stations in single markets. e.g. WBUR, WGBH, and WBAI in Boston.

I live in a town with 4 separate listener supported radio stations.

Flattr won't work for the same reason as every other tipjar system has failed. It imposes a transaction cost on the tipper -- "is this work the click?" -- that users simply don't like.

My current startup work is aimed at avoiding that cost entirely.

> It imposes a transaction cost on the tipper -- "is this work the click?"

Since you have a set monthly amount that's just split up among your clicks, I don't see how that's true. You can click on every single site you browse to and it'll just split up your $15/mo "web budget" thinner and thinner among the sites.

That doesn't remove the transaction cost at all. It still requires you to actively decide to click.

How is this a "project"? This sounds like crowdfunding on-going business costs.

Weird, I never minded the ads on PennyArcade. They were usually cool games or at least gaming related merch. It was clear they didn't let just anything on there...

An internet without ads would be amazing.

A $45 billion kickstarter for 2013 should do the trick for the US market.

I'll link you to adblock for $44 billion and 50 cent.

In fact, let me write up a kickstarter proposal.

I lol'ed ;)

But in seriousness, an internet without ads is about way more than just not seeing banner ads. Penny Arcade puts it very well:

"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?"

I recognize that and I think it's an interesting question (and translates well to all the "twitter is screwing its app ecosystem again" drama), but the way Penny Arcade are going at it is a kickstarter project where they're effectively selling the privilege of not seeing ads for $250k a year. There is competition for that niche, and I think PA would have done well to actually over a product for what they're asking.

The penny arcade guys aren't exactly here as business men. Hack when they finally got someone on board to mange their site he was shocked that they nearly got bought twice, and that they still barely had an idea of how their income worked.

I think they are appealing to their community, and people who find stuff like child's play, pax and the rest to be great.

I want the online content I like to be able to pull revenue.

Honestly, those I know who read PA don't find it annoying. Those who do, have an AdBlocker.

(While I am anti-AdBlocking software, that is a conversation for another time.)

Somebody really needs to make a startup where, when you visit a page, you can either view ads, or opt out by paying a really teeny tiny amount of money. (And where you can set it to "always opt out and just pay for my damned content.")

Problem? You can't really charge people tiny fractions of a cent effectively. Solution? Bit... wait for it... coin.

Does that then make somebody with an ad blocker a thief? Because I don't like the sound of that at all.

Why not? It'd be even less thievery than stealing, say, a toothpick from a restaurant, but what's the effective difference?

These days you could simply cover the right side of your monitor with a small piece of cardboard and never see ads again. OR - simply don't look. A part of me thinks non-adword based advertising is going to implode because we are creating a generation of internet users that have been trained through high-use to simply ignore ads.

A solution (e.g. used in newspapers) is to make the ads like normal content (just saying "ad" above in fine print).

(On the other hand, I have trouble reading the webpage of a big electronics store because their whole site looks like an obnoxious ad and is filtered by my brain.. )

Yes. I don't like it either, but you can't have your pie and eat it, too.

I'm working on something very much like that.

Bravo :D

By the way, I think the sweet spot for this is online journalism, where there is a need for very high-quality content, but ads never have been sufficient and never will be. In other words, a way to save our beloved newspapers.

My original source of inspiration was "how do I make money off the blog network I run, and give some money to my bloggers as well?"

The model I have in mind will suit news media, sites like PA, discussion fora like HN and web applications as well. In my draft pitch I say that I am proposing to "reinvent the internet economy" and I feel that I'm only engaging in a modest amount of hyperbole.

That is fabulous. I want to develop a site that shows statistics of a certain kind (won't get into that here), and it would be great if I could charge people a very very small fee to see them. I don't know if your product would suit that need as well.

I was trying to think of helpful suggestions, but couldn't really think of any. The only thing I can think to tell you is that if the business involves bitcoin, you could probably get a lot of loyal early adopters and raise some decent seed funding at http://glbse.com (however, it's a legally gray area right now).

> I don't know if your product would suit that need as well.

Somewhat. If you install my software on your server, you get a portion of money from my user's subscription. I call the model "microsubscription".

As for bitcoin, I'm trying to be as currency-agnostic as possible (not least because I'm in Australia). However I probably couldn't support it right out of the gate because the inter-currency exchange market is not as well developed as it is for major currencies.

For example, suppose I have website X, expecting to be paid in AUD and subscriber Y who wants to pay in bitcoin. At settlement time, it will be hard to find a buyer for bitcoin in AUD, so I will probably have to go through USD first. I'm not hugely keen on that because of the complexity and transaction costs.

I love PA. I hate kickstarter because it is operated in a disorganized manner so I feel like I have been bait & switched.

See comment by "Joseph P. - PLEDGE THIS. "

Penny Arcade's violations of Kickstarter guidelines:

1) This is for an open-ended project 2) The funding covers business expenses 3) The rewards are not produced by the creators

is that the Penny Arcade mailchimp.com password on the whiteboard at 3:10?

Maybe it once was, but it is not the current password (tried a moment ago).

I'm not surprised. if I noticed it while snickering, I'm sure they noticed it before posting and changed it back then. easier to do that than refilm.

I tried to log in with it too and got a "too many bad signins" error. I'd assume people all over the place will be trying, even if it's not their password they've effectively locked themselves out of that account for a while from the stream of people trying. Should have refilmed or blurred it

Can anyone describe the types of people who bid+pay 5 and 10 thousand dollars for these projects? I can't imagine devoting that much money to a playdate at PAHQ or to hang out for the day with the designer of the OUYA. It doesn't seem like real money at that point but I know these peoples' credit cards will be charged. I don't get it...

Well one of the OUYA ones is Notch who's famous for liking to help projects he finds interesting thanks to his own success from minecraft, so for him 10 grand to help something he likes isn't as crazy as for some of us.

And I'd assume anyone doing it for PA are hardcore fans who've loved the site for years and have serious disposable income to hand.

I don't understand what is wrong with advertisement?

Nobody pays attention to them anyway, so WTF?

It takes time and effort _for them_ to keep on top of, as they _don't_ just push any random ads. They'd rather use that time and effort on other things.

I already get it ad free - thanks to AdBlock.

Their site is one of the few where I disable AdBlock. First, it supports a comic and a site which I love, and second I actually like their ads. They have stated they play every game that is shown in an ad, and don't allow terrible games or terrible ads for a game at any price.

Seems like the exact opposite of the standard practice in old-school journalism of strictly separating editorial and advertising staff in order minimize conflicts of interest.

The fact that they are seem eager to get rid of ads makes it seem like worrying about these kinds of thing are at least a constant nuisance.

It read to me more like it was annoying for them. They want to get rid of ads so they can quit spending time writing reports for advertisers/vetting ads, and spend that time working on new content instead.

Uhhhh....Ad Block Plus anyone??

I guess the people funding this project haven't heard of a free browser extension called AdBlock Plus?

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