The Long Haul: Financial Self-Sufficience
Submitted by jim on Tue, 04/17/2001 - 12:37
Tags:
Right now The Listology runs in the red. It costs $100/month in ISP charges to keep it going. I am trying to figure out the best approach for making in financially self-sufficient so it continues to be a resource for us for many years to come. Here are my thoughts:
- Sell advertising space (I hate ads - they are ugly and intrusive and they don't pay well unless you are getting TONS of traffic).
- Rely on donations. It would be great if this could work. But I have several fears . . . maybe only a handful of hardcore fans would subsidize the population at large, or maybe the first round of donations goes well but then it falls of dramatically.
- Make Listology a paid service. Most equitable in that everybody pays to play. The problem is that it will likely stifle new signups.
- Make certain bonus features available to paying users. The problem here is that I don't know what these services would be. Perhaps I close off some of the existing services to non-members (e-mail alerts?)? How do I close off enough services that paying is compelling, but the service isn't so crippled it stifles new signups.
Any thoughts you have as I try to come to grips with this would be much appreciated!
Boy, that is a very tough one, Jim.
I have a feeling ads won't even be a serious option. I just don't see them alone creating enough revenue to run the site. Perhaps they could supplement whatever solution you arrive at.
I'm afraid I am too much of a cynic to believe that donations would also cover the entire load.
As an avid user, I would have no problem paying a subscription fee, but I'm not sure how many other users would.
I'm at a loss. Perhaps a combination of ads, donations, and the last option of premium subscriptions might go some way to reaching the total. Did the Amazon connection on the older site bring in any dough? (No, I wouldn't expect that it brought in a ton, but I am curious if it ever brought in *any*.)
Any other ideas from anyone?
Shalom, y'all!
L. Bangs
Yeah, ads only work if you get LOTS of traffic. Listology gets a decent amount, but not enough for ads to bring in much.
I'm also guessing donations won't cover the load, so I'm leaning towards a subscription model that I'll have to flesh out. I'll post it as an update to the article above when I have something I think it workable.
The Amazon connection brought in next to nothing. I think it was something like $17, and that included a bunch of personal purchases that were erroneously attributed to The Listology (personal purchases aren't allowed under your Associate account). Not counting those, I think the number might be closer to $2.
Thanks for the feedback!
Jim, I think maybe you and I had discussed this before, and maybe you figured it wasn't doable, but maybe licensing the Listology code out to other sites that might want to do something similar? Maybe getting rid of custom genres and let sites put in three main genres.
Like lbangs, I don't know how much you would get the other ways. I do think that subscriptions might be detrimental to new members. What kind of price do you have in mind?
Maybe sueing Amazon for their list idea, if you can prove yours came first? :)
I'd consider licensing The Listology source, but it's kinda specific-purpose for that. Still, I should put a link up somewhere so folks can e-mail me about that. Also, it's hard for me to put a price tag on the source, since I've sunk so many hours into development here.
I agree that subscriptions might deter new members. At this exact moment, I'm toying with the idea of making certain features members-only. So the site would be usable by everyone, but more usable by members. It's a difficult balance to strike. I'll post it once I think I have something workable.
And I think I can make a pretty good case on the Amazon front, but sadly I have no proof. Consider this:
* In 1998 I cooked up the idea of a list-based recommendation service and I did quite a bit of online research looking for an existing service. I didn't find one, so I decided to build one. I named it The Listology and deployed it in April of 1999.
* Around March 18, 2000, after a year of being (from what I can tell) the only member of the list-based recommendations niche, I became an Amazon affiliate.
* Around November 6, 2000 (11/6/00 was the earliest reference I found, in a post by kbuxton), Amazon deployed Listmania, which is pretty much a snapshot of The Listology's raison d'etre (find users of similar tastes according to their lists of bests and worsts in movies, books, and music).
Allowing time for planning and development, it seems like Amazon's Listmania feature must have germinated around when Listology became an Amazon affiliate. That, combined with the fact that Amazon affiliates are screened, leads me to believe that The Listology was the inspiration for Listmania.
Ah well, what can you do?
Hey, Guys! Here's my thoughts...
I, too, would hate to see adverts on this on this site. Donations might cover it and you could always start out that way and then move to a subscription system later...OR...you could become a paid subscription site immediately. Would a nominal fee of $1 a month from each existing member cover expenses for you? Perhaps you could give new members a trial period to get them addicted to the site like us. A month trial and then if they like it they can pay the monthly fee to stay in?
Another idea is if the biggest monetary issue is the bandwidth perhaps you could find a kind local ISP or other Internet philanthropist to donate web space and bandwidth. I've noticed a lot of sites of this nature seem to have hidden benefactors which provide this for them. A simple referring link back to the benefactor usually seems sufficient.
What type of Internet connection do you have exactly?
Listology is at a shared host: here is the link to the specific plan. I chose this plan for several reasons:
* "unlimited" bandwidth - this keep me from having extra costs if traffic goes way up (although I have to assume they'd draw the line somewhere).
* Good Cold Fusion and SQL Server support. I'd found other CF and SQL Server hosting services, but they were all crippled in one way or another, either by not allowing certain tags, or by not allowing full-text searching in SQL Server. The previous version of Listology was written in Perl/MySQL. The two problems here were that I don't know Perl as well as CF, and MySQL has no full-text search, so I had to roll my own.
I asked Rotten Tomatoes if they wanted to be an exclusive sponsor of the site, with their own box off in the left nav. Even sent them a mockup. They didn't write back. Their loss. :-) I will try exploring the sponsorship angle more broadly.
Try NetFlix next! I've been seeing their logo pop-up all over the place lately.
We're of the same mind. I'll ask them soon.
Hey Jim! I like dgeiser's idea of a free trial period. I got addicted pretty quickly, and it seems to me the fee wouldn't affect TL's demographics much. The people who come once or twice and leave would be the same, at least. I for one have no problem paying for the use of this wonderful site!
The only problem I have with this is the unethical folks that sign up for a new trail period under a different account name after their first expires. I think I'm going to explore disabling or limiting certain features to non-subscribers. Will probably take me a bit to flesh it out and implement it though. I'll post details once I dream them up. :-)
Interestingly enough another site I use some had a similar discussion come up today as well.
A Question About Payment. (I don't think you'll be able to access it without joining delphi unfortunately.
One idea I had was that you could sell advertising space but have a way that people that donated money wouldn't have to see them.
I like that idea in theory, but I have a two-part concern . . . First, ads pay next-to-nothing, so I'd greatly prefer folks to subscribe. Second, folks don't really "see" banners these days, so I think it's rare folks would pay just to avoid banners. I'm think I'll need a more compelling incentive. :-)
IANAA (I am not an accountant) but I did grow up in a CPA office. I would suggest digging up any friends/relatives/etc. who have successfully run a small (not nec. tech-related) business and ask them.
I think the first answer you'll get is to cut costs. It seems to me that your ISP is, umm, doing quite well for themselves with your plan. (See my e-mail on that topic.)
Second, look at your assets. I see a *lot* of value here in three main areas:
1) The software that runs the Listology itself
2) The skillset it represents
3) The data
Is it possible you could generic-ize the listology software and sell it? Are there other applications for such a tool? Amazon seems to think so. Coming up with this sort of thing is my bag so I'll ponder this and see what I can come up with.
I'm not sure what you do for a living, but if you're not a professional web designer, you have an incredible talent that isn't being fully used. If you are, perhaps you could view the Listology as a marketing expense? I deduct my web sites on my taxes, letting Uncle Sam pay for nearly half of them. $100/mo is a bit much, but if you can cut that down a bit, it might be reasonable.
And if you don't have a need for such marketing yourself, perhaps there is someone who does? You could add a discreet but noticeable "Sponsored by..." line somewhere. Perhaps your employer (if you're not self-employed)? It wouldn't have to be a complete take-over, but if you cut costs, perhaps someone would be interested in supporting the Listology. How many page views do you serve per month? 1K? 10K? It's got to be a lot. Exclusive sponsorship is worth more than just being one of many banner ads, and can seem philanthropic as well.
Lastly, the data is valuable. Now, I'm rather opposed to the idea of collecting information from people or having people generate data which you then sell, but perhaps something like the slashbox might be of interest to other sites? Would your local bookstore be interested in a Slashbox-type box for their web page listing random book lists? What if you put together a list of the Lists that contained a movie and let a movie theatre include that on their page for that movie? This is a touchy subject, though.
Anyway, I would certainly be willing to chip in. Perhaps you should go ahead and set up a PayPal account?
Thanks for the information! Let me go point-by-point . . .
* My ISP prices may be a bit high, but Edge does have some advantages (see my reply to sebreg above). The only other ISP I've found that might be competitive from a price/features perspective is your recommended service, Pegasus web. Unfortunately, I still haven't gotten answers from them on that series of questions I e-mailed you. It makes me uneasy that they have failed to respond to two separate e-mails asking those questions.
* Regarding my assets, generic-izing Listology might me too much work for me right now. I could still sell the source, but I'm not sure who'd be interested in such a specific codebase, or how much I'd ask (If were trying to recoup my programming hours the asking price would be really friggin' steep :-). As for the skillset, I already get paid at my full-time job to program (and thanks for the compliments!). Between that and Listology, I have very little time for freelance work. Finally, the data - I agree that it's dicey. I'm not sure that I can legally publish it. I might be able to, given that this is a public forum, but I think it might be a legal grey area. I certainly don't think I'm overstepping my bounds by making interfaces to the data public (there is a Listology Slashbox, BTW!), but I'm not sure about taking the content to other mediums.
* I do like the "sponsored by" idea. As I mentioned in another post above, I'll explore that more broadly than I have.
* The Paypal account is up! :-) Rest assured donations will carry over to subscriptions if I go that route.
BTW, WebTrends reports two numbers, and I'm not sure what the difference is. But according to the report Listology does approximately 100,000 "page views" per month, and 75,000 "document views".
Jim, I did a little digging on the Webtrends site. According to their short explanation, Page Views = Document Views + Form Views. Here are the long explanations for the following questions...
What is a Form View?
What is a Page View?
Cool! Thanks for the digging. 100,000 page-views sounds so much nicer than 75,000.
Perhaps I am interpreting it wrong but it seems that document views would be any static pages that don't involved a script and from views would be pages that do involve one. I'm guessing that most of the pages on listology do involved some sort of script hence the heavy discrepancy.
Are you running WebTrends yourself or is it a service of EdgeWebHosting?
Damn, when I am going to learn to proofread?
Edge provides it as a service. I'm not sure what the default configuration is for WebTrends in terms of how it distinguishes between static and dynamic. It mentions that it looks for a question mark for dynamic pages, but a lot of Listology pages deliberately avoid the question mark to fool search engines (which often avoid dynamic content based on the question mark). For example, check out all the links in the "recent updates" box . . .
Well, you should at least set up one of the Amazon Honor system accounts first. It can't hurt. And it might turn out to be enough. I've started sending money to any site I use a lot that has one of the Honor System boxes on it. I've done at least 3 sites so far.
Do you have an estimate how many active users you have right now? It may turn out that $10 a year is enough, not $20. I, personally, prefer a yearly fee to a monthly.
I'm thinking $10/year might be the level to shoot for. My intuitive sense less than half as many folks would subscribe at $20/year. I did set up a PayPal account. Thanks!
Jim, I think you've already got lots of good advice here, especially from UncRoger.
So I'll just say that I think the selling of content idea might work if you treat your content like the porn sites do: give visitors a free tease, but tell them that the best lists (most popular) are only available to subscribers.
Gee, I never thought I'd be a porn star! :-D
Or perhaps make it such that anyone can view, but if you want to be able to post you need to pay
How could I pass up an opportunity to turn you into a porn star? :-)
I'm leaning towards the subscriber option. More to follow on that front...
I know this article is fairly old, but what are you thinking right now about these options? Does Listology still run in the red with advertising?
Wow, last posts here were from '01. Google ads are working out okay, covering about a third the costs. I will probably put in some kind of value-added feature to entice/reward donors, but right now I don't have a good automated system for processing payments, and I'd like to put quite a bit of work into it. Maybe this winter - seems like my programming time is pretty much nil these days (all this darn movie watching!).
I'm thinking the value-added feature would be a more powerful method for keeping up with recent updates. Something like all the stuff you personally haven't seen is stored for you especially, and you can view that stuff by date, user, etc. You can then remove stuff you've seen at will, etc. This way you can ensure you don't miss anything, and you can get at the stuff that's mostly likely to interest you more easily. Still percolating, don't hold your breath. :-)
Wouldn't hurt to poll the Listology population to see what people actually want, and would be motivated to donate to receive..,