The Tip Jar as Revenue Model: A Real-World Experiment

It's been three months since I posted my novel online for the world to read for free, with a tip jar as compensation medium. I think we have enough data now to tell how well it might work for other artists.

• Distribution
• Feedback
• Revenue

Feedback is how the artist learns how well his work was received; knowing that N people saw your work is not the same as knowing that 0.8*N liked it or that 0.5*N think it should be burned. Again, for some artists this is more important than revenue but it might also be more important than mere exposure; the artist might want to feel that he positively influeced the readers, or made them think.

Finally there is Revenue, the question of whether your art can pay the rent and keep the wolf from the door. Most artists would prefer not to focus on this but the circumstances of life often force us to give it top priority.

Distribution

Tracking my distribution is pretty easy since Rusty kindly configured a Webalizer report for the novel directory. Although there is a lot of ambiguity in web statistics we can learn a lot from these data.

As anyone who has ever set up a website knows, simply putting it online does not bring readers. My novel has benefitted from several major sources of publicity:

1. Rusty's Jan 12 introductory article on K5
2. A Jan 14 mention which Rusty solicited on Cory Doctorow's site BoingBoing
3. A Jan 16 comment thread on Slashdot started by readers under, ironically enough, a front page article introducing Cory Doctorow's free online novel
4. A Feb 7 ani-gif banner ad on low-tech left-wing political site Bartcop.com which I bought as an experiment
5. A Feb 21 (drumroll please) front-page review on Slashdot
6. Subsequent blogspace activity, revealed in the referrers or by google search

There is a very consistent trend that about half the number of people who load the index load chapter one, and about half the number of people who load chapter one load all eight chapters. I have used this in some cases to tease results out of the referrer logs.

So taking into account all the fudge factors, I officially and by fiat declare that I have the following readership results so far:

1. From Rusty's intro: about 1,000 readers
2. From BoingBoing: about 100 readers
3. From the Slashdot comment tree: about 100 readers, which is interesting since this was a comment thread beneath a story that sank pretty quickly
4. From the Bartcop ad: about 300 readers
5. From the Slashdot review: about 3000 readers; this might be much higher since Slashdotters were much more likely to load the .zip and /all versions
6. Overall, including all sources: between 5,000 and 10,000 readers

So one could say that MOPI has effectively sold out a typical first printing run for a non-best-selling author. However, this is a little deceptive; the "marketing" I received was very targeted, and benefitted a lot in the beginning from the reputation I have for my other writing on K5. It has also been read all over the world, from Japan to the Netherlands to South Africa to Slovenia. So in many respects I consider this a best-case distribution; most people would not have gotten so much distribution so quickly. It would also be more difficult if instead of a 250K fileset it was a 30 megabyte set of songs.

On the other hand, distribution by regular publication is glacially slow by comparison. If I'd signed a contract with a publisher on Jan 12 I would still be reviewing galleys and the first books would probably be on shelves toward the end of Summer, if that soon.

Feedback

I have received about 200 private e-mails about the book. It's very easy to describe them: They almost exactly mirror the tenor of comments which were posted after Rusty's introductory story.

The particular work at hand was never designed to be "friendly." It is just about guaranteed that any particular reader will find something within it revolting or insulting. In this regard it is very similar to some Indie music which is trying "not to be Pop." The feedback reveals that this work does not appeal to everybody, but it does appeal to a significant number of people a lot.

Because of the way the book is, this is a thing that was hard for me to find out any other way. Before Jan 12 exactly eight people had read it, but that isn't much of a sample size and they all knew me. Now that thousands of strangers have read it I have much more confidence that it accomplishes what I thought it did.

If you peruse the google search you will see a similar pattern. The fact that the K5 comment, e-mail, and blogging response sets are all very similar convinces me that the novel is not riding on my previous efforts or my reputation on K5.

Again, had I published conventionally it might have taken me a year or more to find out how well my book worked before a live audience. But electronic publication has the advantage that feedback is always just a click away for the reader -- either to tell me to go to hell or that I changed his life.

Nearly all of the mail I've gotten has been positive, some of it a little embarrassingly so. I credit this to the fact that someone driven off by the first pages of chapter one probably wouldn't bother writing at all. I have received a few negative reactions, such as this one. The comments following the Slashdot review were also more negative, but they were dominated by people who had obviously only skimmed the first chapter so as to post quickly.

(I'm frankly glad a few of the negatives bothered to pipe up, because if they hadn't I would seriously have to wonder about people :-)

Revenue

As I write this I have received about $760 in tips from 85 people. Thanks guys!

About half of the tip money came from the initial introduction, indicating either that K5'ers are extraordinarily generous or that I was getting extra bonus points for my other work here. K5 also generated my largest tips, three of $20, a $30, and one of $45. (Did I mention that some people seem to like the book a lot?)

Slashdot accounted for most of the rest simply because it accounted for most of the rest of the readers. It is worth mentioning that some people, especially in the Slashdot crowd, tipped me just for trying the model out. I got several "haven't read it yet, but here's $1 on principle" messages.

An especially interesting data point is the Bartcop ad for which I paid $80. (I consider this an experiment and I don't account it against tip revenue.) This was supposed to guarantee 15,000 hits and all indications are that I got a fair click-through for my dollar. But as far as I can tell I didn't get a single dollar in tip money. Even if a couple of small tips came from Bartcop click-throughs it doesn't come close to covering the ad, which was extremely cheap by Web advertising standards.

A typical royalty deal from a publisher is 10% of gross, which would snag me $0.50 to $2.00 per reader depending on what kind of book it was. On the other hand much of my distribution depended on it being free; most of my readers didn't bother to pay. (This is not a complaint, it is just an observation.) So it's hard to tell if my royalty revenue would have been higher with conventional publication.

One thing I can tell, though, is that I didn't make enough to cover a traditional advance. Most non-best-selling authors never pay out their advances anyway, so that's the real metric for publication payment. You generally get $5,000 for an "ordinary book" contract. This is a sensible amount for a work that is expected to take months to complete.

Noted from a comment: I put the tip jar on the top index page so as not to impose on readers. Some may not have realized it was there or forgotten by the time they read the whole thing. So I may have been a bit too polite and discreet by not reminding people that the opportunity was there when they finished the book.

In my case I have no complaints; I never expected to make even the $760, never expected to have more than the eight readers. Because of the book's "difficulty" I was not able to get it in over the transom at a real publisher when I tried in the late 1990's. This way I have readers, I have feedback, and I know the book does what I hoped it would do. And all this happened in a very short time.

On the other hand I could not honestly advise anyone to try making the Internet tip jar their income source for the rent and groceries. All indications are that I got extraordinary results, and it just wasn't enough.

The Future I: Free *

The Free movement (as in Free software, music, art, and so forth) has work to do. As of now the tip jar model doesn't work economically as a substitute for conventional publication. (Free publication does have its upside, which I have especially appreciated since I am not depending on an advance to pay the rent.) But the next generation of artists -- new artists -- are the ones most in need of some kind of patronage. If they aren't supported they will become CPA's and forget about their art. We need a better plan.

The Future II: Me

On the novel site I made an offer to self-publish the novel in book form if I got enough support. As of shortly after the Slashdot review I made that goal, and I am keeping the tip money aside to fund this project.

However, the extraordinary success it has had in distribution and the feedback have convinced me to follow the advice of some of my readers, and try again to have it published conventionally. Right now I have a very highly regarded agent who has expressed interest in reading it, which is under normal conditions difficult to arrange. So my Web adventure has already put me in a place I couldn't get to when I didn't have thousands of readers, at least one of whom is an editor.

But we are back in the glacially-slow conventional publishing space and now that I've synopsized it and formatted the first three chapters appropriately and sent it off it will be a month or two before I know whether I have a shot at being represented. (Yes, the agent wanted a standard submission: "I can't (won't) read a whole novel off the screen." And they make the rules.)

I will give this process until the end of the year. At that point if I haven't made any progress I will self-publish the damn thing since I promised I would and I hate not fulfilling a promise. I'll keep the ball in motion in conventional land but the self publication will not help my cause there, which is why I am delaying it.

P.S.:

Please don't leave a comment complaining that this article doesn't include a link to the novel in question. It's not about plugging my novel, it's about the process and the results.

Tip Jar

Or with Bitcoin