Why Micropayments and Donation Biz Models SUCK

The news that Kottke ditched the donations biz model he started a year ago comes as little surprise. At the time, I posted that I hoped he had a better plan than that and was none too kind about the whole ludicrous idea of expecting readers to support a blogger for just blogging. I don’t take any great delight in seeing Jason fail, I don’t know him, but Im certainly glad to be able to point to a great example of the models failure. Maybe now we can drop that silly line of reasoning once and for all.

We have talked about models where one would pay to get into the archives of a particularly useful blogs content, and indeed it seems to work well for some, but that’s a very different model to simply holding out your hand and hoping enough pennies come your way to feed the family.

Maybe it’s just me, though i suspect not, that finds the idea of the donation button repulsive?

15 thoughts on “Why Micropayments and Donation Biz Models SUCK

  1. >>”no rights or expectations of anything in return”

    Generally true. But when someone like Kottke says something like…

    “The goal is to use the increased level of focus and time to create a (much) better site. More time means there will be more content of a greater variety.”

    … as a way of attracting donations, you *do* kinda expect something in return for your money. The truth is that he lost interest, got bored, and didn’t deliver. And he knew that this was the reason he wouldn’t get repeat – or even new – donations the second time round.

    My belief is that if he had put the effort in to do something special with all that extra time (and with the $40k he made), then he could have generated double the amount this time.

    Shame, really.

  2. The difference between sponsorship and donation is a donation is informal with no rights or expectations of anything in return whereas a sponsorship is an agreement where each side gets something. Give a tip or a donation and all you can expect is a warm fuzzy feeling that you have done good today.

    I agree with Jayne. I am all for charity but my blogs are run as businesses.

  3. @ Jayne Hill: check out the Kottke site, you will see a list of people and companies who donated. This is exactly like a sponsor-list, the only difference is that it’s not shown on the homepage, but it is a list of people who invested in Kottke. If you people don’t consider this serious business, I don’t get it. Kottke made big bucks in 3 weeks time, no doubt. Serious business in my opinion. Call it sponsoring, donations anything… open up your mind

  4. This conversation reminds me of that woman who overspent her credit cards and then begged for money from her Web site. She got huge sums this way. It’s mind-boggling how someone could succeed by being irresponsible when so many talented bloggers and podcasters are out there providing real value and struggling.

    But I guess I’m just old or something.

  5. I think repulsive is far too strong a word, Nick. It’s like most other things — it works for some and doesn’t work for others. Heck, Kottke got $40k in donations just by asking. Amazing.

    I run a heavy-traffic hobby site which is all-volunteer, no revenue, etc., and for a long time readers were requesting a way to help out with expenses. We finally did a Paypal button about 2 years ago – the ones who wanted to donate did so, and the couple hundred thousand who don’t aren’t bothered. No harm, no foul.

  6. I disagree Macro Raaphorst, I feel donations are given then the donator is “so to speak” forgotten about!, Sponsors are usually aknowledged in some way ie, with advertising for the sponsor. You would donate money to a homeless person but not sponsor them, thus i feel there is a big difference.
    I do feel the word “donate” can seem negative and slightly needy!

  7. I don’t ask for donations because I’m running a business, and I want to be perceived as a professional running a business. Imagine walking into Best Buy and finding a “donate to help keep Best Buy in business” box by the front door.

    Kottke did a bit better with the “micropatron” program. I’d say most people donated for the link and/or the status they got from doing so – so it was advertising under a different name.

    I think donations are a great way for a non-profit organization to make money. This means two things:

    1. If your site is perceived as a charity rather than a business, people are more likely to donate.

    2. It’s a way to survive, but not a way to make a decent profit.

    Advertising requires traffic, which is hard to get. Donations require reputation and respect, which are even harder to get, and hard to keep once you start cashing in on them.

  8. I think donations are great. Much better than ads. Ads are always trying to pull someone away from the site. And they are always annoying. If your ads get clicked before someone reads a word on your site, is that good or bad news? I think that’s bad… but in a way, this is the how great ads are suppose to work like.

    Think again!

    In my opinion these donation-models will become very populair.

    Why do I think this is good?

    – People can decide themselves what they want to give. Some people have lots of money, some don’t.
    – It is a polite system, with a lot of freedom for the user. They can decide to donate or not

    But I guess the name donations will be assosiated with disasters… so yes the name donations doesn’t sound to good. Maybe Sponsoring or Gifts sound better?

    Think about it: companies, the big ones are into sponsoring… and that IS donating, period!

  9. On one hand, I know a LOT of creative folks that would kill (or maim) to make $40,000. And I think that, if his interest hadn’t been caught by other opportunities, he probably could have earned at least as much with a second fund drive. However, the reason he earned that support in the first place was because it took about six years to build an audience large enough to support him. I agree that someone launching a new blog today would probably not be able to reach that critical mass on donations alone.

  10. No doubt we’ll see a variety of monetization methods for blogs as the medium matures. But donations only work for certain types of blogs. By that I mean without leaving a bad aftertaste. I have put d-buttons on a very small selection of my blogs merely as a test, but they’ll be removed when I can remember which zomblogs they’re on

  11. … I must get welfare!

    Well, I am not reading kottke but I also think that a business plan based on donations suck. Offer something, try to achieve a high price for what you do … but just asking for money leaves a bad taste of ‘whining’.

    I have no problem though to pay a premium for better service or to pay shareware fees. On the other hand I have also no problem to write a bill for a ‘corporate blogging’ concept or to publish ads.

    PS: Nick, pretty good article on threadwatch!

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