October 30, 2013 at 10:10It's time to pay: non-standard ways of monetizing software and digital content
With the advent of the Internet, old ways of selling content began to work noticeably worse. Many sales patterns have changed and continue to undergo metamorphoses; a single solution has not yet been invented. We’ll talk about the most unusual ways to pay authors today.
The Flattr micropayment system was invented by Peter Sund, a member of the same sensational administration of The Pirate Bay, and Linus Olsson helped him in this. In 2010, after the trial of the tracker, Sunde introduced the Flattr initiative to the general public. At that time, it all seemed quite logical, because Flattr is also called to some extent to help make information free by ceasing to "finance" copyright holders parasitizing on authors.
The essence of the system is extremely simple. After registering in the system, the user can replenish his account in the Flattr system for any amount (at least two euros) and set for himself the so-called monthly budget - the amount that will be spent on donations to the authors for a month. The service charges 10% of the monthly fees from the user's account in their favor. You can deposit and withdraw money through PayPal and Skrill, which, of course, is not very convenient for Russia, but bank cards are also accepted.
In turn, authors of any content (musicians, writers, software creators, and so on) are invited to post a special Flattr button on my site. By clicking on it, users can donate money to the author. The service supports a huge number of platforms, including free ones, which are very popular: WordPress, Blogger and Joomla.
However, the main feature is that the amount of the donation here is determined not by the user, but by the system. For example, if a user had five euros on his account and in a month he pressed the Flattr button three times, the system will distribute these five euros in equal proportions between the three authors. If the user clicks on the Flattr-button fifteen times, the amount will be divided into fifteen equal shares, and so on.
It is this feature that distinguishes Flattr from other systems; it is unusual and does not even work on the principle of "pay as much as you want / you can." However, despite this, the service has not yet been able to conquer the broad masses of people (indeed, it is often easier for a person to fasten PayPal details, account number or wallet to the site), although the system is used quite actively, especially in the West. Of course, the main advantage of Flattr over the usual message in the spirit of “You can support me with money, here is my account number” is obvious - its speed and ease of use. You can support the author with Flattr with just one click, the budget for charity is set aside in advance, so there is no need to think about how much to pay, you do not need to be afraid to exceed the limits and get carried away with donations beyond measure. And of course, you don’t need to login somewhere, “Shine” your bank card number and so on. It turns out a kind of analogue of likes, only financially backed.
But it is worth considering: for the author to really feel the effect of donations through this service, he needs to be a very popular content provider; No wonder micropayments have the prefix “micro” - even if there are a lot of them, they are usually very small in size. Perhaps until not too much content has acquired Flattr-buttons precisely because of the fear that this venture will not bring a lot of money. Personally, this seems rather sad to me, because we have not yet come up with another equally convenient and simple system made "for people" and designed to exclude copyrists from the "food chain". The project of Peter Sunde seems to be underestimated so far.
By the way, the name Flattr is a pun. It combines the English flatter - praise, flattery and flat rate - equal value.
Perhaps more often than others, the gaming industry began to experiment with the sale of content. As you can see, this article does not have a separate detailed mention of Kickstarter, but only because we recently published a large article about it. However, there is something to tell about without Kickstarter. Surely Humble Bundle game collectionsThey are familiar to everyone who somehow monitors CI and plays in them. The first collection was released in 2010, and Wolfire Games was responsible for its compilation. The developer of Wolfire Games, Jeff Rosen, had the idea of selling sets of games, in much the same way as in the Steam system. In addition, Rosen liked the idea of paying for games on the principle of “pay what you want,” that is, how much you want. He spied such a model in the game World of Goo, which was sold at a "free price" in honor of his birthday. Then it sold 57 thousand copies of World of Goo and the developers raised more than 117 thousand dollars.
Having co-authored independent developers, among whom Rosen had connections, and combining both ideas, Wolfire Games released the first game collection. The idea was a success - over a million dollars were raised on the sales of the set over the week, when only 116 thousand were expected. It is not surprising that already in 2011, the venture company Sequoia Capital invested 4.7 million in Rosen's initiative. Thus was born the company Humble Bundle, Inc., which to this day is engaged in the compilation and implementation of game sets. Humble Indie Bundle games are being released for Microsoft Windows, OS X, Linux, and more recently for Android. In addition, a non-gaming Humble eBook Bundle kit for e-books was released, which included, as you can easily understand, books (mostly fiction).
It's funny, but even such a famous studio as THQ tried to go to the Rosen platform. At the same time, two key rules were violated: the games were sold only for Windows and there was no talk of canceling DRM. However, the sale still managed to gain more than five million dollars. Alas, this did not save from THQ bankruptcy.
The main feature of the Humble Indie Bundle is simplicity. To purchase a collection, you do not need to register anywhere, subtly replenish your account, fill out numerous forms or download additional software. You just choose the amount that you do not mind paying for the collection, distribute the money and voilà! Money is accepted using bank cards, PayPal, Amazon Payments, Google Checkout. It is worth noting that sets of games (and single titles, which began to be sold recently) are on sale for a limited time. Part of the proceeds from sales goes to charity (they are transferred to organizations such as the Child's Play or Electronic Frontier Foundation), part of the amount remains to Humble Indie Bundle itself, and part is transferred to the authors of the games. Interestingly, the ratio of who and how much to pay is determined by the user.
Of course, the problem of piracy is also relevant here. Given that the games are intentionally not protected by DRM, there’s nowhere to steal them. Nevertheless, Rosen and his colleagues do not despair and look at the problem philosophically. Perhaps the person stealing a new game from torrents has already credited the Humble Indie Bundle a considerable amount before, or he simply does not have money to pay. Or maybe it’s just more convenient for him to download this way, because the speed is higher (guided by this logic, the company added the option to download via BitTorrent). They try to encourage people to buy Humble Indie Bundle games in different ways, including transferring funds to organizations such as the Electronic Frontier Foundation (these people, among other things, are struggling with DRM). However, absolutely unprincipled pirates, like people who launched the site wollfire.com, are not encouraged.
Another striking example from the field of the gaming industry is Minecraft. The popularity of this game is just crazy. So, according to mid-April 2013, more than 10 million copies of Minecraft for PC and more than 20 million copies for all platforms were sold in total. The creator of the game - Marcus "Notch" Persson literally became a millionaire, having earned more than $ 100 million in sales. In fairness, I note that Persson is still in some shock from what is happening and recently admitted to Reddit that he grew up in a poor family, never thought about money, so the current situation still seems to him to be “fucking weird” (sparing translation: “Damn weird”) and he doesn't know where to spend the money. What is the secret to the success of Notch and his brainchild? One of the main factors is called the game’s sales scheme. The fact is that, when Minecraft was still in alpha test, the game was already on sale. This practice is called alphafunding, that is, financing the product at an early stage. Of course, during the testing period, the price was reduced by 25% and amounted to 14.95 euros. When the full version came out, the cost increased to 19.95 euros. Such a scheme allows people to support the author financially already in the early stages of development, as well as have access to content, often still raw, but already promising. Unlike the Kickstarter and other crowdfunding projects, in the case of alphafunding, a person does not just invest in a project so that it is not known when to see a finished product, but immediately gets a working game “on hand”, which is also “completed” and updated before our eyes. Agree, it's pretty tempting. Marcus Persson, by the way, started selling the game in 2009 with the Indev stage, which later moved to the Infdev stage (with an almost endless map), and only then there were Alpha, Beta and the release. That is, it turned out that you can start selling even when there is still practically nothing to sell.
It is also surprising that during the alpha and beta testing Minecraft did not have ads. Not at all. Only word of mouth and Notch’s desire to make a good game, inspired by Dwart Fortress and Dungeon Keeper. Prior to Minecraft, there were similar indie projects (Infiniminer, Stranded), which, however, did not have multiplayer and "did not shoot." But Minecraft a couple of months after the start of sales showed such potential that Notch, who was engaged in development almost single-handedly, remained at his main job only part-time, and six months later decided to devote all his time to a new project. And as it turned out, he was right. Already in January 2011, less than a month after the release of the final release of Minecraft, more than a million copies of the game were sold. I remind you - without ads and without a publisher. Only word of mouth and later references to thematic media (web comics, blogs, Reddit, and so on). As a result, to date, Minecraft is in the top 10 best-selling PC games in history.
Thanks to Minecraft, the alphafunding scheme, which previously occupied a very small niche, gained a second wind and gained great popularity.
This is especially, of course, relevant and convenient for indie developers, who can now begin to form communities around their project, attract users and receive feedback from the very early stages of development. Now there are large stores only for indie games, moreover, focusing on alphafunding (for example, Desura), and the Steam section has also appeared, which clearly indicates the potential of this sales scheme.
But once the beta versions were free ... :)
All of the above are common cases, in fact, they are entire systems for financing authors, global and serious. What about special cases? Does the story know examples where the author directly sold his creations to the public, bypassing intermediaries, publishers and other copywriters, and won? I myself answer my own question - such examples are known, and there are not so few of them. Basically, successful experiments were carried out by already known people (musicians, writers, and so on). Here are just a few examples.
The advent of the Internet is not without reason that scared copyright holders and continues to terrify them so far. Back in 1997 (!) The fans of the British group Marillion organized and raised over 60 thousand dollars through a network to finance a tour of favorites throughout the United States. Subsequently, a group in a similar pattern raised funds to record and promote new albums, and also successfully. Radiohead in 2007 released the album In Rainbows not only on physical media, but also invited everyone to download it from the site, paying on the basis of the "how much you want." According to the results of the experiment, the group announced that it had earned much more than previous albums released in the traditional way, but no specific figures were given.
These trends are also not spared Russia. In 2008, we launched the Kroogi.ru site .where the content (musical compositions, artwork, books, videos, photographs, animation, etc.) is distributed according to the “pay as you want” scheme. At the beginning of 2009, 600–700 musicians joined the project (including many famous names: Boris Grebenshchikov, Tequilajazzz) and about 20 thousand users. Then Kroogi received the investment. At the moment, the project is still working and does not change itself (although for the most part it has become a music venue, and not universal, as originally intended). For example, in 2011, the Zorge group, the collective of former Tequilajazzz leader Yevgeny Fedorov, recorded the debut album No Name Album with fans' money using the Kroogi platform (588 participants of the action raised 10,052 dollars).
Another successful example from the field of music, moreover, is more “fresh”: last spring, the Bi-2 group raised 1,250,000 rubles for the release of the Spirit album, using the help of the Planeta.ru portal for this.
No less famous is the experiment (although it was not successful) of the popular science fiction writer Sergei Lukyanenko. At some point, the writer was tired of arguing in his LJ with supporters of the “pay the author directly, you can even after buying and reading a book” model and decided to prove that this scheme would not work. The author asked the thousands of readers of his blog to transfer at least one ruble to his Yandex.Money wallet. Allegedly, the results of the experiment should have shown whether people are ready to pay according to such a model. The result was disappointing: 52,993 people read Lukyanenko’s message, 2,640 people agreed to pay, and the amount collected was only 6404 rubles. Of course, the writer concluded that the system does not work, and, giving the collected money to charity, closed the topic. A little weird conclusion considering that Lukyanenko in LJ is known for being prone to shocking, and the public knew in advance that he was participating in the “experiment”, and not paying the author for the book. In my opinion, it is not surprising that only about 5% of the audience participated in the ruble. Moreover, from many readers Lukyanenko received not the requested ruble, but much larger amounts: 20-30 euros. However, for some reason the author did not consider all this.
First published in the Hacker magazine from 06/2013.
Publish on Issuu.com
Subscribe to Hacker
Flattr
The Flattr micropayment system was invented by Peter Sund, a member of the same sensational administration of The Pirate Bay, and Linus Olsson helped him in this. In 2010, after the trial of the tracker, Sunde introduced the Flattr initiative to the general public. At that time, it all seemed quite logical, because Flattr is also called to some extent to help make information free by ceasing to "finance" copyright holders parasitizing on authors.
The essence of the system is extremely simple. After registering in the system, the user can replenish his account in the Flattr system for any amount (at least two euros) and set for himself the so-called monthly budget - the amount that will be spent on donations to the authors for a month. The service charges 10% of the monthly fees from the user's account in their favor. You can deposit and withdraw money through PayPal and Skrill, which, of course, is not very convenient for Russia, but bank cards are also accepted.
In turn, authors of any content (musicians, writers, software creators, and so on) are invited to post a special Flattr button on my site. By clicking on it, users can donate money to the author. The service supports a huge number of platforms, including free ones, which are very popular: WordPress, Blogger and Joomla.
However, the main feature is that the amount of the donation here is determined not by the user, but by the system. For example, if a user had five euros on his account and in a month he pressed the Flattr button three times, the system will distribute these five euros in equal proportions between the three authors. If the user clicks on the Flattr-button fifteen times, the amount will be divided into fifteen equal shares, and so on.
It is this feature that distinguishes Flattr from other systems; it is unusual and does not even work on the principle of "pay as much as you want / you can." However, despite this, the service has not yet been able to conquer the broad masses of people (indeed, it is often easier for a person to fasten PayPal details, account number or wallet to the site), although the system is used quite actively, especially in the West. Of course, the main advantage of Flattr over the usual message in the spirit of “You can support me with money, here is my account number” is obvious - its speed and ease of use. You can support the author with Flattr with just one click, the budget for charity is set aside in advance, so there is no need to think about how much to pay, you do not need to be afraid to exceed the limits and get carried away with donations beyond measure. And of course, you don’t need to login somewhere, “Shine” your bank card number and so on. It turns out a kind of analogue of likes, only financially backed.
But it is worth considering: for the author to really feel the effect of donations through this service, he needs to be a very popular content provider; No wonder micropayments have the prefix “micro” - even if there are a lot of them, they are usually very small in size. Perhaps until not too much content has acquired Flattr-buttons precisely because of the fear that this venture will not bring a lot of money. Personally, this seems rather sad to me, because we have not yet come up with another equally convenient and simple system made "for people" and designed to exclude copyrists from the "food chain". The project of Peter Sunde seems to be underestimated so far.
By the way, the name Flattr is a pun. It combines the English flatter - praise, flattery and flat rate - equal value.
Humble bundle
Perhaps more often than others, the gaming industry began to experiment with the sale of content. As you can see, this article does not have a separate detailed mention of Kickstarter, but only because we recently published a large article about it. However, there is something to tell about without Kickstarter. Surely Humble Bundle game collectionsThey are familiar to everyone who somehow monitors CI and plays in them. The first collection was released in 2010, and Wolfire Games was responsible for its compilation. The developer of Wolfire Games, Jeff Rosen, had the idea of selling sets of games, in much the same way as in the Steam system. In addition, Rosen liked the idea of paying for games on the principle of “pay what you want,” that is, how much you want. He spied such a model in the game World of Goo, which was sold at a "free price" in honor of his birthday. Then it sold 57 thousand copies of World of Goo and the developers raised more than 117 thousand dollars.
Having co-authored independent developers, among whom Rosen had connections, and combining both ideas, Wolfire Games released the first game collection. The idea was a success - over a million dollars were raised on the sales of the set over the week, when only 116 thousand were expected. It is not surprising that already in 2011, the venture company Sequoia Capital invested 4.7 million in Rosen's initiative. Thus was born the company Humble Bundle, Inc., which to this day is engaged in the compilation and implementation of game sets. Humble Indie Bundle games are being released for Microsoft Windows, OS X, Linux, and more recently for Android. In addition, a non-gaming Humble eBook Bundle kit for e-books was released, which included, as you can easily understand, books (mostly fiction).
It's funny, but even such a famous studio as THQ tried to go to the Rosen platform. At the same time, two key rules were violated: the games were sold only for Windows and there was no talk of canceling DRM. However, the sale still managed to gain more than five million dollars. Alas, this did not save from THQ bankruptcy.
The main feature of the Humble Indie Bundle is simplicity. To purchase a collection, you do not need to register anywhere, subtly replenish your account, fill out numerous forms or download additional software. You just choose the amount that you do not mind paying for the collection, distribute the money and voilà! Money is accepted using bank cards, PayPal, Amazon Payments, Google Checkout. It is worth noting that sets of games (and single titles, which began to be sold recently) are on sale for a limited time. Part of the proceeds from sales goes to charity (they are transferred to organizations such as the Child's Play or Electronic Frontier Foundation), part of the amount remains to Humble Indie Bundle itself, and part is transferred to the authors of the games. Interestingly, the ratio of who and how much to pay is determined by the user.
Of course, the problem of piracy is also relevant here. Given that the games are intentionally not protected by DRM, there’s nowhere to steal them. Nevertheless, Rosen and his colleagues do not despair and look at the problem philosophically. Perhaps the person stealing a new game from torrents has already credited the Humble Indie Bundle a considerable amount before, or he simply does not have money to pay. Or maybe it’s just more convenient for him to download this way, because the speed is higher (guided by this logic, the company added the option to download via BitTorrent). They try to encourage people to buy Humble Indie Bundle games in different ways, including transferring funds to organizations such as the Electronic Frontier Foundation (these people, among other things, are struggling with DRM). However, absolutely unprincipled pirates, like people who launched the site wollfire.com, are not encouraged.
The numbers speak for themselves
As of December 2011, the six Humble Bundle collections released earned sales of 1.25 million, 1.8 million, 900 thousand, 2.16 million, 1.1 million, and 2.37 million dollars, respectively. As of February 2013, a total of $ 33.2 million was collected and more than twenty sets were sold.
Minecraft and alfafunding
Another striking example from the field of the gaming industry is Minecraft. The popularity of this game is just crazy. So, according to mid-April 2013, more than 10 million copies of Minecraft for PC and more than 20 million copies for all platforms were sold in total. The creator of the game - Marcus "Notch" Persson literally became a millionaire, having earned more than $ 100 million in sales. In fairness, I note that Persson is still in some shock from what is happening and recently admitted to Reddit that he grew up in a poor family, never thought about money, so the current situation still seems to him to be “fucking weird” (sparing translation: “Damn weird”) and he doesn't know where to spend the money. What is the secret to the success of Notch and his brainchild? One of the main factors is called the game’s sales scheme. The fact is that, when Minecraft was still in alpha test, the game was already on sale. This practice is called alphafunding, that is, financing the product at an early stage. Of course, during the testing period, the price was reduced by 25% and amounted to 14.95 euros. When the full version came out, the cost increased to 19.95 euros. Such a scheme allows people to support the author financially already in the early stages of development, as well as have access to content, often still raw, but already promising. Unlike the Kickstarter and other crowdfunding projects, in the case of alphafunding, a person does not just invest in a project so that it is not known when to see a finished product, but immediately gets a working game “on hand”, which is also “completed” and updated before our eyes. Agree, it's pretty tempting. Marcus Persson, by the way, started selling the game in 2009 with the Indev stage, which later moved to the Infdev stage (with an almost endless map), and only then there were Alpha, Beta and the release. That is, it turned out that you can start selling even when there is still practically nothing to sell.
It is also surprising that during the alpha and beta testing Minecraft did not have ads. Not at all. Only word of mouth and Notch’s desire to make a good game, inspired by Dwart Fortress and Dungeon Keeper. Prior to Minecraft, there were similar indie projects (Infiniminer, Stranded), which, however, did not have multiplayer and "did not shoot." But Minecraft a couple of months after the start of sales showed such potential that Notch, who was engaged in development almost single-handedly, remained at his main job only part-time, and six months later decided to devote all his time to a new project. And as it turned out, he was right. Already in January 2011, less than a month after the release of the final release of Minecraft, more than a million copies of the game were sold. I remind you - without ads and without a publisher. Only word of mouth and later references to thematic media (web comics, blogs, Reddit, and so on). As a result, to date, Minecraft is in the top 10 best-selling PC games in history.
Thanks to Minecraft, the alphafunding scheme, which previously occupied a very small niche, gained a second wind and gained great popularity.
This is especially, of course, relevant and convenient for indie developers, who can now begin to form communities around their project, attract users and receive feedback from the very early stages of development. Now there are large stores only for indie games, moreover, focusing on alphafunding (for example, Desura), and the Steam section has also appeared, which clearly indicates the potential of this sales scheme.
But once the beta versions were free ... :)
Individual experiments
All of the above are common cases, in fact, they are entire systems for financing authors, global and serious. What about special cases? Does the story know examples where the author directly sold his creations to the public, bypassing intermediaries, publishers and other copywriters, and won? I myself answer my own question - such examples are known, and there are not so few of them. Basically, successful experiments were carried out by already known people (musicians, writers, and so on). Here are just a few examples.
The advent of the Internet is not without reason that scared copyright holders and continues to terrify them so far. Back in 1997 (!) The fans of the British group Marillion organized and raised over 60 thousand dollars through a network to finance a tour of favorites throughout the United States. Subsequently, a group in a similar pattern raised funds to record and promote new albums, and also successfully. Radiohead in 2007 released the album In Rainbows not only on physical media, but also invited everyone to download it from the site, paying on the basis of the "how much you want." According to the results of the experiment, the group announced that it had earned much more than previous albums released in the traditional way, but no specific figures were given.
These trends are also not spared Russia. In 2008, we launched the Kroogi.ru site .where the content (musical compositions, artwork, books, videos, photographs, animation, etc.) is distributed according to the “pay as you want” scheme. At the beginning of 2009, 600–700 musicians joined the project (including many famous names: Boris Grebenshchikov, Tequilajazzz) and about 20 thousand users. Then Kroogi received the investment. At the moment, the project is still working and does not change itself (although for the most part it has become a music venue, and not universal, as originally intended). For example, in 2011, the Zorge group, the collective of former Tequilajazzz leader Yevgeny Fedorov, recorded the debut album No Name Album with fans' money using the Kroogi platform (588 participants of the action raised 10,052 dollars).
Another successful example from the field of music, moreover, is more “fresh”: last spring, the Bi-2 group raised 1,250,000 rubles for the release of the Spirit album, using the help of the Planeta.ru portal for this.
No less famous is the experiment (although it was not successful) of the popular science fiction writer Sergei Lukyanenko. At some point, the writer was tired of arguing in his LJ with supporters of the “pay the author directly, you can even after buying and reading a book” model and decided to prove that this scheme would not work. The author asked the thousands of readers of his blog to transfer at least one ruble to his Yandex.Money wallet. Allegedly, the results of the experiment should have shown whether people are ready to pay according to such a model. The result was disappointing: 52,993 people read Lukyanenko’s message, 2,640 people agreed to pay, and the amount collected was only 6404 rubles. Of course, the writer concluded that the system does not work, and, giving the collected money to charity, closed the topic. A little weird conclusion considering that Lukyanenko in LJ is known for being prone to shocking, and the public knew in advance that he was participating in the “experiment”, and not paying the author for the book. In my opinion, it is not surprising that only about 5% of the audience participated in the ruble. Moreover, from many readers Lukyanenko received not the requested ruble, but much larger amounts: 20-30 euros. However, for some reason the author did not consider all this.
Rights holders cling to life
Not so long ago, the director of the popular television series "Game of Thrones" thanked those who download the show illegally using torrent and file sharing. Like, it raises the popularity and ratings of the series, brings new subscribers to HBO and so on. But not everyone in the television and film industry agrees with this logic.
In an interview with the Wall Street Journal, representatives of NBC Universal spoke about the work of their content police, where only twenty people work. The fight against pirates still resembles the war with windmills and looks very sad. Here are just a few facts cited by NBC Universal staff:
- Just a few minutes after the series end credits, the next episode of the series and its copies are already appearing on the Internet.
- An hour after the release of a new series of a show, you can already find about half a thousand links on the Web.
- Two hours after the release of the series, there are already translations into other languages.
- After removing one such link, 50 copies immediately come to its place.
- Back in 2009, the Internet had 5.4 billion links to pirated content, from movies and TV shows to computer games.
Last year, this figure rose to 14 billion. Such data leads the company Irdeto, also engaged in cleaning the Internet from illegal content commissioned by large studios.
First published in the Hacker magazine from 06/2013.
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