I'm excited for Penny Arcade's Kickstarter (And should you be?)

One of the more polarizing topics from last week was the launch of Penny Arcade's Kickstarter project (PAKS, in short). Their plan is to replace the website's ad revenue with funding provided by the community, in order to possibly run it without any ads for the entirety of 2013. They are looking to pay serveral expenses with those funds, such as rent for their office, payment and health insure for their fourteen employees, server costs etc. And I'm excited. There are at least two possible reasons for you to be excited about it as well (and maybe even to donate).

The first reason is quite simple: You are a fan of Penny Arcade's work. The removal of ads takes place in two steps. At $250,000 one of two banner ads will be removed from the homepage, the other at $525,000. At $999,999, the whole site will be ad-free. There are multiple steps between, and also exceeding those goals. At each one of these steps, going up to $1.4 million, a Penny Aracde-related project will be funded. Those include a tabletop adventure written and designed by the webcomic's creators, the revival of a community-favorite podcast and a new webshow that replaces season 4 of the quasi-docu-series PATV. That new show is described by them as "essentially Hell’s Kitchen for web cartoonists". These are only a few reasons to be excited as a fan, with four more projects yet to be revealed.

The second reason (bear with me here): You are a Giant Bomb Premium Member. When Whiskey Media announced premium memberships for pay, I was following them for about a year. I was absorbing all the Giant Bomb and most of Tested.com's video content. For me, they had become a substantial part of entertainment and information alike, and I could not have been more excited to help pay the bills and, in return, get even more content out of that. I also learned to appreciate that good content needs support. Cutting out at least one middle-man between creators and the finiancial support from their followers seems like a sensible idea to me. Lastly, a comment made by Jeff seemed to have stuck with me since the Premium launch - "building a better internet." When I got a sense of what PAKS is, I was immediately reminded of that phrase and it still sounds very appealing. If some or all of those notions remind you of why you paid to be a Premium Member: Penny Arcade are essetinally doing the same thing, but on a much larger scale.

I will not try and convince you to donate (after all, I haven't even done it myself), but you should be conscious about the fact that even $1 would be your Yes-vote for cutting out the middle-man, directly supporting the creators you like, and building a better internet. Either because you are a PA fan, or someone who already knows why they give money to their favorite website.

36 Comments
36 Comments
Posted by fr0y0

One of the more polarizing topics from last week was the launch of Penny Arcade's Kickstarter project (PAKS, in short). Their plan is to replace the website's ad revenue with funding provided by the community, in order to possibly run it without any ads for the entirety of 2013. They are looking to pay serveral expenses with those funds, such as rent for their office, payment and health insure for their fourteen employees, server costs etc. And I'm excited. There are at least two possible reasons for you to be excited about it as well (and maybe even to donate).

The first reason is quite simple: You are a fan of Penny Arcade's work. The removal of ads takes place in two steps. At $250,000 one of two banner ads will be removed from the homepage, the other at $525,000. At $999,999, the whole site will be ad-free. There are multiple steps between, and also exceeding those goals. At each one of these steps, going up to $1.4 million, a Penny Aracde-related project will be funded. Those include a tabletop adventure written and designed by the webcomic's creators, the revival of a community-favorite podcast and a new webshow that replaces season 4 of the quasi-docu-series PATV. That new show is described by them as "essentially Hell’s Kitchen for web cartoonists". These are only a few reasons to be excited as a fan, with four more projects yet to be revealed.

The second reason (bear with me here): You are a Giant Bomb Premium Member. When Whiskey Media announced premium memberships for pay, I was following them for about a year. I was absorbing all the Giant Bomb and most of Tested.com's video content. For me, they had become a substantial part of entertainment and information alike, and I could not have been more excited to help pay the bills and, in return, get even more content out of that. I also learned to appreciate that good content needs support. Cutting out at least one middle-man between creators and the finiancial support from their followers seems like a sensible idea to me. Lastly, a comment made by Jeff seemed to have stuck with me since the Premium launch - "building a better internet." When I got a sense of what PAKS is, I was immediately reminded of that phrase and it still sounds very appealing. If some or all of those notions remind you of why you paid to be a Premium Member: Penny Arcade are essetinally doing the same thing, but on a much larger scale.

I will not try and convince you to donate (after all, I haven't even done it myself), but you should be conscious about the fact that even $1 would be your Yes-vote for cutting out the middle-man, directly supporting the creators you like, and building a better internet. Either because you are a PA fan, or someone who already knows why they give money to their favorite website.

Posted by Pie

Don't tell me how to feel!

Posted by JasonR86

Huh. I thought of a lot of things when I read this. It seems odd from a business standpoint to ditch your advertising partners and hope that the community will support you. It also seems like they could make a killing on this deal and make a ton of money without adding much to their business expenses which also seems sort of...I don't know, wonky. I don't know, it just seems like a big change.

Edited by Bocam

@fr0y0 said:

The second reason (bear with me here): You are a Giant Bomb Premium Member. When Whiskey Media announced premium memberships for pay, I was following them for about a year. I was absorbing all the Giant Bomb and most of Tested.com's video content. For me, they had become a substantial part of entertainment and information alike, and I could not have been more excited to help pay the bills and, in return, get even more content out of that. I also learned to appreciate that good content needs support. Cutting out at least one middle-man between creators and the finiancial support from their followers seems like a sensible idea to me. Lastly, a comment made by Jeff seemed to have stuck with me since the Premium launch - "building a better internet." When I got a sense of what PAKS was, I was immediately reminded of that phrase and it still sounds very appealing. If some or all of those notions remind you of why you paid to be a Premium Member: Penny Arcade are essetinally doing the same thing, but on a much larger scale.

There's a difference: $60 a year on Giant Bomb gets me exclusive videos and no ads. $60 a year on Penny Arcade gets me a $5 video game and the Leaderboard Ad Removed

Posted by fr0y0

@JasonR86: Thanks for the comment. You're right that it's a big change, and I think that's why it's worth to be given a shot. Also, and this just might be your phrasing, they didn't ditch their ads yet. If the KS fails (which it already basically didn't, be reaching the first goal), everything will go back to normal. With all (remaining) ads.

Posted by Akrid

I don't like their methodology here. To stack rewards so far on top of the kickstarter goal really is exploiting the system. It feels like "Hey, if you give us some money, you won't get much, and we're gonna keep your money since our goal was so low. But if you give us a LOT of money, you'll get some stuff".

Really feel they should have broken them out into their own things if they had to, or even reversed the order - no ads as a great bonus up top, some great content up front.

It is true that it's similar in some ways to what they tried to establish here at GB though.

Posted by JasonR86

@fr0y0:

Well lets say they make their goal and they have enough funding for a year. What do they do after that year? Another kickstarter? Crawl back to their ad partners and hope they haven't burned their bridges? Seems like a bad idea to me.

Posted by Animasta

@Bocam: yeah, this is what gets me. All you're really paying for in PA's case is no ads; it's a donation rather than a subscription. They still have to mention new games, becuase that's what they do (make 'funny' video game comics based on current games)

Posted by fr0y0

@JasonR86: I think they already said that the plan would be another Kickstarter-style thing (maybe even direct payment to them, who knows).

Edited by fr0y0

@Animasta: @Bocam: You guys should check out the Kickstarter page and check out the "stretchgoal projects." I mentioned some of them in my paost, actually. There is a lot to be gained here for their fans.

@Akrid: Yea, there are definitely serveral ways to do this. The "regular" rewards put me off at first as well. But how would you split their projects to individual backers? Also they probably looked at other successfull KS campaigns. Stretchgoals worked perfectly for many of them.

Posted by JasonR86

@fr0y0 said:

@JasonR86: I think they already said that the plan would be another Kickstarter-style thing (maybe even direct payment to them, who knows).

Seems like they are putting a lot of faith in their fans to carry the cost of the site. That money seems like it would be far less consistent then regular ad-revenue. I don't doubt that they can meet their goal once. Maybe twice. But five times? Ten times? I personally don't think so.

Posted by fr0y0

@JasonR86: That's also why I think that this is exciting. The eventual outcome - both when the KS ends and in the long run - is hardly predictable. They are taking a chance for their passion.

Posted by artofwar420

@JasonR86 said:

@fr0y0 said:

@JasonR86: I think they already said that the plan would be another Kickstarter-style thing (maybe even direct payment to them, who knows).

Seems like they are putting a lot of faith in their fans to carry the cost of the site. That money seems like it would be far less consistent then regular ad-revenue. I don't doubt that they can meet their goal once. Maybe twice. But five times? Ten times? I personally don't think so.

Well, then they would quietly go back to ads.

Posted by Animasta

@fr0y0 said:

@Animasta: @Bocam: You guys should check out the Kickstarter page and check out the "stretchgoal projects." I mentioned some of them in my paost, actually. There is a lot to be gained here for their fans.

Do you really think it costs, what, 250k? to run their podcast (if I recall that's 750k) even if they had to rebuy all of their equipment, that can't be more than 20k at least (I assume).

Posted by Bocam

@fr0y0 said:

@Animasta: @Bocam: You guys should check out the Kickstarter page and check out the "stretchgoal projects." I mentioned some of them in my paost, actually. There is a lot to be gained here for their fans.

@Akrid: Yea, there are definitely serveral ways to do this. The "regular" rewards put me off at first as well. But how would you split their projects to individual backers? Also they probably looked at other successfull KS campaigns. Stretchgoals worked perfectly for many of them.

$825,000 for a Podcast. I get one for free here.

Posted by fr0y0

@Animasta: @Bocam: You don't pay for that podcast. You don't pay for the projects. The overall goal is a million bucks to run the entire site and office operations exclusively funded by fans. You pay because the goals are there to motivate you.

Posted by JasonR86

@artofwar420 said:

@JasonR86 said:

@fr0y0 said:

@JasonR86: I think they already said that the plan would be another Kickstarter-style thing (maybe even direct payment to them, who knows).

Seems like they are putting a lot of faith in their fans to carry the cost of the site. That money seems like it would be far less consistent then regular ad-revenue. I don't doubt that they can meet their goal once. Maybe twice. But five times? Ten times? I personally don't think so.

Well, then they would quietly go back to ads.

If they haven't already burned those bridges. Otherwise they would have to hope they could find partners elsewhere.

@fr0y0 said:

@JasonR86: That's also why I think that this is exciting. The eventual outcome - both when the KS ends and in the long run - is hardly predictable. They are taking a chance for their passion.

Really? I guess I don't see it that way. It seems like they are doing this because it has the potential to be a easy, fast way to get their revenue and then some without having to make deals with ad partners. Plus, there's always the possibility that they would make even more money then they had been. I wouldn't say this is designed out of passion. I would say it is designed out of simplicity and the potential for an increase in revenue.

Posted by Bocam

@fr0y0: Then they should have made their Kickstarter goal a million bucks.

Posted by fr0y0

@Bocam: Yea, maybe they should have. I don't know. There are serveral ways to organise it. My point is that this whole thing is a look into a possible version of the future. A very different one from now.

Posted by Akyho

I am a penny arcade fan, I only got to PA website for Loading Ready Runs Checkpoint.

Plus I dont like this set up. I would rather PA put some rewards first, THEN ontop if we make this much then ad's are gone. Since getting rid of ads seems a little bad for business, what happens next year? will the same users do it again? Would PA have alienated advertisers and put them in a bad position?

On the short term it sound like too much of a sweet deal for just PA. In the long term is sounds like a bad Idea for PA. As for the users, if they pay the Advert to go...does the extra money go into producing better content...but they said they were going to only produce content if they make MORE than Advertising budget.

Soooooo....PA profits? without effort?

Edited by DonutFever

The fact that this only covers one year is a little weird to me. I love PA, but still. 
 
And say that the donations cover the ad stuff, but not the podcast and other bonuses. The users payed hundreds of thousands of dollars, and the experience is not that different. 

Posted by fr0y0

@Akyho: If the money is intented to basically run parts of or the entire company and exceeding funds are put into projects, I doubt that they're going to make a lot of actual profit.

Posted by DonutFever
@fr0y0 said:

@Akyho: If the money is intented to basically run parts of or the entire company and exceeding funds are put into projects, I doubt that they're going to make a lot of actual profit.

They set the numbers though. I doubt they put the numbers on the dot for what they need. 
 
And the podcast is $75,000 more than the goal below it. I don't think a podcast for 1 year costs that much, especially seeing as they ran a podcast before, and probably still have the equipment.
Posted by fr0y0

@DonutFever: As I said in an earlier comment, you don't pay *for* that podcast. Of course a podcast isn't nearly that expensive - that would be nuts! Those projects are there to *motivate* you to pay, so the whole company runs 100% on money from the fans (instead of ads).

Posted by Philantrophy

Couldn't they just make a premium service, same idea without them jumping on the kickstarter wagon.

Posted by DonutFever
@fr0y0 said:

@DonutFever: As I said in an earlier comment, you don't pay *for* that podcast. Of course a podcast isn't nearly that expensive - that would be nuts! Those projects are there to *motivate* you to pay, so the whole company runs 100% on money from the fans (instead of ads).

But they were prepared to operate on the amount of ad money that they'd have at the podcast stretchgoal back at $550,000. So, they would profit on it.
Posted by fr0y0

@DonutFever: I don't think they would profit. If they get the 550k, they still need 450k to keep the company afloat (because the overall goal is still one million). And those 450k will have to come from the remaining ads on the site, since the 525k goal only removes the two banners on the homepage.

Posted by DonutFever
@fr0y0 said:

@DonutFever: I don't think they would profit. If they get the 550k, they still need 450k to keep the company afloat (because the overall goal is still one million). And those 450k will have to come from the remaining ads on the site, since the 525k goal only removes the two banners on the homepage.

I know that it doesn't remove all ads. That's my point.  
 
They say "OK, we can operate with ads off the homepage if we make 550k off the Kickstarter, as we figure that other ads will make at least 450k." 
 
They make more than 550k, and still have the ads which they figure they can make 450k from. So for every donation past 550k (Unless they reach a million), they profit from, right?
Posted by GERALTITUDE

I appreciate your post, and it made me consider this Kickstarter more seriously than I previously had.

My problem with the project is that it's not sustainable. They'll have to do this every X years to keep ads off the site and everyone paid. And you know what: internet ads aren't that bad. Ads before videos suck. But top bar, side bar? No big deal.

I wish Kickstarter would downscale. Call me paranoid or whatever but I don't like to see companies there whatsoever. PA has been around for a while and they've got lots of great events and a good community. Businesses need to make money on their own. With companies like PA, it drives them to succeed and make good content.

They should just offer subscriptions instead.

Edited by theManUnknown

I must say I'm a bit confused by some of the posters in this thread. In the same message I'll see these individuals express concern over the financial risks involved in this venture for Tycho, Gabe & co., and yet later ascribe to them an sinister desire to profit directly from their fans, apparently originating from a dissatisfaction with the revenue they're getting from ads alone.

This strikes me as paradoxical. On one hand, we seem compelled to caricature Tycho & Gabe as having solely financial motivations for launching this kickstarter, with the fundraiser being little more than a vehicle to exploit their fanbase; while on the other we can't help but wonder at the risk the company is taking with this, and the financial uncertainty it's putting itself in long-term.

These two premises strike me as wholly mutually exclusive, unless someone wants to argue that the folks at PA have taken leave of their senses altogether and no longer have the best interests of their own company at heart. Is PA exploiting the goodwill of their fans for profit, or are they taking a risk here? We need to decide.

Posted by Freshbandito

I couldn't recall any ads actually being on penny arcade, had to go and look whilst expecting them and sure enough, there they are. Incredibly unobtrusive and I never noticed them until prompted.

Posted by zombie_bigdaddy

@fr0y0: The thing I personally don't like it's that they are using Kickstarter to fund a company that can already sustain itself. I thought kickstarter was supposed to help peolple with cool/appealing projects find funding to , you know, kickstart their project themselves without having to involve corporations that may take advantage of them . I think PA should just have offered subscriptions like WM did.

Posted by algertman

Easy fast money for them. They are a successful business asking for a handout and people are gladly falling over themselves to give it to them.

Posted by Jay444111

Wow... people think it is a good idea to hand them money like this? Look at the title of the damn thing! They are SELLING OUT! Considering the trollish nature of them they have to be waiting to get the money and then spend it and drugs and hookers... or blackjack... Or something. Seriously though, don't give them money because they are just being greedy at this point.

Posted by stinky

i am fine with ads for free content.

contribute to giant bomb now and then for their content (love the jar) but with the penny arcade thing i'll get the benefits no matter what.

Edited by Sooty

I don't visit the site but even if I did I'd just say AdBlock and keep my wallet sealed shut.

People giving money to this confuse me even more than that Ouya crap.