Tip-jar journalism: Slim pickin’s for pubs
For those who missed the paean to Kachingle by my friend Steve Outing (and a follow-up here), it is a service that would let website visitors pay for content on the honor system. Here’s how it would work:
Instead of requiring surfers to pay for content before they view or listen to it, Kachingle would install a button on participating sites to enable a visitor, if so inclined, to tithe a few pennies to the publisher after consuming the content. It’s strictly voluntary. A skinflint could surf all day without spending a penny.
In all the 3,842 words of his original argument for Kachingle, however, Steve forgot to do the math. So, I did.
And I discovered that a Kachingle-like system might produce some decent revenues at the most heavily trafficked newspaper sites but wouldn’t make a material contribution to covering the costs of producing any paper’s website.
To calculate the potential of the tip-jar system, I obtained the number of page views for several newspapers in 2008 from Nielsen Online. I assumed that site visitors would click the Kachingle button on 2% of the pages, which is a reasonably high response rate for most sorts of voluntary activities on the web. I further assumed that the newspaper would get an average of 2.5 cents per click, net of the commission Kachingle charged to participate in its network.
As you can see in the table below, the tip system might generate revenues of nearly $3.7 million a year for the New York Times, the busiest of all newspaper sites with 7.4 billion page views in 2008. The $3.7 million would pay 24.5 journalists making an average of $150,000 per year. Although that sounds pretty good, bear in mind that the paper has a newsroom staff of about 1,300 individuals. So, Kachingle would cover the cost of only 2% of the staff.
In the case of the San Diego Union-Tribune, where web traffic last year was 110.3 million page views, the projected Kachingle revenue would be $55,154 per year. That’s enough to pay for three-quarters of a reporter making $75,000 a year. (In all cases but the NYTimes, I assumed average pay and benefits of $75,000 per reporter.)
The web traffic is too low for Nielsen to measure in places like Peoria, IL, New Haven, CT, and Tuscaloosa, AL. It seems safe to assume that tips from Kachingle would be proportionately modest in each of those markets, too.
On to the next idea…