Over the last couple years, reddit traffic and usage have continued to grow by leaps and bounds — in October 2012 alone we were up to over 3.8B pageviews and more than 46 million unique visitors. Our server costs also continue to grow, so we have a choice to make: we can start running a bunch more ads, or we can give you, the community, more reasons to support the site with your own money through reddit gold.
Reddit CEO Yishan Wong, blog.reddit.com. Now is the Time… to Invest in Gold.
Avoiding overt commercialization because you’re afraid of alienating your online community is honorable, but it will eventually lead to a big question — where, then, do you make money?
Wong, as Mathew Ingram pointed out earlier today, has subtly reminded users about Reddit Gold, a paid membership that comes with perks. Wong also told readers that, no, they are not a very profitable site. They need help, and so they’re asking members to pay if they can.
Ingram thinks it may work, and that it could even work for news sites:
There’s no question that being a community already gives Reddit a better chance of success with this kind of thing, but it is a model that I think more media companies could implement as well, instead of just putting up a blanket paywall around all of their content. This is the idea behind what Wall Street Journal managing editor Raju Narisetti and author Jeff Jarvis have both called a “reverse paywall” — which provides benefits to loyal users and readers instead of charging them — and it seems like a much better fit if what you want to do is build a relationship with your community.
The key is to build and maintain a community where users are able to build reputations for themselves, either through loyal interaction with content, or continued contribution to the community. Think karma.
It may also be that the community needs a strong membership within its large population. Members with Reddit Gold, however, are no such group. But one user has the right idea — noting that some members occasionally see their own artwork posted without attribution, it was suggested that there be a “creddit” button which links to and gives points, perks, etc. to the members that created the shared work.
As Ingram points out, other robust communities have disappeared after the owner of the site tried to profit from them:
Those kinds of decisions, along with other design-related moves that Digg made, arguably poisoned the site’s relationship with its community to the point where many core users left — in many cases for Reddit — and the site’s long slide into irrelevance began.
How can Reddit and similar sites (and even news sites) make money, then? Well if it’s all hinged on their community, it doesn’t hurt to have a strong one that’s filled with, as Clay Shirky has put it, love — members who continue coming back to have conversations, share content and create.
1. The model which has guided many people’s thinking in this area, the 1/9/90 rule, is outmoded. The number of people participating online is significantly higher than 10%.
Above is just one finding of 6 by BBC’s Holly Goodier, who has spent a good deal of time assessing online participation patterns in the UK. Here are the other 5, which she and her team culled from a general agreement that the former audience is becoming more and more active online:
2. Participation is now the rule rather than the exception: 77% of the UK online population is now active in some way.
3. This has been driven by the rise of ‘easy participation’: activities which may have once required great effort but now are relatively easy, expected and every day. 60% of the UK online population now participates in this way, from sharing photos to starting a discussion.
4. Despite participation becoming relatively ‘easy’, almost a quarter of people (23%) remain passive - they do not participate at all.
5. Passivity is not as rooted in digital literacy as traditional wisdom may have suggested. 11% of the people who are passive online today are early adopters. They have the access and the ability but are choosing not to participate.
6. Digital participation now is best characterised through the lens of choice. These are the decisions we take about whether, when, with whom and around what, we will participate. Because participation is now much more about who we are, than what we have, or our digital skill.
See here for more on the 1/9/90 rule.