Tips, Charities and Businesses

This blog holds that arts managers can learn interesting things about pricing from non-arts businesses, and today I want to look at pricing of internet content. Preparation and presentation of content is not costless, and has to be financed somehow. It might be financed by the content provider herself, happy to do the work of writing a blog with no expectation of financial reward for the activity. Or it might be financed through bringing viewers to advertisers, or through a “tip jar”, or through charging for full access to content, with only some content being available for free.

Felix Salmon has an excellent read-the-whole-thing post on the subject, and I was particularly struck by the distinction to be made between “charities” and “businesses”. Andrew Sullivan has begun collecting subscribers for his blog, and in an interview with Salmon, Sullivan says:

This is not a tip jar. And it is not a pledge drive. It is a subscription. And that makes it a different proposition. It’s telling people I’m not an amateur, and I’m not a charity. I’m doing work that I’m asking people to pay for. And it seems to me that at some point, we have to say that, in new media. Or else it is not going to continue to exist…

I had two pledge drives early on, in 2002 and 2003, which netted a certain amount of money. But this is a different model. This is trying to make it sustainable, long term: don’t give it money just because you like me. We are trying to create an actual site that is news and opinion that people value and pay for, and become associated with in the long run. We could have done a tip jar. We decided no. We wanted to be a business. And do it the right way.

Sullivan still provides a lot of content free for people who choose not to subscribe, and indeed the question of how much to provide free and how much to reserve for subscribers is complicated: too high a wall for non-subscribers and you end up not attracting new readers, and losing some old ones. The blog is also a way for Sullivan to market himself as a public speaker, media commentator, and book author, and a low price for blog content can be a way to build up demand for his other – money-generating – activities. And internet sites with high advertising content need to deliver page views.

But let’s focus on that quote: “I’m not an amateur, and I’m not a charity.” This speaks not so much to pricing, subscriptions, and donation jars as it does to the attitude we bring to our work. Yes, nonprofit arts organizations are “charities” according to the Internal Revenue Code section 501(c)(3), but does internalizing that word alter the way arts organizations understand the value that they bring to their audiences and communities? Is charging admission for (at least part) of what is being presented to audiences fundamentally different from a donation jar at the exit, not just in terms of letting those who want to give more the ability to do so, but in a deeper sense? Nonprofit arts organizations are businesses. They have employees, capital costs, expenses and revenues. They are not only businesses, but they are businesses, providing something of real value to their communities, the cultural world, and future generations, that can be demonstrated to donors, members, volunteers and audiences. Decisions on nonprofit pricing – even in cases where it turns out the best price is zero – begin with that understanding.

Footnote: I taught for a few years in Tasmania, and learned quickly that Australian culture does not include tipping of waitstaff, cabbies, and the like. My first take was “well, it must be their wages are better than what is offered back home, so no need to tip.” But that wasn’t right. It wasn’t so much about wage levels, as about how workers perceived the value of the work they were doing, that these were real jobs involving real work and real value that should not have to rely on the good graces of tippers.