February 3, 2009 Update: After you’re done with this please check out Jason’s excellent part deux
I haven’t allowed myself the luxury of sitting down to write a decent post in me for some time, so this feels good.
Especially because it’s one of those ‘James comes out on top at the end’ posts, which is always nice to share – and it’s also a topic very close to my heart- making WordPress MU work in terms of revenue, and specifically, where Edublogs is concerned (although I’ll also make fairly frequent reference to WordPress.com too).
Now, to start off I should note that Edublogs (a WordPress MU site for education) was started off not as a business but to meet the practical purposes of providing blogs to academics via a simpler approach than individual WordPress installs. It also wasn’t started off buy a business-person, it was started off by a lecturer in education design (me) without even the merest whiff of funding and on a $7 p/month hosting plan.
Now, almost 4 years later, it’s one of the largest blog hosting sites on the web, employs multiple staff, runs on hosting that costs upwards of AU$10k per month and, most importantly, is a sustainable (and growing) business.
How did we do this?
Well, by mucho trial and error, I can tell you – there’s almost not a single revenue model we haven’t tried – and some have worked, some have worked (a bit) and some have been abject failures – here they are, in reverse order of success – with our experience tied in to each.
Donations
I have a personal objection to donations, and I think contemplated it once and quickly put it away – I mean, why should anyone donate to you as opposed to , say, Oxfam – and if they did, what would they be getting out of it (as opposed to, say, sponsoring a child)? It sucks, you’ll hardly get any, and it’s basically begging.
Works for Wikipedia because they are one of the largest websites in the world and provide something of intrinsic value that a lot of people use all the time – won’t work for you. Sorry.
Sponsorship
Our first semi-successful model, we wanted to cover our burgeoning hosting costs so we reached out and a small independent ed tech company in the UK gave us $3000 for a years worth of advertising and to integrate with their site for users… I reckon they got a good deal :)
The key to this one is that it isn’t advertising – it’s finding a partner who’ll enjoy a mutually beneficial relationship with you, and as such is a great way to build your site and exposure, but perhaps not the greatest way to try and make a lot of money unless you’re starting from a position of some serious strength (and how many of us start like that eh?)
Advertising
Another one of the semi-successful models. But, as an online editor at theage.com.au I found out the secret to advertising – are you ready?
… drum roll …
Be a big, established, successful media company – or, at the very least, be a magazine that’s being started by one or an experience big media exec with a few mil backing. Or be Darren Rowse :) Or, really really clever while at the same time being wordpress.com (read on for that bit).
Other than that advertising for the rest of us is at best semi-rewarding and at worst hardly even coffee money.
But that’s not to say that there aren’t great ways of doing it.
For example, we started showing ads using the brilliant adapted Who Sees Ads for WPMU plugin – which essentially allows you to place ads across themes and then determine, with site-wide rules, how they are displayed.
This is how WordPress.com show ads, and it’s utterly brilliant, with only one drawback. You need to be absolutely huge for it to work, for example, Edublogs does just over a million uniques a month and that *simply isn’t enough* – by my calculations you’d need at least 3-5 million before you started covering your hosting costs, 10 million before you start drawing a nice wage and 20 to be a viable company – and also have some sway with your Adsense eCPM and custom ad units (using this method alone). Luckily for wp.com they have 266 million and it’s far from their sole revenue source… nice work guys :)
And, while we no longer use this approach (I’ll get on to how we much more effectively use advertising at the end), it’s also a great way to display all sorts of other things across your network – but that’s by the by, let’s keep on thinking about the MONEY!
Selling Something Else
Yep, it’s quite simple, you offer a great, free, maybe even advertising free, site in the hope to shift some other product… for example, pets goods (for pet blogs).
And this can really really work! For Edublogs we’ve been selling for the last 2 years Edublogs Campus – basically a hosted standalone version of Edublogs for individual schools and it’s done really well. Had we been selling school IT resources, textbooks or something else – I think that might have worked well too.
Sure, you have to take into account that you are going to be selling to a particular crowd – but you can also turn them into affiliate sellers for you, and use their technical skills to your advantage (they are most likely gonna be pretty techie broadcasters) – in fact you can even get them to send out email invites (via imported web mail address books – anyone say ‘Twitter’…) to sell whatever it is that you are offering.
So this one get a thumbs up from me.
Upgrades
We’re almost there, because this can be an extremely successful revenue stream in its own right.
However, it’s got to be used wisely, and the most important thing to remember is that people won’t pay for stuff they don’t want or need – so, don’t go offering them the icing when you could be offering them the cake (if that makes any sense).
Let’s take wordpress.com for example – now they were really keen on early adopters and so the CSS editing upgrade made perfect sense early on (I have no idea how successful these were by the way), but they also have some excellent and very clever tricks up their sleeves – for example – you may have a gazillion GB already as upload space but you can’t upload anything beyond a large picture to it unless you purchase the extra space upgrade… clever, being able to upload podcasts, videos and alike is definitely the cake.
And now let’s take Edublogs, we offered a whole stack of cool extra features, twitter integration, more plugins, extra storage, respect, cool badges and more… we simply set it up using our simple custom Upgrades (with PayPal integration) plugin…. it worked brilliantly… and it so failed it wasn’t funny.
You see we already allowed people to upload what they wanted. And already gave them heaps of cool plugins. And they could do all sorts of cool stuff regardless. Hardly anyone signed up, and those that did – I suspect – did mostly out of the kindness of their hearts.
FAIL. Indeed.
But, all was not lost, because this whole cake thing occurred to me and I got myself thinking about a great game I used to play back in the day called Hattrick…
Supporter
Now, Hattrick is a football management game, and its free, but you can sign up to be a Supporter and OMG it’s cakelicious (ok, will stop the cake stuff now).
You get to see the faces of your players, extra tactical tools, a star next to your name (means a big deal in a site which is also a social networking setup as much as anything else) and all sorts of other great stuff. The game itself is completely free to play, but I understand that a goodly % of users sign up to be a supporter after a bit (or gift it to each other) – and, as there are almost a million players, and being a Supporter isn’t that cheap (something like $50 annually), they do pretty well!!!
So, moving onto WPMU, let’s forget the ‘upgrades’ bit of things - let’s make it much simpler; free users get x / Supporters (or whatever you want to call it) get y.
And lets say x = ads on their site / no access to plugins / no acccess to other extra features / reduced storage space etc.
And lets say y = no ads / masses of plugins / other great features / 5GB space / nice badge etc. etc.
Well, that’s what we’ve done. And it works. A lot.
And even better – you can do it too, we’ve released the Supporter plugin over at WPMU DEV Premium (so you get priority support / upgrades and general goodness as well).
Put simply, you can use this plugin to create your own Typepad, or Squarespace or a premium blogging platform that allows users to do (and receive) so much more than they would for a free blog – or from a free blogging site like blogger or wp.com.
Hook it into Supporter only personal support, add extra features to your site that are supporter only, set them up with free classifieds, generally give them some serious loving… either way, your business model just started looking a great deal healthier!
Or, go one step beyond what we do and just restrict absolutely critical ingredients, like ‘Write Post’ to Supporter only – that way you can give new users 14 days free, and then shut them down until they pay (just like Typepad). The best thing is they get to log in and see the entire site and backend, but not use it until they’ve paid.
Did I mention we’ve included a special plugin with the supporter pack that does just that for you :)
And did I mention it’s all based on PayPal subscriptions not single payments – unless you want it to be… now I don’t need to explain why that’s better do I?
And that’s where we’re at now, and I’m sure things’ll change again in the future, but I gotta say I’m pretty happy with the present. And, at the present, revenues are is where it is at.
Have I messed any revenue approaches you have tried? Do you completely agree or disagree with any of the above? Let me know in the comments :)
[BTW this post has (much to my delight :) also been translated into Spanish!]
James Farmer on Google+
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Great article; create products, set up your own Affiliate Network, get affiliates to sell your products, rinse and repeat. Nice.
James
Being an IT Networkk Admin at a Secondary College down here in Melbourne I have certainly seen the increase in students and staff using some sort of Blogging system, for us it is a MS Sharpoint solution but would probably much preferred a EduBlog one…..
Thanks Luke :) And what’s more you can pick up all the tools you need for the purpose at http://premium.wpmudev.org
Daniel, contact us to talk about Edublogs Campus anytime: http://edublogs.org/campus/contact/ – we’ll throw in a special discount for you too based on Melbourne-ness :)
You can check out just how damn good Campus is at our sandpit site: http://universityofblogs.com – just log in and play around!
Interesting article. And yes, hosting yourself does cost money – I pay a lot more for my site than support at edublogs would ever cost. Of course, I get even more features (course, I have to code them myself, but…)
Thanks Stephen, heck though I’m aiming to cover pretty much every required feature this year for supporters though :)
Uh, James! You just tempt me for subscribing after waiting for a long time.
I do need this! Hope you make a surprise every day or at least week. I’ll join for year. :D
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I agree 100% and can even suggest a way to test if you’ve reduced the free features enough to make it worth paying for the ‘premium’ features.
You need to get emails from users of the free version from time to time, suggesting to you that you make the premium features free for some time, or for students or for whatever else. Then, you know that you’re hitting the right nerves.
If people take the time to complain about what you’re denying them with the free version, it means they need it.
I get about 3 such emails per week, out of several dozens of new customers and several hundreds ‘free version’ users.
Great Article! I have been struggling for a while with a revenue model for my mu site. I have played with many of theses in the past. I think another thing to note that the simpler you can make things the better!
Hey James, Have you guys ever advertised or has it just been word of mouth?
James,
I want to thank you for sharing these details with us all. My first foray into an MU powered site was focused on a particular target niche of users, and I loaded it up with everything they could possible need in the way of plugins. Then I installed the Upgrades plugin and had nothing to offer other than more space. Needless to say, it has failed in generating any meaningful revenue.
I have just started developing another MU site for a different niche, and although the core goal is to create a useful and nurturing social space for this niche, I would like to turn it into a self-sustaining and profitable venture.
What you’ve written above is great advice and will help me to plan the site accordingly. I really appreciate your openness, and everything you have done for the MU community.
wow cool blog – adding it to my favorites thx
Thanks guys :)
@John Turner – nope, never advertised for Edublogs (in a traditional sense) although have struck up a few hosting for buttons deals but they are pretty minimal.
@Amir Helzer Not wrong! And yeh, we’re getting plenty of complaints.
@Face Park Subscribe away :) We hope to offer real value for money through http://premium.wpmudev.org – it’s not just about the code, it’s about the support, bug fixing, upgrades and even the community of advanced WPMU users.
The code is GPL?
Heya Matt, nope – I’m afraid it isn’t – it’s a bit like your CSS editing feature, except that we’re actually releasing ours in some form ;)
Next post is about whether it’s OK to sell plugins or not (I’m guessing we’re on different sides of the argument here) – would you like to contribute your pov to the post?
This has been covered pretty extensively in the theme world.
Long story short, it’s fine to sell things, including exactly what you’re doing on the site today, but insofar as the code links or uses any core WP functions it should also be GPL licensed.
Our CSS editing feature is not distributed to any third-parties, so it doesn’t need to be GPL any more than a wp-config.php file does, but no one has every asked me for it before and and if you want it we could take a few hours to clean it up for release.
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Thanks for that but I think it’d be fair to say that the case is still open wouldn’t you? However, I’ll quote you in the post and do a bit more research myself.
I’m a little skeptical though for a number of reasons – for example, aren’t there plenty of GPL softwares with propitiatory running off or alongside them? Anyway – will leave that for later.
But just quickly, in your view, can we still sell it (or, what we’re really selling, support – upgrades, etc. etc.) if we GPL it?
Also, I think it’d absolutely rock out if you guys released the CSS editing plugin – would make me even more of a fan!
Matt – since you opened the door: It would be great to have a copy of the CSS editing feature.
Thanks!
I second that!
Nice article, this has a lot of good ideas for anyone wanting to start their own online blog business. thanks for the tips.
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Just wanted to note that there’s a couple of CSS plugins out there that already do this. :)
Hi James, when it comes to the code the case isn’t really still open. As long as your customers are getting a copy of the GPL with the plugins then it is all good.
Thanks Lloyd, can you point me to some posts / resources or anything else that could inform my next post on this?
Alternatively your perspective (I can quote and link :) would rock out – needless to say it’s a pretty big deal from where I sit and I’d like to put together the most informed post & decision I can.
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Hiya Matt (et al) – here’s my thoughts on your GPL thoughts :)
http://wpmu.org/wordpress-and-the-gpl/
Hey Matt!
Along with the CSS editor, I would also be curious how you guys do the remote login redirects described here:
http://ocaoimh.ie/2008/08/11/wordpress-mu-domain-mapping-01/#comment-653248
Do you have plans of releasing that as well?
Thanks
The release of the CSS editing feature of WP.com would be realy great. Some months ago i try Jason’s Customciser, but it wont work.
Best regards
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Lloyd, where’s the GPL doc for Akismet?
@Matt: “Our CSS editing feature is not distributed to any third-parties, so it doesn’t need to be GPL any more than a wp-config.php file does”. It’s a plugin isn’t it? So it has to be GPL doesn’t it?
“but insofar as the code links or uses any core WP functions it should also be GPL licensed.”
@matt this feature would be very useful for WPMU users. I beg for the release.
Mike, Akismet is a general SPAM protection service not dedicated to WordPress. As you know, the Akismet WordPress plugin is available for download.
Elad, please review the link that you give. You’ll note that it says that “The WordPress plugin is GPL and fine for use as a reference.”
As Lloyd notes, the GPL doc is supposed to be included with the software.
It’s rather silly actually but it’s troublesome when folks point out rules but fail to follow them themselves.
Mike, I get your point and you are right, the GPL doc is missing, but they do say it’s GPL.
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@ Matt: I am with Scott.
There are many of us using WPMU (especially in higher ed) that would LOVE this feature to be released. Pleeeeeease…. :)
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So has Matt released this yet?
Interesting post and very informative. I enjoyed it. I can also recommend ECWID as an ajax alternative e commerce solution, but I do like WP e-Commerce. Your visitors also need to sort out their online legal documents such as website terms and conditions and a privacy policy before they start trading online.
7 years after implementation EDUBlogs is still going strong and is a great resource! Love it.
Its all pie in the sky while we pay to test mu – No money to be made