CROWDFUNDING WEBCOMICS: THE ROLE OF INCENTIVES AND RECIPROCITY IN MONETISING FREE CONTENT Liz Dowthwaite Thesis submitted to the University of Nottingham for the degree of Doctor of Philosophy September 2017 Liz Dowthwaite Crowdfunding Webcomics: The Role of Incentives and Reciprocity in Monetising Free Content Thesis submitted to the School of Engineering, University of Nottingham, in partial fulfilment of the requirements for the degree of Doctor of Philosophy. © September 2017 Supervisors: Robert J Houghton Alexa Spence Richard Mortier i To my parents, and James. ii Doug Savage, 2007 http://www.savagechickens.com/2007/05/morgan-freeman.html “They’re not paying for the content. They’re paying for the people.” Jack Conte, founder of Patreon “We ascribe to the idealistic notion that audiences don’t pay for things because they’re forced to, but because they care about the stuff that they love and want it to continue to grow.” Hank Green, founder of Subbable iii CROWDFUNDING WEBCOMICS – LIZ DOWTHWAITE – AUGUST 2017 ABSTRACT The recent phenomenon of internet-based crowdfunding has enabled the creators of new products and media to share and finance their work via networks of fans and similarly-minded people instead of having to rely on established corporate intermediaries and traditional business models. This thesis examines how the creators of free content, specifically webcomics, are able to monetise their work and find financial success through crowdfunding and what factors, social and psychological, support this process. Consistent with crowdfunding being both a large-scale social process yet based on the interactions of individuals (albeit en mass), this topic was explored at both micro- and macro-level combining methods from individual interviews through to mass scraping of data and large-scale questionnaires. The first empirical chapter (comprising of two survey and interview-based studies) investigated how members of the webcomics community made use of the Internet and social media to read and post content, interact with other readers and artists, and how they monetise these efforts. Creators and readers were found to use a large range of websites for webcomic-related activities; social media and the ability for creators and readers to get to know each other online is hugely important, often as important as the content of the work itself. Creators reported having diversified ‘portfolio careers’, and avoided relying on a single source of income as any one might fail at any time. The use of social media was found to be vital to all stages of the monetisation process; primarily because creators must build a dedicated community that is willing to spend money on them. Crowdfunding was found to be one of the biggest routes to monetisation, particularly as it lessens the risk of creating merchandise, combines selling items with a strong focus on interaction, and allows the main creative output to remain free. The second empirical chapter reports a large-scale scraping-based study of webcomics crowdfunding campaigns across the two major platforms most commonly used by creators, namely Kickstarter and Patreon. The two platforms were shown to exhibit distinctive characteristics. Kickstarter follows the traditional rewards-based model whilst Patreon is subscription- based, a model which is rising in place of paywalls which have traditionally iv CROWDFUNDING WEBCOMICS – LIZ DOWTHWAITE – AUGUST 2017 failed. Both Patreon and Kickstarter provide varied benefits but also some dissatisfactions were found. Kickstarter does not equal a steady income and Patreon rarely provides full-time income levels. Even when Kickstarter projects are hugely successful, they rarely do more than pay for the fulfilment of a particular project specifically, which does not tend to cover living expenses or provide a wage. While Patreon does allow creators to receive a recurring income, this rarely exceeded $1,000 a month. The final empirical chapter reports the findings of a study of psychological attitudes amongst crowdfunding backers and considers this in the light of psychological theories of giving and reciprocity. The study investigated why backers are motivated to give to webcomics campaigns, and their underlying attitudes towards giving, including factors that may convince them to give more. The main reason for backers to choose to support a crowdfunding campaign was found to be because they are existing fans of the specific webcomic or more generally, the campaign’s creator. The other main motivation given was the intention to more generally support the surrounding community. These two motives were strongly manifest amongst backers on both platforms, but they lead to different behaviours as Kickstarter backers tend to consider rewards more important than community. Kickstarter is more self-regarding and directly reciprocal, Patreon more other-regarding and generally reciprocal. Patreon backers are not more or less altruistic but they are more motivated to give by all reasons other than rewards, which they do not consider important. Both selfish and other-regarding reasons are involved on both platforms, and neither seem to crowd-out the other. In conclusion, people tend to pay for free content because i) they are fans and they want to own an item related to that fandom, or ii) they are fans and they want to be supportive and allow that fandom to continue. Overall, subscription-based crowdfunding was implicated as being the most suitable for creators who work on the internet, giving away free or intangible content, such as podcasts, webcomics, or livestreaming, whilst creators who work offline with tangible products that may appeal to a wider audience may find more success with rewards-based funding. v 1.1 THESIS MOTIVATION ACKNOWLEDGEMENTS To my supervisors: Thanks to Rob, Alexa, and mort, who provided me with support and encouragement, tempered with constructive criticism, to get me to this stage. I’m not even mad that mort left. To my colleagues: Thanks to everyone in Horizon, Human Factors, and CREATe, who provided an interesting working atmosphere, good advice, interesting conversation, and fun times. To the webcomics: As well as many years of entertainment and procrastination, the creators I approached and the communities surrounding them, have never been anything but supportive and helpful. In particular I would like to thank Kate Ashwin and John Allison for equal parts enjoyment and insight. To my friends: You are like family to me and you (hopefully) know who you are. First off, my eternal gratitude goes to Kyle and Chris who took the time to proofread for me. Also, in no particular order, thanks to: MC Terrell, Richard, Will, Dave, Ayse, Vicki, Martin, Annie, Neil, and the whole Cornish tribe. And to everyone else who kept me sane by plying me with food, wine, and tea. To my family: I couldn’t ask for a better bunch. We might be spread out across the world but I love every one of you. Thank you for letting me be me. To the cats, Optimus and Spot: Meowmeow meow meow. Meowmeow meow. Finally, to James: Without your love and support I wouldn’t have made it this far and I will be forever thankful to have you in my life. vi 1.1 THESIS MOTIVATION CONTENTS 1 INTRODUCTION ............................................................................................... 1 1.1 Thesis Motivation ...................................................................................................................1 1.1.1 Introduction to Webcomics ....................................................................................................... 1 1.1.2 Introduction to Crowdfunding ................................................................................................. 8 1.2 Objectives ............................................................................................................................... 13 RQ1: How do webcomics communities interact online and how does this translate into monetisation? ................................................................................................................................. 13 RQ2: How does crowdfunding work in the webcomics industry? .................................... 14 RQ3: What motivates people to give to webcomic crowdfunding campaigns? .......... 14 1.3 Research Areas and Contributions ............................................................................... 15 1.4 Thesis Structure ................................................................................................................... 17 1.5 Chapter Summary ................................................................................................................ 18 2 HOW DO WEBCOMICS COMMUNITIES INTERACT ONLINE? .......... 19 2.1 Introduction .......................................................................................................................... 19 2.1.1 The Importance of Community and Social Media to Webcomics........................... 19 2.1.2 The Monetisation of Webcomics .......................................................................................... 23 2.2 Methods ................................................................................................................................... 29 2.2.1 Materials and Procedure .......................................................................................................... 29 2.2.2 Participants ...................................................................................................................................