ARTS & FARCES internet

Since early February 1993, when we migrated our electronic publishing endeavors to the web, ARTS & FARCES internet has been a nonrival, nonexcludable, pure public good. Like public broadcasting or a lighthouse, it’s a pure public good in that everyone can use it and no one can force you to pay for using it. Moreover, ARTS & FARCES internet is a nonrival good: you can use it (mostly) all you want without reducing the content available to the next user. Finally it’s a nonexcludable good in the sense that anyone that finds the publication can use it.

Maybe it’s time to change our approach and make ARTS & FARCES internet an excludable good, available only to those who contribute in some way. After all, the costs to produce ARTS & FARCES internet are not insignificant, although the costs to replicate and distribute its content approach zero. While ARTS & FARCES internet has never been intended to be a profit center, one of the few polices we have is that every project must be fun and sustainable.

The ARTS & FARCES partners are currently re-examining our online publishing business model and while we hope to retain ARTS & FARCES internet as a nonexcludable good, we’re not married to the notion.

Since its inception in 1979, ARTS & FARCES has maintained an open books policy. We have a history of making our business models, plans, profit margins, and financials transparent to our stakeholders. So, let’s take a back-of-the-envelope look at the hard costs associated with sustaining ARTS & FARCES internet:

And that US$5,400 annual hard cost figure does not take any editorial, maintenance, or managerial activity into account and therefore doesn't reflect the true costs associated with ARTS & FARCES internet. For now, let's just keep that figure in mind; we'll come back to it later.

Next, let's take a gander at our pitiful revenues:

We first started accepting underwriting in late November 2001, so we're looking at only about five months of revenues, compared to a full year of hard costs. Clearly, ARTS & FARCES internet is not sustainable as it currently exists.

So, what would it take to make ARTS & FARCES internet sustainable? Well, if we were Salon, it would take millions. David Talbot, Salon's founder and editor, is seemingly proud that he's reduced the publication's annual operating budget from US$35 million to under US$8 million, and he's still predicting soon-come profitability. Before you scoff at the comparison, consider this: that US$8 million per year buys, at best, one really good Salon article a week.

I'm convinced that ARTS & FARCES internet can do much, much better with a much, much smaller operating budget on a much, much smaller scale. Let's have a look:

Will US$185,400 per year allow us to publish on a world-class level? Of course not. But what it will allow us to do is publish some of the best original content on the net on a weekly basis. That laughable fraction of Salon's annual operating budget will allow us to commission one major article a week at a fee structure (US$2 per word for 1,000 words) that's double the top going rate in print or online. That operating budget also allows us to pay each of the ARTS & FARCES partners US$40,000 annually for editorial, managerial, and maintenance and repair services.

How do we raise US$185,400? Through user underwriting. On a good week we can and have served between 40,000 - 50,000 users with our current hardware, software, and connectivity. If only 15,450 users provide basic-level underwriting each year, ARTS & FARCES internet becomes sustainable. Here, let me draw you a picture:

Here's the distribution that I would like to see because it's the most sustainable:

That would raise our annual operating budget for ARTS & FARCES internet to US$200,000. The additional revenue would allow us to contract for about US$15,000 worth of programming and design services.

That revenue distribution model is attainable, and I'd like to start with the 2,000 underwriters at the US$25 level over the next two months. Show your support for independent media by becoming an underwriter at the Sponsor (US$25/year) level. That underwriting level will allow us to continue producing ARTS & FARCES internet as a nonrival, nonexcludable, pure public good. If we don't reach that level of underwriting by the end of June 2002, we'll be forced to look at an excludable model or some other alternative.

2,000 at US$25 by the end of June. It's important. It's possible. It's sustainable. It's up to you. Thanks for your support.