Presspatron
After experiencing the decline in print revenue as editor of Tearaway magazine and evaluating revenue strategies while working towards the Master of Advanced Technology Enterprise, Alex Clark founded Presspatron in 2014. He talks us through why the donati
What was the motivation behind Presspatron?
My thesis evaluated a range of revenue strategies for online journalism. After completing initial market research, I found donations were more popular with survey respondents than paywall subscriptions. For my enterprise project, I decided to build a funding platform that would allow publishers to easily adopt the most promising business models. Our original platform had a different name and focus, but eventually evolved into the Presspatron platform that is being used today.
Why does a donation model work compared to a paywall model? [and] What’s been the response from those using it?
Donations and memberships build a stronger relationship of goodwill between publishers and their audience. I think this is the key reason why donations can be more successful than paywalls. We are seeing the emergence of a new ‘economics of generosity’ where financial transactions are driven by people’s values, rather than the cold-hearted rationality that forms the baseline assumption of so much old-school economic theory. In the context of journalism, you don’t need to force people to pay. Publishers need to create powerful journalism that fulfils its democratic mission of informing society, holding the powerful to account, exploring new ideas and basically just helping us to understand each other so that we can become a better society. Another advantage of Presspatron is it allows publishers to achieve the holy grail of pricing: dynamic pricing that matches the budget of every reader. By trusting readers to reward quality journalism with a fair price, you can generate higher revenue than a fixed-price paywall model. A publisher might charge $10 per month for their paywall subscription. By contrast, a Presspatron publisher might receive $50 per month from a wealthy reader and $5 per month from a reader with less disposable income. Both scenarios represent significant income that is completely lost under the fixed-price paywall model. The average recurring contribution is $11.40 per month, The average one-time contribution is more than $49, with 44 percent of supporters giving $50 or higher and 14 percent donating $100 or higher.
Where to next for Presspatron?
I’ve recently been on a trip across the USA meeting with dozens of publishers, who are now evaluating Presspatron with their teams or preparing for launch later in the year. To fuel our growth even further, we’re raising investment to boost our team and development capacity. We also have some exciting new features that are currently in the pipeline, as well as some ambitious long-term goals.