I'll jump in here, since I'm busy monetizing a niche community.
I run http://www.obsidianportal.com, and we're just turning 3 years old. I won't give stats on users, uniques, etc, since we keep that close to the vest. However, we do have over 10k RPG campaigns registered, and about 250k pages of content.
Most important, we're actually decently profitable, after 3 hard years. Still not ramen profitable, but it will provide a nice chunk of change this year. If our growth continues, I may be able to support myself full time in another 2-3 years, but I'm trying not to be too optimistic.
Before someone says, "You can make money off your passion" or "Do what you love and money will follow", I'd like to see their own personal evidence. I'm walking that road and I know how hard it is. Possible? Yes. But definitely not easy, and it takes waaay more than just passion. It takes late nights, hard work, thick skin, and a good bit of luck. Oh, and forget about "fail fast." If you do what you love, be prepared for a long, hard slog up the mountain to profitability. I love my community and my chosen subject matter, but it's still work and it's still hard.
To the OP: Can you point to a community/passion that you've personally monetized into a living? Maybe it's too much to ask that someone be a personal expert on everything, but being in that boat myself, I get a little irritated when someone breaks out the "Do what you love" line without backing it up with personal experience. That's not to say that the OP hasn't done it, just that I didn't see any evidence in my cursory glance over the blog.
One last bit of advice: All our success is due to charging subscriptions. Forget ads. They suck. Besides being crazy variable, they also annoy your users. Find a way to charge money for something. No, you'll never get as big as Facebook or Twitter that way, but that doesn't matter. You'll never get as big as Facebook or Twitter anyway, so don't even try to walk that road.
I used to think the same thing OP said because I had done it. It turned out, though, that my niche was poker, a game that conditions the people that play it to blow through money like there's no tomorrow. My niche was full of a) people who have a lot of discretionary income and aren't as attached to it as people generally should be and b) people who makes six figures (or more) per year off of group a.
Your niche is probably much poorer and much thriftier, and then much smaller on top of that. So you're going to have to get tremendous market share (pretty much all of it perhaps) to make real money.
The same is true with ads. I could get thousands per month running ads on my poker blog at a time when I hadn't posted on it in 6 months because anyone who clicks an ad is going to make the poker site $100 on average. My guess is you'd be lucky to make anything off someone who clicked an ad on your site.
I still think that most passion's are monetizable enough that you could make a real amount at them, but maybe not all are, and the difficulty in doing so and the maximum you can make varies widely.
True. Having the right "passion" makes a big difference. If you have a passion around doing advertising for Fortune 500 companies, you'll probably do just fine. On the flip side, if your passion is helping penniless orphans...it might be a while before you can monetize that ;)
Before someone says, "You can make money off your passion" or "Do what you love and money will follow", I'd like to see their own personal evidence. I'm walking that road and I know how hard it is. Possible? Yes. But definitely not easy, and it takes waaay more than just passion. It takes late nights, hard work, thick skin, and a good bit of luck. Oh, and forget about "fail fast." If you do what you love, be prepared for a long, hard slog up the mountain to profitability. I love my community and my chosen subject matter, but it's still work and it's still hard.
I apologize if my post was irritating to you, and you're right that I didn't elaborate on how difficult this can be, but my point wasn't that it's easy, just that it's almost certainly possible if you're willing to put in the work. And if you're passionate about it and you enjoy it overall, what do you have to lose? Your story is a pretty good illustration of what I'm talking about.
And no, I'm not quite to the "making a living" point with the niches I'm monetizing (though I know others who are), though I think I will be in the next 12-18 months, assuming growth continues as it has been. I also don't put as much time and effort into them as I could/should, primarily because of my startup.
If you're passionate about something, it hardly ever feels like work. I absolutely love what I do and it feels like i'm just playing every single day. If money comes, then perfect. And if it doesn't, i'd probably be enjoying too much to notice.
Congrats on your success, then. 18 months away from making a living is a great place to be. Assuming it's web based, do you have links to the sites/projects/whatever? I'm curious to see, and I always try to pick up ideas from others.
Our http://darkmists.org MUD has a similar position to this, especially with our niche -- fewer people want to play an online RPG for the RP than for the PK aspects. The topic has often come up about making money from this game, at least to pay the server bills. There is some concern that once we start accepting money, we lose some of the freedom to manage rule-breaking or to involve people's characters in various RP events that may or may not be to their personal enjoyment. We can come up with ways to make the money, such as selling virtual items, but there is a certain responsibility to ensure people derive sufficient value from what they buy, such as equipment that sticks with their characters and is not easily stolen by the neighborhood thief or taken by their next killer. Still, we have enjoyed this for about 13 years without making the money; would involving money ruin that experience for us and our playerbase?
I always suggest avoiding the "pay the bills" mentality. For most of us, running a site costs less than cable tv. If you want enough money to pay the hosting bills, just work an extra hour at your regular job each month. Enjoy the site as a hobby and forget about money. There's nothing wrong with that.
Only try to monetize if you really want to make serious money. Otherwise, it's just not worth the hassle.
As to your specific points, I try not to let people lord it over me that they're paying money. You have to assume that they knew what they were signing up for when they click the "pay now" button. A paying user complaining about something isn't much different from a non-paying user. Plus, we've found that paying users tend to complain much, much less than free ones. They tend to be fanatical supporters who also understand that I'm not going to cater to their every whim.
So, don't let paying users pull you away from your vision any more than freebies. If they get too angry just refund their money and move on. The heartache (and time) isn't worth the price of 1 subscription. Plus, this is rare. I've only come close to doing it once in almost 2 years of charging subs. I was about to do it when the guy shut up and stopped complaining. He didn't stop paying, though ;)
The real issue is that most folks don't know how to be real entrepreneurs. They are think they are in business, but they are actually just engaging in a personal hobby.
If you are creating a forum, tossing AdSense of it and waiting for the checks to roll in, you may be in for a long ride. But when you start asking: "What do my people want?" and then going out, hunting and digging for it and finally determining the best way to present it to the audience -- now you are thinking like a entrepreneur. Rinse and repeat ad infinitum. Now watch the checks roll in.
The failure is not the model, it's the implementation.
Forums in themselves don't make any money. Access to a big, active, interested market is worth an absolute fortune if you have the Direct Marketing expertise, but most forum owners don't. There's a reason why all successful print magazines have teams of advertising salespeople. Advertising is still a relationship business, especially when dealing with niches.
Do you know why you get an inflight magazine on a plane? Because it's hugely profitable for the airline. They are prepared to pay big chunks of money to writers, photographers, designers and printers just to be able to sell ads targeted at the niche of "people on planes". How lucrative do you imagine a super-targeted forum might be when monetised properly?
Direct Marketers treat mailing lists as a saleable commodity. A relatively cheap mailing list costs $50 per thousand names per mailing. A high quality list for a suitably lucrative niche list could sell for ten times that. Sponsorship of a regular newsletter with good readership could be worth even more if sold properly, likewise sponsored subforums.
That's the simple stuff, the things proper businesses do when they have a huge list of people who like to buy the same stuff. Today though, the sky is the bloody limit. I feel all tingly in my private area when I think of the Customer Development possibilities for someone who has a trust relationship and constant two-way communication with that many prospective customers.
A forum is a publishing business, potentially a highly lucrative one. It's not going to monetise itself. If you don't have the skills and aren't ready to learn them, you need to bring in people who do.
I know a guy who runs a very successful forum...#1 forum for a particular car niche...has 110K registered users, and about 50K uniques a month, and 1 million page views.
Know how much he makes? $2,500 a month. $500 from Adsense, $1000 from selling car parts, and $1000 from direct advertising sales.
$2,500 is not bad, until you throw in the cost of servers and bandwidth....after all is said and done, at the end of the month he clears about $600.
Sure $600 is nothing to sniff at, but he's been running the forum for 10 years now....so you would think at that level it'd be making a ton more money than that.
You're absolutely right that after 10 years, he should be making more from that website. That stats speak for themselves. You alluded to the fact that 2,000-3,000 people might be daily active visitors (just considering your "night" comment). How many of the 110k users are active? If he's only getting 50k uniques a month, it's likely that only 10%-20% of his registered users are active.
A registered user doesn't count for anything if he/she doesn't come back.
Either way, I think his issue is proper monetization. Everyone hates Adsense, they're return visitors to the forum, not visitors from search (Adsense does better with visitors direct from search).
Servers and Bandwidth for a site doing 1 million page views a month should cost at most a couple hundred bucks, maybe $500 if you go overboard. If he is spending $1900 a month on servers that is ridiculous.
he has a lot of regulars. Gets something like 2,000-3,000 people on at the same time every night + it's an old site, so there are a ton of threads, I think something like 2 million at this point.
Infrastructure wise, I know that he has 4 web servers, 2 DB servers, and 1 image server...I'm not certain on specs, but I believe all of them are dual xeons.
But yeah it's pretty crazy, since it's a hobby, I'm sure he is getting things that he doesn't really need.
Another thought: it also depends on how much time he puts into it. If it's 5 hours a month in maintenance, it's probably worth the ~$72,000 he's made over 10 years?
I disagree with his assumption that these forums, let alone every forum of similar size, earn enough to "make a living" from. Forums are notoriously hard to monetize, and traffic at those levels is likely to bring in at most a few hundred a month in advertising and affiliate revenue. That's not enough for a young single guy to live off, let alone a family.
It's true that forums are hard to monetize with Adsense and other affiliate ads, but they're definitely not impossible to monetize.
I started/ran silverfishlongboarding.com for a few years and the forums became very popular. Even so, it never made more than a couple hundred a month off Adsense.
Eventually we got rid of Adsense and started selling ads directly. Within a few months we were bringing in several thousand a month. It was much more time consuming, but it worked. I sold the site a couple years ago, but I keep in touch with the new owners and I know that at least one of them is making a living full time off it.
Wow, I used to surf the 'fish a good bit last year. Got hooked up with the Friday Night Rip at Prospect Park with the Earthwing and Bustin crews, bought a Kracked Skulls M1; my roommate bought an Original Apex. It's still a great site with a valuable community. Nice work!
Actually, I clearly stated that I don't know how much these forums are making, but I don't think that's the point. Yes, forums are hard to monetize, but in my opinion, these forums have clearly demonstrated that there's an audience for the niches in question. There are almost certainly better ways to monetize that audience (blog with sponsorship, ecommerce, membership site, etc).
There's a world of difference between "there's an audience, and somebody might be able to find an effective way to extract cash from that audience" and "If You’re Passionate About Something, You Can Make a Living From It Online".
Remember when the dot-com bubble burst? The fallout was littered with sites that had audiences, but no effective means of monetizing.
The bubble companies had no intention to monetise their audience. The very phrase 'burn rate' is indicative of why it was a bubble. Their plan was simply to grow audience, even at a big loss, buoyed up by huge valuations and ridiculous IPOs.
Most of the dot-com failures were just straight out bad businesses, making a loss on each unit but making up for it in volume. Pets.com is the obvious example, selling cases of dog food at a loss because the shipping cost more than the dog food. The common theme of the dot-com failures was the desire to grow as big as possible as fast as possible, regardless of everything else.
A niche audience is completely different to a mass audience. They are inherently valuable by merit of being a niche. A list of pet owners isn't worth very much, but a list of people who own German Shepherds with arthritis is. The reason should be obvious to anyone who has ever sold anything. Just the list of names is worth proper money, let alone the community and the goodwill and trust that it carries.
In the ever ending question to find Product/Market Fit having a successful forum can easily help someone identify the market portion of the equation. What MVP could you build for a group of jacket loving film peeps?
Hook up with a leather shop and sell custom-fit versions of famous leather jackets. Sell patterns.
You probably aren't going to find a homerun scalable business model, but there are dozens of sustainable small businesses that could be built on such a base.
Hell, it's jackets that were in movies right? Don't netflix, amazon and apple allow for affiliate links to the movie? Depending on the traffic that could add up.
How competent the owners of these sites might be in monetization is irrelevant, as my point is that the audiences in question are sufficiently engaged and passionate to be willing to pay for stuff, and thus it's possible to make a good living from them.
That is true. But a forum can be a means to operate a business.
The filmjackets.com guy operates the forum because he likes film jackets. The owner and the members research who makes the jacket and where to get it. Sometimes the jacket is custom/semi-custom.
In that case one very active member of the forum operates his own business where he will contact a jacket manufacturer and organize group buys. The active forum member is able to buy the jackets at a discount and then re-sell to the forum members.
I bought my motorcycle jacket based on the forum. From the forum I knew who the manufacturer of the jacket I liked was. Me finding that out on my own would have been very difficult, if not impossible. Without that site I would not have the motorcycle jacket that I ABSOLUTELY wanted.
You know, I'm watching a show about a wedding cake contest in Oklahoma right now. If Food network can make money on that, there's got to be a way to do it online.
I think we're just getting started in our ways of monetizing audiences online. Just look at the reality TV shows that make money on the most obscure topics these days.
I think that the advertisers pay more for Food network airtime because Food network has repeat patrons. It's a little different for a one-off show than for an entire network.
The interesting part is that broadcast television has managed to shoot themselves in the foot by lowering the bar of production value (via reality shows) to the level commonly found among online video producers (as opposed to well written, slickly produced and expensive dramas).
By setting their audience's expectations as such, the broadcasters have made online content more appealing and therefore have decreased their ability to compete with online offerings.
My 2(-4) Cents (per click):* Most of these posts mention Adsense when they explain why they don't make a whole lot of money. Adsense is not very effective in many niches (for example, "funny stories" would only get you roughly 2-4 cents per click). Sure, you can't all start a forum about Mesothelioma Lawyers, but you can seek more intuitive, less hated methods of generating profit than Adsense.
*I'm so sorry for that intro, I just had to do it :)
I know this is a pointless tangent we're off on, but "hope" is a particular pet peeve of mine. Hope is not a motivator. In a lot of cases, when we hope something changes, we don't spend very much time trying to change it. For example, I could hope that "Mr. X" becomes mayor or I could go out and canvas the neighborhood, put out flyers, etc. Of course, with most action, you will also hope for a positive outcome, but hope alone is not a motivator, and hope ALONE, encourages inaction.
Despair is honestly more of a motivator than hope is. How many times have people been in a terrible situation and forced to work extra hard to create a better outcome. Yes, despair is not a positive feeling, but hope isn't all it's cracked up to be either. I'm not a pessimist, and there are times when hope is appropriate, e.g. when things are out of your control.
thanks for the explanation. Looks like we might have different meanings behind 'hope' here. I tend to think of it less in the way you describe here, and more like a vision of something I think is possible; hope is something that helps galvanise action.
eg, I hope to see my kids grow up with a reasonable level of immunity to brand-names, therefore, when we buy things we talk about things like what it's made of, how well will it suit our needs, how long do we expect it to last etc, and almost never mention what brand it is.
I run http://www.obsidianportal.com, and we're just turning 3 years old. I won't give stats on users, uniques, etc, since we keep that close to the vest. However, we do have over 10k RPG campaigns registered, and about 250k pages of content.
Most important, we're actually decently profitable, after 3 hard years. Still not ramen profitable, but it will provide a nice chunk of change this year. If our growth continues, I may be able to support myself full time in another 2-3 years, but I'm trying not to be too optimistic.
Before someone says, "You can make money off your passion" or "Do what you love and money will follow", I'd like to see their own personal evidence. I'm walking that road and I know how hard it is. Possible? Yes. But definitely not easy, and it takes waaay more than just passion. It takes late nights, hard work, thick skin, and a good bit of luck. Oh, and forget about "fail fast." If you do what you love, be prepared for a long, hard slog up the mountain to profitability. I love my community and my chosen subject matter, but it's still work and it's still hard.
To the OP: Can you point to a community/passion that you've personally monetized into a living? Maybe it's too much to ask that someone be a personal expert on everything, but being in that boat myself, I get a little irritated when someone breaks out the "Do what you love" line without backing it up with personal experience. That's not to say that the OP hasn't done it, just that I didn't see any evidence in my cursory glance over the blog.
One last bit of advice: All our success is due to charging subscriptions. Forget ads. They suck. Besides being crazy variable, they also annoy your users. Find a way to charge money for something. No, you'll never get as big as Facebook or Twitter that way, but that doesn't matter. You'll never get as big as Facebook or Twitter anyway, so don't even try to walk that road.