Tipping and Membership for Creators in SE Asia Don’t Work — But We Found Out What Does
I’ve been working on the concept for KaryaKarsa for long before we launched — back when it was for “musicians getting money from fans” or the simpler “Patreon but using GoPay”. And in our initial research up to the MVP, that what was we set out to do — create a platform where creators can monetise their audiences with locally-relevant payment methods.
We started out with a “tier” model, where a “subscriber” of that tier would get anything set by the creator, basically giving access to premium content or perks. The different twist was this tier was a 30-day prepaid access tier, as opposed to an open-ended subscription charged to a credit card.
Why did we try this? Because credit card penetration is notoriously low in Indonesia (16.51 million cards for a 270 million population, without considering the fact that many people hold more than one card), and people are very budget conscious, and will not purchase a subscription to anything without a longer consideration period (or try to get it by other means). But having a monthly tier, even prepaid, meant that the creator had to plan for providing the various content and perks. This turned out to be a challenge for most.
In early 2020, we started experimenting with another type of content offering — by post. So instead of forcing the creator to think about publishing posts for the tiers, the creator could sell the post itself, at a price set by the creator, and giving the buyer lifetime access to the single post. As we grew, interest in buying single posts grew, eventually up to 60% by Q4 2020, smack in the middle of the pandemic, along with our continuing growth.
We introduced tipping on the creator pages as well in Q3 2020, where you could just tip the creator directly, or add a tip to a post or tier purchase. The thinking was, emulating various tipping platforms overseas, that fans of a certain creator would be willing to give money to a creator despite there not being actual posts/tiers sold (i.e. livestreamers, or internet personalities). It worked overseas on sites ranging from Twitch to Ko-Fi, why not here?
The answer is that it didn’t. While we still leave the functionality live on KaryaKarsa, we learned early on that tipping is not sustainable in the long run. Giving money out of the goodness of your heart to your favourite creator is not scalable or sustainable from a creator’s perspective — goodwill can only last so far before people decide that, at the least, there are others also deserving of the goodwill. Tipping does not deliver repeatable unit economics.
And as you can see on the graph, the tier model only to an extent, as it was overtaken by posts not long after. Why? Purchasing entertainment on KaryaKarsa is more akin to going to the minimarket to get something sweet on impulse, rather than a conscious, planned decision to support an artist. The dopamine hits harder when you find out there’s something new from your favourite creator, and immediately purchase and consume it.
The next revelation came from the data — we found out that many writers were coming on board and making good money, so we doubled down on these writers finding out what they sold and who they are. The general profile of these writers is that they have an existing audience — however big or small — and have a serialised story in the works. This made a lot of sense. So we did more experiments in making sure more writers came on board and made money, using serialised stories to deliver repeatable unit economics. Because if you are already invested in a story and its characters, at some point you’d be willing to pay to read the next chapter, right? Today the sale of posts — usually chapters/parts of stories — take up the majority of sales, with customers returning up to 6 times a month.
We’re not saying that KaryaKarsa only works for writers. We’re saying that tipping and membership are not sustainable, and that the serialised model can work for any type of storyteller — written, visual, audio, video — as long as it is offered to the right audience at a price that fits within the impulse buy window. But as a creator platform, we continue to be pragmatic in finding other ways creators can make a living from their work — so this conclusion is certainly a work in progress!
Working with creators during these past years (KaryaKarsa turned 3 last month!) gave us tremendous lessons on the space and the challenges that creators face today. And we’ve been able to build something that delivers value to one of the most underserved class of workers anywhere — writers and storytellers. And interestingly, it’s a different approach compared to, say, empowering solo culinary entrepreneurs to scale, which is why we launched an IP Management initiative. But that’s a story for another time.