Kachingle and the Limits of Tip-Jar Journalism

By John Hendel

A two-year-old start-up has the best of intentions, but faces many obstacles and continues to struggle for acceptance

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As the New York Times prepares to throw up its new subscription-based paywall in coming weeks, the news giant is also shaking off recent criticism from one its biggest critics--a journalism start-up called Kachingle, a David to the Times' Goliath and a rabid evangelist for free online news. Hot controversy surrounds the question of paywalls. Should news organizations keep content behind gates or should news remain free to flow through blogs, tweets and far beyond the original source? Will either course save journalism?

As much as I want money to flow toward journalism, several problems cripple Kachingle and may create insurmountable obstacles.

Kachingle's position is clear: Tell it to the tip jar, newsreaders. Kachingle users can donate with a quick click to any news site or blog that features Kachingle's medallion widget. Forget Facebook recommendations and tweeting links, money is what matters: "social cents for digital stuff," as the California-based start-up advertises. It wants you, Internet-roaming news aficionados, to tip. Or, you know, to "kachingle," as they call it. Like a verb.

The two-year-old company even launched a "Stop The Paywall" campaign directed at the New York Times, and, as CJR reported, offered a browser extension to allow users to donate to the Times against their will--a move which caused the newspaper to sue Kachingle last year. "Restoring those old business models in the form of paywalls," wrote founder Cynthia Typaldos on Kachingle's blog, "is a regression, a destruction of this fabulous opportunity, a step into the dark ages of non-information where people and the world will suffer." The two parties settled in late January, and Kachingle continues its campaign to affiliate with new publications. Its clients have so far earned small sums accumulated from months of kachingling--very rarely more than $200 total and usually under $50.

The initial and obvious point: Why not try Kachingle's model? I agree. Kachingle absolutely is worth trying, and some newspapers such as my own college town's The Columbia Missourian have added a kachingling option to their websites. Good. I wrote for the Missourian years ago and would love any revenue to come its way (and in full disclosure: a friend of mine has, after I conceived this article, begun consulting for Kachingle part-time). The newspaper's managing editor writes that he has "small goals" for Kachingle: maybe adding the option will give his newspaper enough cash for an extra camera, for more public records requests. Hopefully enough people will donate to make those truly smart goals possible. Readers should always be able to donate money hassle-free. The idea is innocent, harmless.

Despite a heart with the best of intentions, Kachingle continues to struggle for acceptance two years after its release. As much as I want more money to flow toward journalism, several subtle problems cripple Kachingle and may create insurmountable obstacles to its success. The biggest challenges for Kachingle's tip-jar journalism:

The Premise. Where's the Incentive? The number-one problem, from my perspective, involves human behavior. Sure, the Kachingle monthly donation is small: $5, with 15% shaved off the top for Kachingle and Paypal. What will motivate people to sign up in the first place? While Kachingle does allow users to observe one another's donations, that alone will not supply much pressure to donate initially ... not unless truly everyone joins. No one likes to sign up for anything, least of all when it involves losing money. Especially in a bad economy.

Showing Off Philanthropy? Not Exactly Altruistic. One incentive, Kachingle says, is the fact that its users can flaunt their donations. Other people would be able to see, for example, that I donate to NPR and perhaps laud my choice. But isn't that public flaunting counterintuitive to genuine charity?

The Pressure to Tip Doesn't Exist Online. In a 2003 study on the development of social norms, one economist found that people "derive benefits from tipping, such as impressing others and improving their self-image as being generous and kind" (PDF). These benefits are all less tangible online. At a restaurant, we tip our servers out of gracious custom and because they might give us dirty looks if we don't. We don't want to feel cheap (the status argument) in front of servers or associates. We also tip because we see a connection between the money and service rendered--a connection much easier to make in person. And frankly, if a person is motivated enough to donate to their favorite news source, they probably don't need Kachingle to help them write the check.

Aesthetics Straight Out of the '90s. Kachingle still looks like a start-up. The site, with everything from clunky buttons to a barrage of obnoxious colors (greens and blues and purples, oh my), looks like something from, shudder of shudders, GeoCities--the opposite of slick. To create a new social norm, Kachingle needs better branding for better credibility.

The Attitude. Despite the admirable goal of putting money in journalists' hands, Kachingle has, from the web design to the business decisions, come off as surprisingly obnoxious at times. Even after the New York Times declined to work with the company in February of 2009, Kachingle continued to pursue the newspaper, attacking its paywall plan and "knowingly copied and uses each and every one of the Times' blog titles and icons," according to court papers.

And That Name... Kachingle is a mouthful. And sounds silly. (Then again, a company called Google came to dominate the Internet, so jury's out on whether this poses any real obstacle.)

For anyone who gives a damn about the news, it should be no news that the journalism industry has taken more than a few blows in recent years. Blame the Internet. Blame advertising dollars. Blame reader apathy, "the shallows." But as Atlantic correspondent Peter Osnos recently noted, journalism has responded with a healthy share of digital initiatives. This year is poised to offer various new potential models for funding journalism, from Kachingle to Rupert Murdoch's app-based publication the Daily (launched on February 2) and soon the New York Times' paywall. Broad experimentation with tools along the lines of Kachingle is important.

Yes, if kachingling becomes a new social norm, then journalism will be so much the better. The underlying tool of easy donation may find a good fit for certain blogs and community newspapers. And donating money can, after all, be profoundly satisfying. But ultimately, Kachingle falls prey to the "Wouldn't it be nice?" school of thought. On paper, it sounds terrific; the reality doesn't lend much confidence. Behavioral, branding and design hurdles likely stand in the way of mainstream success. And besides, the tip jar never saved anyone.

Image: Dave Dugdale/Flickr.

This article available online at:

http://www.theatlantic.com/technology/archive/2011/02/kachingle-and-the-limits-of-tip-jar-journalism/71703/