Forum:Mid-2023 business update

Forums: Index > Mid-2023 business update

Hi people! It's been about 6 months since we started the discussion about running ads on the wikis. I figure it is a good time to give an update on how that is going, and more generally our overall financial/employment situation.

The timeline

To give an idea of the basic timeline:

• We started the funding thread on January 20th
• We started a Patreon page on January 30th
• We started using NitroPay as an ad partner on February 11th and stopped doing so on April 3rd
• Weird Gloop USA, Inc. (wholly owned by Weird Gloop Ltd., the UK entity that has existed since 2017) was incorporated in Delaware on March 29th
• We started using Playwire as an ad partner on April 12th and are still doing so
• We started employing Jayden full time on April 6th, and started employing Kitty full time on April 30th
• Weird Gloop USA opened a US bank account on April 14th

How much money is coming in?

Since we started using Playwire (with an unchanged ad configuration), we have been averaging almost exactly $1000 a day in ad revenue ($31k in the month of May, $35k in the month of June, $31k in the month of July, on pace for $38-40k in August).

This number has been quite stable, although changes in the popularity of RuneScape (or drops in ad revenue generally, perhaps due to changes in the global financial situation) could alter it substantially. There is also a general expectation that the November and December months (due to their proximity to Christmas) will probably give 50-100% more revenue, although I am waiting to see that in practice before accounting for it in our forecasts. The recent announcement that the 4th OSRS League will (probably) happen around November/December is also indirectly a very good thing for forecasts for those months.

Patreon revenue (after processing fees, etc) is about $1900 a month currently. Also quite stable - not too many new signups but not that many cancellations either.

There is also a small cash excess after applying Jagex's fee they pay to us against the infrastructure costs. At their request, I'm not able to share the specific amount they're paying us, but the difference between their fee and the infrastructure costs is small enough that it doesn't factor much into the overall forecast when compared to the $30k/month from the ad revenue.

How much money is going out?

Our primary expenditure is employing the two sysadmins. Total cost of employment (including taxes, pensions, national insurance, etc) is about $6k per person per month.

We are also spending around $2000 a month on infrastructure. Most of this is going towards core web hosting on Google Cloud, with smaller amounts ($200/month or so) going towards CDN (Cloudflare) and secondary webservers (DigitalOcean). An approximate breakdown of the GCP costs (before and after the big migration we did on June 2nd) can be found here.

Additional smaller required costs: we estimate about $2k a year in ongoing legal expenses, and approximately $4k a year in accounting and payroll services.

It is likely that some surplus will be spent on more editor-facing projects, including annual merch, "techfest"-type meetups, etc. It's hard to forecast the cost of these since they are very context-dependent, but it's probably around $20-$30k annual in total.

What have the sysadmins been doing?

Major accomplishments from the first 3-4 months of employment include:

• Moving Weird Gloop's webserver layer to GKE standard, which reduced costs, improved stability and also roughly doubled the speed at which the wiki loads
• Setting up public-facing monitoring and dashboards, which indirectly resulted in other performance improvements to the main cluster
• More work on standardizing the dev wikis, which has made a number of on-wiki tasks (sandboxing massive template changes, CSS refactors) much easier
• Various improvements to image handling, including fixing the dreaded undeletion-hash-bug, and separating image/animation thumbnailing from our normal webserver operations

Here's a few things that are in progress, but not quite finished enough to declare victory:

• DPS calculator for OSRS (Jayden will yell at me if I don't mention the fact that I am the one holding it up - we want to get it launched in time for Leagues IV though)
• On-wiki article feedback tools, with a really cool Discord integration
• Public-facing traffic analytics + dashboards, since Google Analytics sucks now

What's the cash flow situation?

The nature of ad agencies is that they often pay out to publishers in "NET D" terms, where the revenue recognized for a specific month isn't paid out for some number of days afterwards. In our case, we have "NET 60" terms with Playwire, which means that ad revenue from (say) the month of July won't be paid out until about 60 days after the end of the invoice period.

So as I write this, we are currently awaiting $35k for June (to be paid out around the beginning of September) $31k for July (to be paid out around the beginning of October), and $27k-$40k for August (to be paid out around the beginning of November). That's $93k-106k that is owed to us (and should be part of our financial calculations) but hasn't yet converted to cash.

This kinda sucks for cash flow, since it means we're always 2-3 months behind, and our bills still come due at normal times. But Jagex did something pretty neat, which is that they pre-paid our invoice for the entire year, which (besides just generally being less paperwork for them and us) also gave us a lot more cash-flow flexibility for the year as we slowly build up a war chest from the ad revenue.

Between the Wells Fargo USD account and the HSBC GBP account, we currently have around $49k cash in the bank (and GBP/USD are readily convertible between each other at the market rate with very limited fees). I expect we will continue to build up a bigger cash reserve in the following months.

How are the ads?

Okay I guess? Right now we are running a very stripped-down ad situation:

• No ads for logged-in users
• No ads on mobile
• No ads in the EU/UK
• Only one ad on the page - for short articles this is a footer, and for longer articles it is a vertical banner below the sidebar that doesn't scroll with you
• Running a limited bid stack (fewer browser requests out to the different supply partners)

The rate of complaints is fairly low (I think we've gotten 3 since April, in #report-bad-ads), but any amount of bad ads at all is very frustrating. Since we switched to Playwire, two of the three complaints have been related to the website Temu (sort of a Wish.com knock-off, ironically), which we've since banned entirely, and one ad for casino gambling that evaded a topic filter. Notably, none of the Playwire ads have had any malware issues, which was one of our main concerns.

Revenue is significantly higher than expenses. What's the plan?

It's pretty easy to add up the revenue and expense numbers and figure out that we're running at approximately a $20k/month surplus currently. While this is certainly a better problem to have than running a deficit, it does raise a question: do we plan to continue operating on such a large profit margin?

In my personal view, probably not. While there's nothing inherently wrong with running a profit here (and there's no parent company or even individuals that would be getting dividends or profit shares), in the long run I think it is hard to justify, to our community, running ads that provide significantly more revenue than our reasonable expenses.

Of course, we can't predict whether the financial situation will remain this advantageous for us in the longer term, so it would be a mistake to immediately draw the revenue down to match the costs, when the ad revenue is quite variable.

So there are a few possible (not mutually exclusive) directions to go with this:

• In the near term, we'll focus on saving up a rainy-day fund that can cover 6-12 months of expenses in the case of some catastrophic failure. Because interest rates are so high currently, we'll probably put this in a money-market fund or something similarly safe that is backed by Treasury bills.
• I have also expressed interest in hiring 1-2 more people to start handling some of the administrative, management and technical things that I have been doing for free over the last 5 years, so I can stop being quite so obligated to be involved in day-to-day operations. This would be BigDiesel and maybe also Gaz.
• I am still interested in funding wiki-related projects, meetups, merch runs, etc, if there is a case to be made that they make the wiki more useful to readers. We did a (funded) meetup this month to cover the big Necromancy update for RuneScape 3, which went reasonably well and could be a model for future meetups for other big updates and projects. It's hard to imagine this getting above ~$50k-$100k a year even in the most extreme case though.
• The last (and perhaps most obvious) option is to try to draw down the ads even further. It's hard to see too many other consistent things we could do to make the ads even less disruptive than they are now, short of something like only showing an ad on X% of pageviews or something (which I think is jarring and bad for users for reasons I've talked about elsewhere). One other option would be trying to eliminate the sidebar ad entirely and always just doing a footer, but in our limited experience, this reduces revenue by about a factor of 3, which would be too much.

Like I said, this is a pretty good problem to have! But I'd rather not be running a 60% profit margin a year from now. ʞooɔ 14:42, 21 August 2023 (UTC)

Discussion/Questions

Feel free to ask any questions here. ʞooɔ 14:42, 21 August 2023 (UTC)

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Questions - If there is sufficient funds at the end of a year, would we consider a bonus scheme for employees? My napkin maths suggests the salary for UK sysadmins is probably a little below market rate, but likely even more so for US sysadmins. Would we consider paying employees differently based on geography and cost of living? cqm ^talk 16:40, 21 August 2023 (UTC)

It's kinda related to a question how well the wiki wants to retain employees, and if/how the wiki can manage to operate if those sysadmins (employees) leave for better salary opportunities. Aside from that, may I suggest also budgeting to retain employees with appropriate annual salary increases adjusted to inflation? 84.250.15.152 20:14, 21 August 2023 (UTC)

Amended, I have a feeling matching salary to market rate and annual adjustment for inflation is cheaper than the "six figure [...] cost to hire new people" (quoting User:Cook_Me_Plox from rsw:Forum:Funding the wikis). 84.250.15.152 20:41, 21 August 2023 (UTC)

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Keep making money imo - I think it's admirable the extent to which Weird Gloop is uninterested in making money. It is in the spirit of wikis and libraries and the free flow of knowledge unbeholden to investors. In the case of the RuneScape Wikis and Weird Gloop, however, I feel that there has been no demand from users to reduce ads, and that since implementing them (in a very limited and unobtrusive capacity), there has been no degradation of our mission to document the game & guide players as they enjoy RuneScape. Aside from the ideology that "The wiki just shouldn't have ads or make money" I see no practical reason why an excess profit over the absolute minimum needed to continue operating is a problem.

One acceptable use for the excess money:

• Take some bonuses, you've earned them in years prior. Not just for good work on the wiki, but also to cover any costs that may have been paid out of pocket.
• Actually consider it. You have earned it and there is no reason to shy away from taking bonuses. There is no angry mob that you are making money and other editors (who are not hosting the wiki) are not making money. Most people prior to the introduction of ads assumed Weird Gloop Ltd employees were making a healthy salary anyway.

Some uses that could benefit everyone:

• I agree that socking away money for a rainy-day is a good idea.
• I agree that hiring BigDiesel / Gaz is a good idea.
• Yeah, I'd like some merch that would be cool. Lacking official merch, I printed my own RSC Wiki stickers for personal use (hope you don't mind). I know that there was interest in Forum:Getting_the_ball_rolling_on_merch, and in fact a great point brought up by Omnes Ferant that releasing merch is one of the only benefits promised to Patreons. A concern raised in that thread is that there was a possibility to lose money on producing unsold merchandise, or that excessive costs of production would have to be offset to the end consumer. Well, if you're looking for "projects that benefit the community" and you've listed "too much money" as an actual problem, I'd definitely recommend prioritizing merchandise given away for free to Patreons, administrators, frequent editors, and to be sold (possibly at a loss) to anyone else interested. I can volunteer myself as someone who has some amount of prior experience producing merch, but I'm not much of a graphic designer, so I'd like to designate Iiiii_I_I_I to help finalize some designs if he's willing.
• Is there a possibility that we could leverage excess funds to get more information that we want from Jagex? For example, instead of begging Mod Ash on Twitter for the success rate of crafting a waka canoe with a rune axe, or otherwise using favours/goodwill selectively, would Jagex be willing to establish a "wiki question answerer engineer" position for some amount of cash? There must be a number. If it can be done, I think many people would be happy to see even more advertisements, not less.
• Could we use excess funds to help Weird Gloop as it branches out to supporting more wikis, like Minecraft wiki & others?

In summary, I think it would be prudent to continue making money. There are many ways it could be used to improve the wiki for everyone. I would personally like to see Weird Gloop go in the direction of making more money. If comparing the amount of ads that the wiki serves with what most other websites have evaluated that users are comfortable putting up with, there is certainly room for expansion. Perhaps one technical task that could be taken on towards the goal of making more money would be completing the work necessary to launch ads in the EU. —Logg^(talk) 10:21, 22 August 2023 (UTC)

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Comment on a bunch of things in no particular order -

• Focusing on a rainy day fund/emergency coverage of operating expenses is a solid call, I don't see that being something anyone would really take issue with.
• Support hiring BigDiesel and Gaz, and as IP84 and Logg mentioned, I'd support earmarking funds for market adjustments/annual increases for Jayden/Kitty/any future hires as well, as I feel retention is a pretty big deal, to put it lightly.
• Similarly I'd like to propose some sort of stipend for you (Cook) for all the work you do and frankly all the nonsense you have to deal with at all hours of the day and night.
• Re: Merch - I'm sure a lot of people are unaware but there are currently some efforts in the works to piece together a merch bundle to give away to frequent contributors, Patreon supporters, etc. We're still working on details but I believe (and please someone correct me if I'm wrong) the current timeline is looking like the end of 2023 or the beginning of 2024.
• Support funding some sort of meetups and/or tech projects. I know on the OSW side we have Varlamore coming up in early 2024, and Sailing looks like it'll be landing either towards the end of 2024 or in 2025 so those are both pretty major updates that I think could justify some sort of wikifest. I'm also currently drafting a proposal for a tech project that I think could be pretty nice to have if we can pull it off.
• Oppose drawing down on ads. I trust your judgement on this one and agree with the points you've raised on the matter.
• Re: using wiki funds to pay for a Jagex employee to work as a dedicated wiki liason, I'm not sure that's really a relationship I'm hugely a fan of us having with Jagex.
• On the topic of MCW and potentially others moving over to having Weird Gloop as a host, I certainly think the situation warrants further discussion, although it's probably best to let the situation with MCW's transition away from Fandom stabilize before having one. Duralith (talk) 21:42, 4 September 2023 (UTC)

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Comments/reply on merchandise comments above:

• I'm not generally opposed if Weird Gloop wants to sell wiki merchandise, as long as it doesn't infringe on the rights of others (Jagex), benefits everyone and doesn't turn into a money sink. "If the community wants it."
• But I think rewarding or to "give away" merchandise for "frequent editors" is disproportionately low for their contributions (and hard work), and turns it further different from the current two-tier society, where there are paid Weird Gloop sysadmins and unpaid editors; to a three-tier society, where there are paid Weird Gloop employees, poorly rewarded editors with merchandise, and unpaid collaborators – and suddenly not all editors would no longer be considered equal.
  • How grateful would you be to be given (as an example) a $30 gift card for six years of work on top of what you already make (if anything). To put a $30 gift card into a perspective, it's a $5/year salary raise or ~42 cents per month for the past six years. A little over one cent salary increase per hour, a reward for their contributions. It could still be maddening for the editors, to tell how valued the most dedicated editors really are? (It doesn't have to be a gift card. It could be a Weird Gloop / wiki wearable, but the value of a sale is similar.)
  • Now that all editors would no longer be equal in pay, would the community editors start infighting over who's entitled to a title of dedication and their right a merchandise reward and who doesn't?
  • All while Weird Gloop is serving ads to all almost all and making record profits (lol)–currently in 4-5 figures–, benefiting from the value created almost solely from poorly paid or unpaid contributors. Without the interest of (unpaid) editors to contribute, the wikis and paid employees may not succeed as well as they do right now and pay the salaries of the sysadmins. If there are no editors, the interest of users could decrease and there will be little or no updates to the wiki, which likely means less page views and less (ad) revenue to fund the sysadmins.
  • My general opinion is that if editors want to be paid for their contributions to document the games, they would need to be employed by e.g. Jagex (but not Weird Gloop!) to do so, i.e. "dedicated wiki liason". The value comes from Weird Gloop's technical expertise hosting the wiki platforms, and from the value of contributors documenting the game. These live in a symbiosis and don't meddle with each other. Point being, it should make sense that Weird Gloop should not try make editors infight and quit creating the value over this.
• Aside from that, to me merchandise rewards for contributors sounds like a bad idea because editors are contributing under the CC BY-SA-NC 3.0 Unported license (non-commercial) based on rights from Jagex. Would frequent editors get a disproportional right to profit from the collaborative work of others or the work of their own, but force editors downstream not to profit from it, and some of that editor revenue possibly not going back directly to Jagex that allowed the revenue to exist in the first place?
• Contrast my arguments above to e.g. spending on suggested meetups, events where anyone interested can join socially or talk about developing the wikis technically for the benefit/reward of all interested editors equally, if these meetups are sure to have a positive impact (and not just eating together from Weird Gloop's funds).

84.250.15.152 12:39, 7 September 2023 (UTC); edited 13:05, 7 September 2023 (UTC)

This comment is wildly incoherent and contradictory. There's literally never been any infighting or bad feelings about giving away free stuff to wiki editors, despite you trying very hard to make it seem self-evident. 92.40.177.118 12:52, 7 September 2023 (UTC)

I feel that as long as there is a fair & defined metric chosen for "frequent wiki editors" (e.g., the metric that already exists for whether or not a user is allowed to vote in the Weird Gloop Board Elections (which could be adjusted to match the number of free merchandise desired to be given out, or used as-is)), no one should be offended to receive a free T-shirt. No wiki editor has ever edited the wiki at any time with the expectation of compensation. It is done because there is something wrong or missing, and that personally bothers them.

Free merchandise is much closer to "thankyou" than "compensation", due to its low monetary value, and the fact that it is unexpected that the receiver would opt to sell their shirt / stickers at all. On the second-hand market, a branded t-shirt for something that barely anyone has heard of reduces the value of the shirt, and I can attest to buying a pretty decent quality shirt at Walmart for $1 in 2022, so I wouldn't expect the recoverable value of the merch to be very much, if anything. —Logg^(talk) 16:12, 7 September 2023 (UTC)