It’s natural that many people will wonder what Coil is and how its model differs from Patreon’s.
In an announcement made yesterday (26 June), Imgur revealed that it has received a $20m (€17.5m) investment from San Francisco-based start-up Coil.
Imgur, which is one of the largest image hosting services on the internet, also announced that it plans on using this money to help some of its 300m monthly users monetise content on the site. Imgur said that this is in line with the site’s company mission of making the internet a more positive place.
Alan Schaaf, founder and CEO of Imgur, emphasised this, saying: “Imgur began in 2009 as a gift to the internet. Over the last 10 years we’ve built one of the largest, most positive online communities, based on our core value to ‘give more than we take’. Everything from the way we operate as a team to the ways in which we partner with brands is built around this core value of giving to the community.”
Schaaf added: “Coil’s technology will open up new opportunities for users to give to one another and support the community in new ways.”
So, how does it work?
In 2018, Stefan Thomas, former CTO of Ripple, founded Coil to build what he believes is a better business model for the web, to benefit sites and users more than the existing models (which are traditional advertising and subscription services).
Coil’s platform is designed to make it easier for creators to monetise their content across the internet. As subscribing fans enjoy content, Coil uses an open application programming interface (API) called Web Monetization to stream micropayments to creators across a variety of industries including journalism and writing, video/streaming, podcasts, music, photography and art in real time.
Users pay a fixed monthly fee of $5 to Coil and download a browser extension. Then, they browse as normal and Coil does the rest of the work.
Sites that partner with Coil, such as Imgur, can code tags into their pages to tell Coil’s API which content creators to send money to. According to TechCrunch, Coil pays creators by the second, at a rate of “36 cents per hour”. Naturally, Imgur and Coil will also earn a cut. This means that if Coil is successful, it could change how advertisers work with both websites and content creators.
On Coil’s website, it states that some content creators using its services may decide to disable ads for viewers who also use Coil. “We expect this will be just one of the ways that creators reward their Coil subscribers, in addition to exclusive/early access to high-quality content.” Similarly, websites won’t have to worry as much about advertisements if they have a decent income from Coil.
Coil believes that its service is different to existing subscription models because anyone can benefit from it. Its website proclaims: “Whether you have 10 or 10m followers, you can monetise your content using Coil.”
Patreon v Coil
While this is all interesting, it’s natural that many people will wonder, ‘What’s the big deal? Isn’t this just like Patreon?’
When asked how its model was different to services such as Patreon or Flattr, Coil explained: “Patreon allows you to support a few creators with higher amounts of money. This can be great for your favourite creators, but doesn’t let you support everyone. Flattr distributes your subscription between the sites you browse and pays out at the end of the month. Coil, on the other hand, pays out a fixed bandwidth per second that goes to the creator instantly.”
At present, there are a few issues that stick out. It’s not a huge deal, as the service is still in beta, but at present Coil is only available as an extension for Chrome and Firefox, which is inconvenient for a reasonably large percentage of internet users.
TechCrunch also wrote a useful piece on how the investment from Coil could affect Imgur in particular and be “to the detriment of its non-paying users who’ve always known it to be free”.
However, a greater issue for Coil as a product is the fact that more people than ever do the majority of their internet browsing via mobile devices, and only a minority of these people bother installing extensions to mobile browsers. At present, mobile accounts for almost half of web traffic worldwide.
A lot of people who regularly spend time on desktop do so only in their place of work, which means they can’t spend all day watching their favourite Twitch streams or browsing Imgur, unless they want to see what their P45 looks like.
It doesn’t help that a large (albeit declining, due to Reddit’s native image hosting feature) portion of Imgur’s 300m monthly users are directed to the site from Reddit, a website where at least 49pc of users are on mobile devices.
While Coil seems to have good intentions, and it will be interesting to see if this model takes off, the company is missing out on a massive chunk of the market (which services such as Patreon will have no issue serving) until it finds a way to gear the service to mobile.