The business model for Lunatics! is based on models that have worked for past free-culture projects, focusing on any model that doesn’t require exclusive copyright to work well. These fall into the following categories:
- Crowdfunding (Kickstarters, Patreon), before production.
- Pre-Sales, before and after production, but before release.
- Creator Endorsed Sales, after release.
- Subscriptions and Donations at any time in the production cycle.
- Ancillary Sales (products associated with the series)
- Advertising (on the site or in episodes)
Each of these can be broken down further, and the revenue split for different sources will be different, recognizing the differences in how they work. For example, advertisements on the website will be primarily used to pay for web-hosting expenses, while sales of an episode will primarily pay the artists who contributed to that episode. Ancillaries will be distributed among people contributing to the series (any episode), and so on.
Furthermore, we’ve committed to being as transparent as possible about our finances. Since supporting artists in a fair way is the primary selling point of our products, we have to demonstrate that this is in fact what happens to the money.
Our primary means of ensuring this transparency is simply to make the same accounting information available to both fans (customers) and contributing artists. If we are ever challenged on this subject, our legal defense is simply to prove that we did disperse money according to the plan laid out in our accounting documents, which are available to those who pay. The hope is that this breakdown seems fair, and fans will support it by paying for products that distribute income the way we’ve outlined. We might at some point introduce some flexibility under the fans’ control, but we also have to make some executive decisions to keep the complexity under control.
Even so, it’s fairly complicated, and initially, all of these tables are generated by the producer, Terry Hancock. This is an area we’d love to get some help, so as to do it correctly in terms of accounting practices and also to keep it as simple as it can be.
We can’t quite do everything on Lunatics! for free or for trade, so there are some fixed monetary expenses we have to pay out. This ranges from trivial items like office supplies, to regular monthly rents, like our web hosting fees, and even some capital expenses, like building a rendering cluster to speed up animation. All told, these overhead costs typically cost us about $1500-$2000 per year.
Other expenses include advertising or other promotional costs, and fees for any production services that we have to pay for out-of-pocket. Occasionally, we may pay advances to artists as up-front payment for commissioned or licensed work.
It’s not always possible to assign these expenses to a specific episode or product, so some simple, estimated percentage will need to be included to pay for these overheads.
Here we’ll list the different breakdowns under which profit breakdowns will be made.
Payments received through our on-going Patreon crowd-funding campaign.
Monthly subscriptions are available through a PayPal link on our front page.
Payments received for sales of “Lunatics!” Volume 1, on DVD, Lib-Ray, or HD downloads.