What even is a Coop? Well, basically that’s it (the image explains it all)… article over.
Oh! Also, it’s a place to keep chickens, but I’m sure we don’t think anyone here is a chicken, right?!.
Catch you later and all the best,
Well, Co-Op Mode in games too. Which is more what we mean, but not how we say it.
There’s also Coup, which in a way we are committing by trying to enter the market, but that’s neither what we mean or how we say it. That said, we do like the alt-tech revolution going on at the moment.
Jokes aside, let’s explain this a bit. There are obviously different ways of running a business and a Coop (Co-Op or Cooperative) is one of them. Even then, we aren’t actually a cooperative, we just run a cooperative profit share for our Creators to benefit from.
Plus, just so you know, there’s a company called the Co-operative here in the UK, so we’ve muddled Coop and Co-Op in our branding to avoid getting our asses sued. Say it like a chicken hutch, mean it like you’re helping each other, and never use correct punctuation.
A little background, the idea of workers owning the means of production is all good and well, but really the best way of doing this is to simply own your own business. Obviously, when you’re outsourcing some of your work to another company, you don’t own them or their facilities. The general solution to this is taking the business public, allowing people to buy shares, and then anyone can own a piece if they can afford to.
Some companies even offer discounted share saving programs as part of their benefits package for employees. This is where you can sacrifice a proportion of your monthly wage, which comes out before it is taxed so both you and the business pay less contributions overall (I’m personally against this as I feel it’s just a form of tax avoidance).
Thus, you can, in practice, start to own the means of production to which you are currently employed, but usually have to give them up and accept whatever the payout would be when you leave the job. However, people who aren’t even part of the company can also own a part, do none of the work, have a say in how the company is run, and still receive some of the profits. Sod shares!
Obviously, that’s all just forms of investment, and so you’d want returns for your financial support, but it’s not what we’re about here at Coop Content. A cooperative doesn’t have shares, it simply pays a proportion of the company profits to its workers, which is usually a negotiated amount and they try to keep it equal for everyone. Though there are some that pay out based on the effort a worker puts in, equalling the percentage they’d get out of it. Yeah, meritocracy!
That’s the model we’re looking to go with. The only issue is that the Creators using Coop Content are not our employees, they’re all Sole Traders and SME-LLC’s (explained below), so we can’t pay them like we would if they worked for us. Nor are we looking to give out shares to Creators because that’s just not our thing.
Coop Content is a private Small to Medium Enterprise – Limited Liability Company (sorry for the business terms, but it’s important to us to be clear and honest). Our employees will get a wage and a cut of the profits as a yearly bonus, with a larger cut of the profits being saved for growth and special events for the whole Coop Community to benefit from.
The Cooperative Profit Share for Creators will work quite simply. Whatever proportion of the total revenue Coop processes that an individual Creator is responsible for, they will receive back as a percentage of the total profits as a yearly bonus.
We will have to build up the site to the point where it actually has profits, and not just covering it’s running costs. Nevertheless, for the sake of transparency, let’s use some estimates below:
Coop takes a flat fee of 3% for all of its services, regardless of which a Creator chooses to use: one off projects, recurring subscriptions, donations, digital products, or physical merchandise. This means that our income would be £15,000 for every £500,000 processed.
Our first milestone as a company would be to have 2 Operators on £2000 per month each and 1 Technician for £3000 p/m, as well as saving £1000 for Overheads and £1000 for guaranteed Growth. That means Coop Content’s entire example spending for the above month would be £9000, with £6000 saved for profits.
From all the profits collected by the end of the financial year we will have to pay 19% Corporation Tax (that’s the UK folks). Thereafter, we’d like to keep 41% for Coop to cover emergencies, put on special events for the community, and pay our employees a small bonus. Thus, there’d be 40% left over for qualifying Creators to receive from the Profit Share.
At the end of the year, after 12 months of saving £6000 p/m, there would be a total of £72,000 in profits, so 40% would equate to £28,800 for the Profit Share. Whatever a Creator’s proportion of the total revenue generated throughout the year works out as, would then be given back to them from the Profit Share.
Using Creators A and B from the image above: Creator A earned 10% of the total revenue Coop processed that year, which would be about £50,000 p/m (or £600,000 per year), and so receive 10% from the Profit Share – equalling £2880. Creator B earned 2% of the total revenue, making £10,000 p/m (or £120,000 p/yr), and so receives 2% from the Profit Share – equalling £576.
Obviously, if Coop Content were to be processing even just 10% of what Patreon does (something like $300million for 2018, which would be about $25million per month), we would look at increasing the percentage of profits saved for the Cooperative Profit Share.
Our next goal after processing £500,000 p/m is to triple that to £1.5million p/m, which is only 6% of what Patreon processed above. That would mean our income (from just 3% flat fees as before) would be £45,000 p/m, so we would be able to have 6 Operators and 3 Technicians, each running a server site in three different time zones, allowing us to give 24hr operational and technical support.
What’s the Catch?
There isn’t really a catch to the Cooperative Profit Share. Though, admittedly, there are certain criteria a Creator has to fulfil to qualify for it. This isn’t set in stone, we will look to amend it based on feedback and suggestions, but we have to start somewhere.
Duration and Regularity of Use:
1) A Creator must have been Registered with Coop Content for at least 6 months.
2) A Creator must be active with a frequency of at least 1 Login per week.
3) A Creator with Donations must have at least 10 regular donors active per month.
4) A Creator with Subscriptions must release at least 1 piece of Premium Content per month (plus requirement 3, but replace “donors/donations” with “subscribers/subscriptions”).
5) A Creator with (a) crowd funding Project(s) must have successfully funded at least 1 in the last 6 months.
6) A Creator with Products in our Online Store (digital downloads or merchandise) must sell at least 1 per month.
Under Investigation or Results of Report:
If a Creator is currently under investigation for a Stage 1 or 2 breach of our Code of Conduct they receive their Profit Share as normal, as this is likely to be something minor and/or irregular.
If a Creator is currently under investigation for a Stage 3 or 4 breach, their Profit Share will be held until the end of the inquiry. If the Creator is found innocent they will receive it as normal. If they are found guilty their Profit Share is forfeit and absorbed back into the amount saved for all Creators.
If a Creator is currently under investigation for a Stage 5 breach their Profit Share is forfeit and absorbed back into the amount saved for all Creators.
The reason Stages 3 to 5 are treated more harshly is because they would also be under a Level 1 to 3 Probation respectively. This means they have had repeated proven violations of our Code of Conduct, or are refusing to accept the Results of an investigation, even if the evidence does not support their position.
What about Exploits?
It shouldn’t be too easy to exploit, because if you only do the minimum and end up contributing only 0.00001% of our total revenue, you’d only get 0.00001% of the Profit Share.
Using this example – of £500,000 p/m making £72,000 p/yr in profits and the 40% of that for the Profit Share being £28,800 – you’d only get 0.00001% of £28,800 which would equal a whopping £0.03!!!
What’s the Point?
To hopefully engender greater brand loyalty, if we’re being brutally honest.
We wanted to do this from day one. It’s simply how we think our business should be run. Giving back to those that are using our services in a tangible way. We just decided to make it a Unique Selling Point of Coop Content, rather than a limited time promotion or a throw away gimmick.
As we said in our previous article, this is something we believe in. If it doesn’t work, we’ll look at it some more, listen to our Users, and try to fix it. If it fails and simply cannot be fixed, we’ll try to work out something else to replace it… that or we call it quits, sell out, and kick it on $580million like Myspace Tom did.
Again, jokes aside, we want you all to make Coop Content a Community you want to be part of. We want you to see the site flourish. If you want to put the hard work in, but you’re only making a little off all your income streams combined, it might still add up to a decent percentage in total, so we want to reward you with the Profit Share.
We feel that if you see your hard work bear fruit, and you get more out of it than you expected; or that the faceless company you entrust to host and promote your Content, gives back to you from its profits as an acknowledgement of your merits; you’re more likely to work harder for yourself. Which in turn means we can give back more to you, and hopefully you’ll like us a bit more too.
Okay… so really we’re bribing you with your own earnings, if you believe that all taxation is theft or whatever, but how else is a company meant to make friends if it doesn’t buy them?
Answers in the comments section below!