I didn't manage to get a post up yesterday; I had one but the dog ate it. Hopefully, late is better than never.
Since I'm interested in web comics, I decided to take a look at the medium's biggest success story, Penny Arcade(http://www.penny-arcade.com/comic/). Penny Arcade is a combination online strip, which updates Mondays, Wednesdays and Fridays, and blog. It's created by Mike Krahulik and Jerry Holkins. Both the strip and blog are exclusively concerned with games, online and video, which it reviews and comments on. I couldn't find exact income figures, but I've heard from numerous sources that the Penny Arcade operation generates an income in the hundreds of thousands, if not millions, of dollars. It's become a major force in the gaming industry itself and sponsors a convention called Penny Arcade Expo, a week-long event held annually in Washington State. Apparently, it's doubled in size every year since it began in 2004(1).
Penny Arcade began in 1998, making it a true webcomic pioneer. In the beginning, it made it's money almost exclusively from advertising. Now, according to its creators, it has more than two million page views a day. It still makes a great deal of income from ads(for which it can obviously charge a premium), but the site also has a store which sells numerous book collections, tshirts and other products. There are also several Penny Arcade video games, posters, action figures, all sorts of stuff, as well as the Expo. It's clear that, at this point, Penny Arcade has morphed into a business empire in which the webcomic on which it was based plays only a part.
The success of Penny Arcade is due in large part to a fortunate convergence of wide interest in the area they address(digital games) and the disproportionate willingness of the people who share that interest to use the Internet(especially early on). There are other web comics whose creators have been able to earn livable incomes, but none, as far as I know, have come even close to matching the success of Penny Arcade. Nonetheless, I think Penny Arcade's model is one that can work in a number of similar enterprises and its success says a lot about the potential of web businesses to well by addressing relatively small and well-defined niches.
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