Sustainability of Non-Profit User-Generated Content Platforms : The Role of Content Creation and Donations

Content on non-profit user-generated content (UGC) platforms, such as Wikipedia, is generally created and maintained as open-collaboration projects by UGC communities who are also users of these platforms. Furthermore, the financial sustainability of these platforms depends on funding from external parties and donations of users, which is similar to pay-what-you-want (PWYW) contexts. Although the sustainability of this business model is being questioned, it has not been investigated in the literature. We fill this critical gap by studying PWYW and UGC concurrently. We formulate a game-theoretical model that considers users’ donations and content contributions, as well as the platform's fundraising effort, community support, and in-house quality improvement. First, we find that the platform should make the ``already generous users more generous" so that they make more donations or contribute more content, rather than ``making the stingy just generous" so that they start making content contributions or donations. Second, with higher efficiency in exerting in-house effort, a UGC platform may suffer from a lower level of aggregate content contribution from users and/or loss of content contributors. However, a loss in the number of content contributors does not necessarily mean a reduction in overall content generation on the platform. Third, although donations and content contributions depend on the number of users on the platform, the platform may not always benefit from an increased number of users. We provide several other results and managerial insights that could be useful for policymakers and UGC platforms to formulate user-management strategies, efforts, and budget allocations