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It probably isn't a surprise that of the millions of blogs, the vast majority of active ones generate little to no revenue for their authors.

Yet is "professional" blogging, even at the highest levels, any more compelling a business opportunity than blogging at the lowest levels?

I've never really considered the overall economics of blogging in any depth for one simple reason - the income I earn from my blogging activities is not my primary source of income.

I started blogging because I love to write and even though I've (unexpectedly) been able to turn my blogging into a source of extra cash, I still blog because I love to write.

For those who rely on their blogging to pay the bills and for and those who have started blog-focused businesses, however, the economics of blogging matter a whole lot.

Earlier this week, I learned that Know More Media, a blog network, is allegedly going out of business and that Jeremy Wright, the CEO of b5media, which itself runs a large network containing several hundred blogs, had offered Know More Media bloggers an out.

His proposal:

"We will ask that you blog for $50 for the first month, while we ascertain the value and advertising potential of the blog. After that month, we will likely need to restructure the network (there’s a reason it wasn’t making any money), redo the pay structure and even let some bloggers go. But, if you let us, we will turn the network around and make it profitable. We are fully committed to doing what’s fair (and in many ways, being more than just fair)."

While he shortly thereafter offered an alternative proposal, I was struck that the CEO of a respected blog network would suggest to any blogger that he or she blog an entire month for the paltry sum of $50.

Frankly, I wouldn't open up my word processor for $50, let alone roll out of bed.

While I certainly recognize that some bloggers are dependent on their blogs to stay afloat and have to take what they can get, the notion that some might actually work for $50/month as part of b5media's proposal forced me to consider the economics of blogging a bit more than I was ever inclined to.

Interestingly, I didn't have to look much further than Jeremy Wright's own blog to get started.

On July 25, he had published a post entitled "The Problem with Small-Scale Blog Consolidation."

As the title hints, he looked at the concept of small-scale blog consolidation:

"Now, it sounds like these guys are basically saying 'if you can put together a half dozen blogs that are all doing mid-sized (150K pages/month) traffic, you have something worth buying'."

"But lets break this down real quick. 1MM pageviews per month gives you 2MM high value impressions (ie: above the fold). Right now, bloggers are lucky to be making 50c/unit. So that’s 1000$/month. 1K/month split amongst six blogs? That’s nothing."

"The reality is that small and medium blogs that have real value, great content, solid writers and an engaged community will always, always, always make more money from sponsorships than CPM-based ads."

"The long and short is that grabbing a half dozen or even a few dozen blogs together won’t net you CPMs of more than 4-5$. And even 5MM pageviews/month only really nets the whole network 5K/month."

He goes on to discuss the biggest challenge to receiving decent CPMs - selling advertising.

Frankly, the vast majority of people involved with "social media" (blogging included) know nothing about selling advertising. Not only do they lack the resources to mount a dedicated ad sales effort, they don't know what brand advertisers are looking for, they don't speak the lingo and they don't have valuable Madison Avenue relationships.

Wright observes this:

"To get higher CPMs, you need someone to sell that inventory. And that is where the bottleneck is. It’s not in inventory, or even quality inventory. It’s someone that can go to agencies, go to Microsoft, go to Disney, go to P&G, go to Vonage, go to Dell and say 'here’s somthing of value and here’s why you should pay more for it'."

"Because without a sales team, you’re stuck in the 1-2$ CPM world or you’re 'stuck' selling sponsorships (which I’m a huge fan of for high quality mid-sized blogs)."

He notes that b5media is going to be launching a product that he hopes "will help alleviate this issue."

After I read this, I couldn't help but wonder - if b5media, one of the few reportedly "successful" blog networks, initially felt comfortable only offering $50/month to Know More Media's bloggers, just how solid are the "economics of blogging"?

After all, while I can understand that b5media wants to establish how much revenue the Know More Media blogs it "acquires" can generate before making greater commitments, it's difficult to overlook the fact that b5media essentially wants "writers" to continue writing for an amount that probably won't even fill up any of their cars with a single tank of gas.

One would expect that if b5media was swimming in cash and thought that some of Know More Media's blogs had real value, it would have the ability to take some risk that didn't require Know More Media's bloggers to work for next to nothing for an entire month.

Assuming, for argument's sake, that the average Know More Media blogger puts in only one working day (8 hours) per month (which is probably an underestimation), $50 amounts to a $6.25 hourly wage - $1.75/hour less than the minimum wage worker in California makes.

That's right - an entry-level worker at a McDonald's in Los Angeles would earn a higher wage.

Which begs the question - if b5media apparently can't afford to pay Know More Media's "writers" a respectable wage while it determines the value of their blogs, just how compelling are the economics of blogging - both for the bloggers and the operators of blog networks?

My answer - the economics of blogging don't appear compelling at all.

Last week it was revealed that AOL has asked some of its Weblogs bloggers to stop posting temporarily as part of company-wide cost-cutting measures. One of its blogs, Diylife.com, is being shut down completely. Obviously, if AOL's Weblogs division was outperforming financially, one would expect it to be immune from cuts.

Even Gawker, which pays its bloggers based on the traffic their posts generate and is reportedly highly-competitive with even mainstream news media outlets, earlier this month reportedly cut the pay rate for its bloggers for the third consecutive quarter because of budget issues ("We've broken the site budget" are allegedly the words used by Gawker Media owner Nick Denton in a staff email).

Of course, some bloggers might feel happy receiving any pay at all. After all, Huffington Post co-founder Ken Lerer is on record as having stated that paying its writers is "not our financial model." Instead, Huffington Post writers should be happy with "visibility, promotion and distribution with a great company."

When looking at the business side of blogging, there too the economics of blogging don't look so compelling.

Guardian Media's 8-figure acquisition of PaidContent.org operator ContentNext represented a hefty premium to the company's revenues of "a few million" in 2007.

Even the ever-popular TechCrunch reportedly generates only 7-figures a year in revenue and it's worth noting that some of the most popular blogs appear to be making a non-negligible amount of revenue from events they operate - not the blogging itself.

While turning a blog into a million-dollar business isn't anything to sneeze at, I know individuals who are involved in less-than-sexy businesses who net more each year and they certainly don't indulge in the kind of hype and ego that is increasingly found in the upper echelons of the blogosphere.

By any measurement, as I looked at all of the available information, I couldn't help but come to the conclusion that for all of the hoopla, blogging really isn't the type of business opportunity it is frequently made out to be.

Professional and semi-professional writers who choose to work for a blog instead of a mainstream media outlet are, for the most part, extremely lucky to earn enough to pay the bills, and as I've pointed out before, they aren't going to have access to the resources that mainstream writers do because their employers don't have the level of capital that a newspaper, magazine or cable network has.

From a 30,000 foot view, all of this really doesn't seem like it should come as any surprise.

The blogosphere is quite fragmented and most blogs and blog networks have audiences that are too small to make them priorities for ad buyers.

Quality is all over the place and given the limited resources bloggers usually have access to, producing wide-ranging in-depth coverage outside a handful of niche markets (such as technology) is difficult. Much of the "reporting" in the blogosphere is just the regurgitation of commoditized news.

While there is no shortage of entry-level and amateur/hobbyist writers willing to give blogging a try as a "profession" - especially in these troubled economic times - it's difficult to retain skilled, experienced writers with uncompetitive salaries or risky revenue share arrangements.

In short, it appears that for much of the blogosphere, there is a disconnect between the economics of running a blogging business and the economics of being able to survive as a professional blogger.

As with any other industry, when businesses cannot afford to attract and retain the people required to produce the quality "products" and "services" that make the businesses "go," it doesn't bode well for the industry as a whole.

To answer the question in the title of this post - while it's clear that blogging is not a dead-end profession and business for a small few, for all intents and purposes it certainly looks that way for the vast majority.

Drama 2.0

Published 31 July, 2008 by Drama 2.0

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Ted

This post is pathetic. Please do some research next time. Everybody knows that Google is the main reason why KMM's traffic went down. They and the KMM management are to blame for not reacting /acting. The offer from B5 is pathetic. All they do is try to pick up the network for cheap.

almost 8 years ago

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Jeremy Wright

Can you say axe to grind? You make large claims about the industry (most people can't afford to pay their bills? yeah... neither can most people who suddenly decide they're professional hockey players) without any actual proof or logic behind it.

End of the day, we offered infinitely more than KMM was offering. We also offered more than any other network out there. And while it's easy to be an armchair quarterback, unless you're able to put your money where your mouth is, all of this is just the bitter ramblings of a nameless author.

Complain all you want, but we were the only ones to put forward an offer. And our offer was better than KMM's. And we're working hard with every KMM blogger to help in every way.

Cash to burn? No, we're still a business. We don't toss around cash just for fun.

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Ted: your comment makes no sense. This post was not a discussion of the intimate details about Know More Media and b5media. And your conclusion that b5media's offer was "pathetic" gets to the heart of the issue - the economics of blogging.

Jeremy: first, you mischaracterized what I wrote. But let's put that aside.

I really don't care about the drama between Know More Media and b5media. This post was not about *you*. It was about the economics of blogging.

You initially asked Know More Media bloggers to blog for b5media for $50 for the first month while you ascertained the value of their blogs and made necessary adjustments.

As I pointed out in this post, that's nothing. It's most likely far below minimum wage since I'd imagine that most Know More Media bloggers put in at least 8 hours in a month. $50 won't even fill up an average American's gas tank.

Is paying somebody a respectable wage equivalent to "tossing around cash just for fun" in your book?

In the comments on your blog, one Know More Media blogger called your offer "demeaning." Another called your offer "scraps" and said "you don’t need to shortchange people with a 50 buck token pass to determine the worth."

Those are the comments of the very people you made your offer to. They're not mine. I assume you took them to heart because you made an alternative offer.

My suggestion, Jeremy: pretend we aren't talking about blogs and look at this from the perspective of a *reasonable* person. If somebody asked a mechanic to fix cars for $50/month, how would it look? If an accounting firm asked a young accountant to do tax returns for $50 for the first month so that it could decide whether or not to make that accountant a full offer, how would it look?

Not good.

While paying somebody a respectable wage for their efforts is apparently "burning cash" to you, I think most reasonable business owners consider it an obligation and a cost of doing business.

Which gets to the point of my post - it's clear that there is a disconnect between the economics of running a blogging business and the economics of producing good blog content.

If a blog network can't be run profitably without giving its bloggers the short end of the stick (or relying on bloggers who for whatever reason are willing to work for a pittance), you don't have what I consider to be a business built on attractive economics.

Most sustainably successful businesses are able to earn profits while paying their workers a decent wage (relatively speaking) and not forcing their workers to shoulder all the risks. Novel concept, huh?

As for putting my money where my mouth is, I don't run a blog network (in case you didn't figure that out from the statement "the income I earn from my blogging activities is not my primary source of income"). So what would you like me to do? Start a charity for bloggers?

I'm disappointed you decided to take this post personally and instead of having a "conversation" about the economics of blogging, chose to attack me.

I'll end this by noting that in my business experience, I've never paid anyone I've hired less than what they're worth (by industry standards) and I've never provided services to anyone who asked me to work for less than what I'm worth.

Somehow, that has worked out just fine. Maybe you should try it sometime.

almost 8 years ago

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Jeremy Wright

Once againn, Anonymous, you're missing the point. Nobody is asking a mechanic to work for 50$/month. The better analogy, in relation to a mechanic would be:

He's working at a garage. The garage runs into financial troubles. It asks him to work for free, repairing 24 cars for the month. A competing institution says "listen, we're tight on cash, but we'll pay you 500$ for the month to fix as many, or as few, cars as you want, after that we're happy to pay you the same as all our other mechanics get, which is above market rate".

The mechanic could turn it down and look elsewhere. Or he could go in and fix 1 car and make his money. Or he could work as hard as he used to. Or he could work harder. It'd be his decision.

An even better analogy would be if there were 100 mechanics losing their jobs. What then? What garage would offer EVERY mechanic the 500$, without knowing how good they were?

As far as the comments on the entry is, the first "demeaning" comment misunderstood and eventually changed his mind. And the "scraps" comment was made from a blogger who felt that he should earn *more* than the blog's revenue.

End of the day, we aren't asking bloggers to do a specific amount of work. We're simply saying we don't know the traffic or revenue. So we need to know tha to propose a pay structure.

Given that b5 pays more per hour than any other blogging company in the world, your argument that we're asking KMM bloggers to do something indefinitely or per hour is disingenious at best.

My issue with the post is simple: You use a situation which isn't actually accurate any longer (since it was a first proposal, since we HAD to make a proposal... and we made a NEW offer which, btw, would probably end up less cash to bloggers) to paint a picture of b5/KMM and, as a result, the industry.

Which basically means your portrait of the industry is as accurate as your underlying assumptions.

My core issue is even simpler: we aren't asking what you're saying we're asking, and never were. And every follow-on point is tainted as a result.

This isn't personal. Anymore than your rampant post was personal.

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Jeremy: I think the responses to your initial offer from KMM bloggers speak for themselves.

Your response to my analogy about mechanics is quite amusing because it's unrealistic. Clearly we live in different worlds. A good mechanic laid off probably doesn't have trouble finding employment elsewhere at an acceptable rate because there are plenty of other shops that know the value of a good mechanic's skills.

The bottom line is that you wanted KMM's bloggers to work a month for a mere pittance. I don't really care if you claim that your offer is better than anyone else's - a crap offer is still a crap offer (for lack of a better term).

I suppose we simply have different values and that I respect the value of a person's time. Quite frankly, I'd be quite embarrassed to ask someone to work for me for $50/month as you have.

I find your rationale for your offer to be disingenuous.

You say that you need to know a blog's performance (traffic and revenue) to propose a payment structure. Fair enough.

You say that KMM bloggers can do as much or as little as they want in exchange for their $50. Fair enough.

Let's look at this, however, in the context of the real world where workers provide services of value to a company.

Take a large law firm. When a large firm recruits a new associate fresh out of college, it's taking a risk.

Let's say the new associate is given a $150,000 starting salary and a $50,000 signing bonus. That's within the accepted range of what a new associate at a large firm in certain cities is worth by industry standards.

According to Altman Weil, a legal industry consulting firm, the average large law firm doesn't recoup its cash flow investment in an associate until after the associate's third year.

Yet a study by the NALP Foundation, which studies hiring trends in the legal industry, found that 37% of associates at large law firms quit by the end of their third year.

You're capable of doing the math - that's painful. Yet the economics of a large law firm support the risk firms take on new associates. You don't see large firms telling associates, "We want to see how this works out. We'll pay you $30,000/year for the first 3 years and after that we'll propose a pay structure that we think you'll find competitive."

In other words, they understand the value of an associate and they don't try to shift the risk to associates who have no equity in the business.

You, on the other hand, are doing precisely that.

When you say "we aren't asking bloggers to do a specific amount of work," you damn well know that a blogger who takes your $50 and puts in the type of effort that would be reasonable for that amount (*maybe* 1-2 hours in my opinion for a less-experienced writer) isn't going to generate the type of traffic and revenue that is going to encourage you to pay them an honest wage for their efforts. You're holding out a carrot and KMM bloggers are probably smart enough to figure out the stick (a poor offer or no offer at all unless they work their butt off for that $50).

Interestingly, your comment highlights the real point of this post (which again, wasn't *your* company). You state:

"And the 'scraps' comment was made from a blogger who felt that he should earn *more* than the blog's revenue."

Is there really anything inherently wrong with that? b5media is in the business of turning content into advertising revenue. If the cost of providing those who produce content for you with reasonable compensation is greater than the revenue you're able to generate from the content produced, you have a business with unattractive economics.

That, Jeremy, was the point of this post.

If I assume that a decent writer is worth $20/hour, that it takes 1 hour to produce a decent post and that I need a writer to produce 50 posts a month, I accept that the commercially-acceptable value of the writer's time and effort is $1,000/month.

If I am unable to take the writer's work product (the posts) and generate more than $1,000 in revenue, the economics of my business model are flawed.

Why should the writer be paid less than what his or her time is worth because I have a flawed business model? I'd be fascinated to hear your answer.

Finally, this *is* an industry-wide issue, as the current AOL/Weblogs budget cuts demonstrate. As you've probably heard, some of these "temporary" cuts are now rumored to be permanent.

Gawker, which is mentioned in my post, even discussed this same topic on Tuesday:

"Bloggers have to stop thinking of themselves as white-collar creatives and more like rank-and-file workers. After all—that's how they're paid!"

"Some bloggers get paid per-post, like pieceworkers in a 19th-century factory. Some get paid for pageviews, which is even more idiotic from a worker's perspective. It means you're not paid for your labor (except your monthly minimum) but paid instead on a sort of gamble—how well your product will perform when it's thrown into the open marketplace."

"If you're blogging for someone other than yourself (not as a commenter, not as a personal blogger; those are labors of love and don't count) you deserve to be paid."

"If you're an employee or an independent contractor or a freelancer and some entity or website is making money off your labor, you deserve to be paid. It doesn't matter how solvent the company is—they're still selling ads and making revenue."

http://gawker.com/5030445/volunteer-bloggers-stop-subsidizing-the-entire-internet

And Gawker also posted a letter from an AOL blogger, which contained the following:

"I will not write for free."

"...I can't make a habit out of it [writing for free] because I have to make a living."

http://gawker.com/5030563/letter-from-an-aol-blogger-on-writing-for-free

I don't run a blog network, Jeremy, but it seems like you're a bit out-of-touch with the people who work for blogging business like yours and based on my experience in the "real" business world, I suggest you try out the following payment structure: pay your bloggers an hourly wage that is commercially-reasonable or pay them a per-post fee that correlates to such an hourly wage.

If you can't run a profitable business that way, you might want to find a business opportunity with more favorable economics or simply take your blogging dollars and make me an offer on the sweatshops I run in two South American countries (I think you’ll find that they provide a better return on invested capital).

almost 8 years ago

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Robert T

Let's a lot of hot air flying around this post - but regarding the $50 a month - seems to be a perfectly resonable offer to me. The network is about to go under - if the bloggers (creative professionals?) can put in a bit of effort for 1 month to demstrate they are still up for it & give everyone time to figure their value out, then they get a shot at a new deal & real & fair compensation.

If they rely upon blogging to pay the bills or even their future wealth and they are NOT prepared to go for it when they have to (the other option being walk away with nowt) - they aren't going to get very far in the world of entrepeneurship.

PS it's a free market so no-one has to take the offer!

almost 8 years ago

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Jeremy Wright

Sounds to me like you're just trying to stir up stuff you don't understand, "Drama 2.0".

Case and point is your new pay system. How would you propose time be tracked for hourly workers? Do you keep track of your writing that way? What about when you're just thinking about an article or stumble on something and file it away for later? No, hourly pay doesn't work.

Likewise, per-post pay doesn't work. Because if a long post is worth the same as a short post, then why write long ones? Or if we paid for quality, who's job is it to determine quality? Or if we paid per word, writers could pad words without adding real value.

No, in the blog space these pay systems don't work. Which is why nobody uses them. Anytime anyone looks at an industry and says "why don't they just..." (like "why don't the airlines JUST automatically call me when my plane is delayed?"), it's obvious they are allowing knowledge of one industry to apply to another (at best, or ignorance at worst). Problem is it doesn't work that way. Especially in emerging industries and markets.

As far as your mechanic analogy, you get it wrong AGAIN. Which really just goes to show that this is a personal matter for you. It's a matter of being right in spite of every shred of evidence to the contrary.

Because, really, the mechanic example isn't about a well sought after mechanic who could get a job anywhere. It's about a garage closing where no other garages in the WORLD are hiring. And the mechanic (or in this case 100 mechanics) can choose to start a new profession, work for a month at a reduced rate (and then make ABOVE market) or keep working at their current shop for free.

Which would you choose? Psych 101, Eco 101 and the Great Depression will point you to the answer.

Not that the blogging industry is in the Great Depression, of course.

Likewise your lawyer example is completely off base. Nobody's asking anyone to work for a year. Again, the analogy is off. It's more like you have an intern at a law firm who's being asked to work for free for the summer. There are no other internships in town. A competing law firm offers pay, bonuses, a better work environment and THEN offers that after the summer they'll give the intern more than any other intern in town.

Again, your analogies simply show how much you want to be right, at best, and how much of an axe you do have to grind at worst.

As far as the writer who wants to earn 1000$ when his property earns 500$, sorry but again it doesn't work. Not surprising, given that nothing else you've argued for works. Because it isn't service providers who set their value, it's the market. And when we're the highest paying company in the market on an hourly basis, trust me when I say that 1000$ for a blog that earns 250$, just because the writer says so isn't good business, good economics or realistic.

At the end of the day, here's the real problem: most of our writers do earn your fictitious 20$/hour. And yet you still rail against us for no good reason.

And as far as looking at 2 distinct scenarios and painting a picture of the industry (specifically "a dead-end profession and business?"... remember, your words), no. That's like saying airlines are a dead end business and being a pilot is a dead end profession. Just because fuel costs change, doesn't mean the industry is going to die. It just means only the best companies will survive.

It's that simple. Sure, the industry is going through some upheaval. That's fine. It's good. It's HEALTHY. Just like any other industry where either the revenue sourcs change or the costs change. Some companies will die, some will succeed, most will make mistakes.

But that doesn't mean the industry is evolving. It's part of all business cycles. What it means is that the industry IS an industry, whether you like it or not.

Because sorry to burst your bubble, but again, your whole argument is based on falacies. We aren't offering 50$/month for 20 hours of work. We never were. And we aren't now. We aren't asking people to work for free. Never were. Never will. We aren't asking lawyers who are worth 100K to work for 30K. We aren't asking mechanics to work for free. We aren't offering pulitzer winning authors the privilege of writing jingles.

Sorry. When you feel like basing your arguments (and hence your conclusions) on facts, give me a call. Until then, I'm done because it's the equivalent to arguing economic policy with Bush.

almost 8 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Robert: with all due respect, not everyone is an entrepreneur and not everyone wants to be one. Most people simply want a decent-paying job in which they are compensated fairly.

As Gawker pointed out:

"Bloggers have to stop thinking of themselves as white-collar creatives and more like rank-and-file workers. After all-that's how they're paid!"

As I said, it's not an employee's fault if the economics of his employer's business are flawed.

Putting that aside, let me make *you* an offer: come and clean my house every other day for the next month. I'll pay you $25 total for your troubles but *if* you prove your worth, we'll work something out that's "real & fair."

You game? Didn't think so.

Jeremy: I loved your response, especially your continuation of my mechanic example.

"It's about a garage closing where no other garages in the WORLD are hiring."

Yeah, that's *very* realistic. Apparently you missed Reality 101 but I am glad that you took the community college extension course called “How to Hire and Retain Employees Using Depression-Era Economics.”

I find it funny that you say a conventional payment structure in which employees/contractors are paid for the value of their time doesn't work in the world of blogging.

I find this funny because my arrangement with E-consultancy compensates me for my writing at a level that is correlated with the value of my time and the amount of time I reasonably spend providing my services. That certainly isn't an accident.

How do they know I'm giving them exactly the amount of time the compensation is based on? Outside of the 5 cameras in my office (just kidding), they don't.

It's pretty evident from the work product. If the work product wasn't up to snuff, I'd expect them to tell me that my services are no longer needed.

As for my law firm example, you apparently aren't aware that summer interns at large law firms are paid very well as far as internships go - some law firms even pay their summer interns more than $1,000/week. My girlfriend is a future attorney so I should know.

I think the difficulty you have with this discussion is that in most businesses where employees and contractors provide services to their employers, they're compensated fairly for the value of their time and effort given their level of skill.

Businesses of this nature do not ask employees to shoulder the burden for their economic shortcomings by stating something to the effect of, "Well I understand it's going to take you 40 hours to produce what I need but since I can only sell your work product for $500, I can only afford to pay you $7/hour even though I know your skill probably reasonably demands a $40/hour wage."

The bottom line is that bloggers are writers and for professional writers, there is a market value for their skills and it's not simply what a blog network like b5media will pay.

Would you have that journalists at major newspapers be compensated according to their newspapers' revenues? Would you have that a screenwriter for a TV sitcom pilot provide his services for $50 for the first month while the network determines if the show will make it out of pilot? Would you have that the editors at publishing houses provide their valuable services for $10/hour because the publishing houses don't know if the books those editors work on will be commercially successful?

Of course not.

Frankly, I don't know what your background is (don't really care) but I'm amazed that you can't figure out that if you're in the content business and can't generate more revenue from your content than the costs of paying those who produce it a fair wage, the economics of your business model are flawed.

Obviously, there is no shortage of people who undervalue their time and skill and will work for a pittance and there is no shortage of underskilled wannabes who will be glad to make any money at all doing something that they really have no skill to do (of course, they do your business little good because the quality of the work product is lacking).

After looking at the content on your network, such as http://www.flightnest.com/2008/08/01/skyeurope-airlines/ and http://www.flightnest.com/2008/07/27/delta-techops-signs-engine-maintenance-agreement-with-alaska-airlines/, I do, however, think you’re right Jeremy. You're getting exactly what you pay for and I was actually under the impression that your bloggers were producing quality original content.

I was apparently quite wrong.

Hell, I could probably find hundreds of people willing to post press releases, marketing blurbs and regurgitated news from mainstream media outlets for the $20/hour you say most of your bloggers make.

Since I live in South America, I can probably even get a few thousand people to do this for $1-2/hour. Shoot me an email and let’s discuss further.

PS: the dollar sign goes before the amount, not after (i.e. $250 not 250$). I think Dubya is the only other person who writes the dollar sign after the amount.

almost 8 years ago

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~C4Chaos

Jeremy, Drama 2.0,

i've enjoyed reading your passionate exchange. egos clashing aside, i learned from both of your perspectives. allow me to offer my two cents on this issue.

i think a more accurate analogy is this: b5 and KMM are live music bars. bloggers are bands who are looking to make it big, make ends meet, or simply enjoy playing a gig. one music bar closes shop. bands that are now gig-less are invited by another live music bar a venue where they can continue to play their gig. the catch? they'll be paid $50 for showing up. if the audience likes their performance then they would become a regular and be paid fairly (hopefully, industry standard rate. is there an industry rate for bands? anyway...)

(note: that in the real world some popular music bars don't pay unknown bands. but bands will line up and play for free just for the exposure and fun of doing it. this is the Huffington Post model that was mentioned in the original post.)

the economics of blogging in this case is similar to the showbiz industry. e.g. there are lots of upcoming bands who are willing to show off their talents for a meager pay (or even for free) in exchange for publicity, the opportunity to practice their craft, and for serendipity (e.g. agents on the lookout for talents). in the meantime, those band members are probably working some other jobs, like accountants, waiters, or IT project managers.

so depending on the angle we're looking at, you are both correct.

if we look at blogging from the perspective of being a profession, then i agree with Drama 2.0. no self-respecting professional would toil for some scrap money.

however, if we look at blogging from the perspective of show business model, then Jeremy has a point. e.g. he's more like an owner of a live music pub. whether we agree with his business practice "values" or not is beside the point. just like in show business people get screwed up left and right.

but here's the caveat in the band analogy: unlike bands, bloggers don't need a venue to practice their craft. they can set up their own and the world will be (potentially) watching them. if their intention is to be popular and to make *real* money, they're better off going at it on their own.

in the end, the winners in the blogosphere are the people on top of the blogging pyramid whether they be blogging moguls like Mike Arrington, or solo blogging superstars like Darren Rose, and as well as those people who are just blogging for the love of it.

thanks for the information and the entertainment,

~C

over 7 years ago

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Robert T

C4Chaos i think has nailed it - it isn't at all a commodity job like cleaning a house - it's about creating content and if you're good at it them you get popular and win. If you want to be paid a regular wage and be treated like a jobbing 'journalist' then you'd better get qualified, or experienced, popular or all three. But if you have non of those things... why are you expecting people to just turn up & offer you a fully paid job?

Drama 2.0: The comment about cleaning a house for $25 dollars is pretty irrelevant - there are plenty of jobs people take for no pay to try to get some experience or an opportunity - e.g. TV for example - if people are willing to do the same in blogging then so be it. Thats how a the free market works...

over 7 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

C4Chaos: appreciate your balanced and thoughtful comment.

I would point out that there's a huge difference between a musician and a blogger.

Musicians basically live and die by the "hit." A musician who sells a few million copies of an album will potentially reap enough financial reward to make up for all the years of past and future struggles (if he or she manages money well – big if). Most, of course, never achieve that type of success.

Many musicians abandon their dreams and those that stick with it usually toil in relative obscurity eeking out a modest living while hoping their "break" eventually comes.

There is no real equivalent to this experience in the blogosphere. You aren't going to wake up to find one of your posts on the front page of Digg and then check your bank account to find a few million dollars in it. Advertising and sponsorship have very real limits if you’re even lucky enough to get advertisers and sponsors.

Instead of comparing bloggers to musicians, I think a better comparison is made with songwriters and screenwriters.

Songwriters and screenwriters are (obviously) writers and they do receive royalties and residuals. Yet writers working for newspapers and magazines don't. Bloggers are clearly more analogous to the latter than the former.

While the reasons why songwriters and screenwriters receive royalties and residuals while “journalists” don’t could serve as the basis for a new discussion, for simplicity’s sake, consider that if you write a "hit" song or write the screenplay for a "hit" movie, the revenues from record and ticket sales are likely to be substantial and thus there’s a lot of money to go around. Revenues are also very simple to keep track of and divvy up.

If you are a journalist at a newspaper and write a fantastic exposé that receives praise and awards, on the other hand, where's the money from the exposé itself? How does the newspaper actually track any ancillary financial benefit from it so that the financial rewards can be shared with the writer? It’s damn near impossible.

This aside, the bottom line is that the vast majority of bloggers aren't entertainers and the amount of money being made by even the most "successful" bloggers demonstrates that blogging isn't anywhere close to creating the same types of fortunes you see in the entertainment business.

Most bloggers aren't being asked to produce the "creative works" that songwriters or screenwriters produce and most apparently aren't even being asked to engage in professional "journalism."

At best, blogging is really not all that different from writing for a local daily. At worst, it's practically grunt work.

The only real benefit the average blogger will ever receive from his or her efforts is a paycheck. And most appear to have a modest ambition that reflects that - to earn a fair wage.

As you said, there are few barriers for those who have bigger dreams and when you look at the type of bloggers who are writing for networks like b5media, it's pretty evident that these are not the aspiring musicians of the blogosphere, and frankly for good reason.

Robert: first, if you think success is as simple as "you get popular and win," I'll be honest in stating that I think you're incredibly naive. Becoming "popular" in your field doesn't necessarily lead to an equal level of financial success. Gaining popularity is difficult - capitalizing on popularity is even more difficult.

"there are plenty of jobs people take for no pay to try to get some experience or an opportunity - e.g. TV for example"

Before I address this, I should point out that I spent part of my youth in West Los Angeles, hanging out with friends whose parents were involved in the entertainment business. And I happen to have friends and business associates today who are involved with the entertainment business. So I have a bit of understanding about "TV."

There are a lot of *unemployed* actors and actresses in Los Angeles. You are not going to find *employed* actors and actresses in Los Angeles who aren't being paid. There's a huge difference between choosing unemployment (or waitressing or bartending) while pursuing the career of your dreams and actually being employed but performing the work for free. You seem to believe that there are lots of people actively working in television business for free in exchange for "experience" and "opportunity." That’s simply not the case.

In most countries, there are these little inconveniences called labor laws. These laws actually require employers to pay their employees! Absurdly, not doing so is illegal and usually subjects a business owner to significant fines and liabilities! Can you imagine?!

If you're thinking of the concept of "internships" but knew anything about them, you'd understand that there are laws governing what constitutes a legitimate internship and what doesn't. Internships are not designed to benefit companies at the expense of interns by giving companies a means to avoid paying for labor. In fact, they are designed and required to do primarily the opposite - benefit the intern. In other words, you're not going to find skilled professionals (as opposed to inexperienced students on summer break) doing real work for no pay because in most developed nations, that's against the law.

In short, I'm all for "free markets" but I'm afraid you confuse the economic concept of "free markets" with "free labor."

I'll conclude with two final points:

1. In any field, those who aren't qualified and or experienced usually don't succeed. You seem to believe it's likely to be different in the blogosphere but I think you'd be hard pressed to find an uneducated, unintelligible blogger with no relevant knowledge and/or experience who has achieved notable financial success. Can you even give me a list of bloggers who personally *net* more than $150,000/year primarily from their blogging activities? I suspect it’s quite a small list.

2. When I see 6 and 7-figure advances being paid to popular bloggers or I see as many Ferraris, Bentleys and Rolls Royces outside of the Blog World Expo as I see in valet at the Peninsula Beverly Hills when I visit, I just might start buying into the notion that bloggers are creative elites. Until that time, since they most closely resemble "writers," "reporters" and "journalists" in the "real world," I'll stick by the belief that they deserve to be compensated like them.

over 7 years ago

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~C4Chaos

Drama,

thanks for the response.

you said: <b>"A musician who sells a few million copies of an album will potentially reap enough financial reward to make up for all the years of past and future struggles.... There is no real equivalent to this experience in the blogosphere. You aren't going to wake up to find one of your posts on the front page of Digg and then check your bank account to find a few million dollars in it."</b>

but there is an equivalent in the blogging world. "selling a few million copies of an album" = viral traffic. as you know, even ancient posts (allow me to use a cliche) have very long tails. it's true that you'll likely not find yourself a few million dollars richer, but with luck (or curse) you might wake up one day with Digg or Slashdot crashing your server. this is what blogging moguls are vying for. these are what wannabe bands in myspace and hoping for.

<b>"Instead of comparing bloggers to musicians, I think a better comparison is made with songwriters and screenwriters. "</b>

good point. though my original comparison was not limited to bands but the show business industry as a whole (which includes actors, screenwriters, extras that get occasionally screwed by the biz). that said, most bands (at least those i respect) write their own songs :)

<b>"the bottom line is that the vast majority of bloggers aren't entertainers and the amount of money being made by even the most "successful" bloggers demonstrates that blogging isn't anywhere close to creating the same types of fortunes you see in the entertainment business."</b>

i agree for the most part, except, that there *are* bloggers who receive similar types of fortunes in the entertainment business (e.g. Perez Hilton, Pro Blogger, Steve Pavlina) but most of the time these are *individual* bloggers, not part of blogging networks. a corollary to this is that, although some bloggers don't directly make money from their blogging, if they get the traffic, then they could leverage the traffic in service of their money-making endeavors (e.g. promoting their books). blogging moguls are in their own league . but if we're going to talk about the economics of blogging then we have to consider different economic possibilities. b5media, is only one of the economic models.

<b>"At best, blogging is really not all that different from writing for a local daily. At worst, it's practically grunt work. "</b>

i agree, partially. this depends on the kind of blog that you have. you can certainly have a blog emulate a local daily. but blogging can be about anything. it's only limited by the blogger's creativity, intention, and ambitions. but since we're specifically talking about blogging networks like b5media then yeah, i get your point.

again, i'd like to thank you for bringing up this discussion. serendipitously, Salon just opened Open Salon.

see: http://www.inquisitr.com/2291/like-the-blog-leave-a-tip/

Salon is using the micro-payment model to compensate its bloggers. this sounds interesting and fair. but the micro-payment model has yet to be proven. i wouldn't quit my day job for it. i'd like to hear your thoughts on this.

keep on "Selling the Drama". (note: in case you don't know, this is a title of a song from one of my favorite bands. i think they're still getting a lot of royalties from this :))

~C

over 7 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

C4Chaos: I still fail to see how you can compare selling millions of albums to having your blog taken down by a flood of traffic from Digg or Slashdot.

The former could result in millions upon millions of dollars in royalties, not to mention significant additional money-making opportunities. The latter has no guaranteed correlation to cash, let alone significant amounts of it.

I know who Perez Hilton is (don't know who "ProBlogger" and Steve Pavlina are).

First, Hilton's level of success is the exception, not the rule.

Second, while his media deals are the result of the popularity he acquired as a blogger, I would venture a guess that Hilton has made more from his media deals than he has from pure blog-related deals.

Finally, I think you underestimate just how much money some people in the entertainment business make and how fast money can be made. Obviously, most people don't "make it" but there are far more making six and seven-figure amounts every year in the entertainment business than those making big money in the blogging business.

You might find this interesting as it provides some perspective:

http://www.wga.org/uploadedFiles/writers_resources/contracts/min2008.pdf

PS: "selling a few million copies of an album" is rarely a truly "viral" phenomenon. You'd be amazed at how much money record labels invest in promoting even the acts that already have huge followings.

over 7 years ago

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Robert T

Drama: Just checked in on this post - (PS just read your stuff on Shiny Media, where i think you are 100% spot on) - not sure how we ending up talking about success, LA, actresses, internships etc. My only real point is, if someone wants to offer a blogger an upaid opportunity to get exposure, and that could (honestly) lead to potential success later on, then i see no problem with it. For the record - i don't think blogging is that worthwhile, or that it is ever likely to pay a decent wage for the vast majority. BUT everyone has the right to offer (and accept) these kinds of deals.

over 7 years ago

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