Blogging for Dollars

My neighbor Bill Quick is experimenting with a blog-for-pay model as part of the newly launched Blogging Network. Some people like the idea, others seem affronted by it. I think it's great that Bill and others are going out on a limb to try a new method for monetizing their talents, but I'm skeptical that this particular approach is the optimal way for a blogger to make money.

First, I should qualify my expertise by saying that I've been professionally involved in developing content-based Internet businesses in some capacity or other almost continuously since 1994. Yes, that's a 4. Which means that I've been involved in this space as long as anybody else, and my predictions are still as worthless as everybody else's. But here are some of my observations.

1. You're going to need an awful lot of readers paying $2.99 a month before you generate enough money to be interesting.

2. This particular payment scheme does not scale very well to either incent new bloggers to join the network, or to motivate old bloggers to welcome new ones.

3. Consumers are terribly resistant to paying for content, particularly under the following conditions:
a) they've been trained to think of it as "free"
b) there are readily available free substitutes
c) people seldom pay for content in and of itself, but they will pay when they perceive value in the delivery medium, e.g. book, CD, cable wire and decoder box. That rules out most online stuff.

4) The few examples of (non-porn) Internet content services that are making significant revenues -- e.g. Wall Street Journal, I think are almost entirely funded by corporate users.

5) The one defense that Blogging Network has is to exclude non-subscribers, but that defense can be readily breached. i.e. if it ever started to produce really cool content, you know that within 5 minutes there will be a "BloggingNetworkWatch Blog" that posts the cream of the crop for free. Yes, that will violate somebody's intellectual property rights, but just think of how many $2.99 a month subscribers you're going to need just to pay for the very expensive lawyers you will need to hire in order to defend those rights.

6) Finally, this particular payment model, I think, is threatened by the very essence of blogging. Think about it this way:
Blogging is to journalism as Open Source is to software
Think about it. Microsoft and the New York Times are Cathedrals. The Linux community and the Blogsphere are Bazaars. In both cases there is a decentralized, self-organizing, and self-correcting "volunteer army" of passionate, creative and obsessive geeks. It is those qualities that turn the best output of the blogosphere into an increasingly important link in the media value chain. Bloggers will never replace the New York Times, just as free software will never replace a lot of the enterprise software that's too boring for Linux hackers to write out of love. But both phenonmena make their respective ecosystems more robust. And just as cheap Linux has put severe pricing pressure on commercial operating systems, the ever ready army of volunteer bloggers will ruthlessly conspire to drive the margins of the paid bloggers to 0.

Not being one to simply throw cold water on somebody's else's parade and walk away, I also have some thoughts on viable economic models for blogging. These are similar to the economic incentives for the developers of free software.

1) Personal satisfaction. That's my compensation. Notice that I don't even have a tip jar on my site. I've harbored an ambition to write for an audience ever since I was a little boy. I write because I feel I have ideas to spread and stories and jokes to tell and I enjoy the feeling of sharing them with an audience. Now I can have all of that without quitting my day job. In the pre-blog days I would have had to make larger sacrifices of my time and income to both write and find an audience. Having said all that, if there are any editors out there who love my work and want to pay me for my writing, please call me, I'm in the book.

2) Reputation building and self-promotion. For example, as career building for aspiring journalists. I gather that the traditional career path for many journalists starts on the copy desk or the neighborhood precinct beat, or the farm report at the 5000 watt radio station. The blogosphere will probably provide a different entry point. Also as we already see, professional writers use their blogs to practice, network and build audience for the paying projects. In addition, we're already seeing various celebrities writing blogs. In time, I suspect, many celebrities will have blogs for PR purposes, and many of these will be anonymously ghost-written. Who will the PR agencies turn to for this, but to... amateur bloggers who have proven their stuff.

3) Tip Jar like with shareware and public television, people do make money this way, but few will get rich.

Other models may emerge, and if I happen to be wrong about Blogging Network, then its founders and bloggers deserve to laugh at me all the way to the bank. And in any event, I wish Bill luck in finding the optimal model to support himself and his fine work at the DailyPundit.

Posted by Stefan Sharkansky at August 30, 2002 06:49 AM