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Blog Networks and How they Split the Cash

Fascinating article over at oir.org on how editorial lines are blurring as bloggers’ salaries are tied to traffic. I’m not sure how I missed it when it first came out – but I’m glad Duncan mentioned it.

The article looks at a number of models that blog networks and multiple author blogs are using to pay authors and focuses upon the growing trend to tie payments to traffic levels.

Gawker has a complicated sounding system with a ‘per post’ payment and then a bonus system that is based upon traffic levels. The system rewards increases in traffic but sounds a little stressful for editors. One of Gawker Media’s writers comments on the system there:

‘According to this writer, a blogger with high traffic growth can “accrue a lot of potential money.” The problem is that the bonus is “banked” and the entire sum can’t be taken out in one month, leaving it to drop as the traffic drops in future months. To make it even more complicated, traffic bonuses are weighted according to a multiplier depending on the subject matter of the blog.

“There’s a maximum withdrawal per month,” the writer said. “So you could actually make $50,000 in traffic bonuses per month, but you could only take out $5,000 or so. But by the time a few months have gone by, your traffic could have trended downward, and it could have eaten up the traffic bonus you had earned. … It makes sense for Nick, but it makes all of us really uneasy.”‘

Weblogs Inc on the other hand takes a simpler approach. After testing a 50/50 split system with authors they’ve moved to a flat fee system where authors are paid a negotiated amount per month (between $100 to $3000).

‘”We’ve separated the concept of pay and traffic as I think it can be very dangerous to link the two,” Calacanis told me via e-mail. “The biggest problem with traditional media is that they are always chasing ratings, which is an extension of their 10Q [earnings report]. People are coming to blogs because they are NOT playing the ratings game! What difference does it make if a blog gets 10% or 20% traffic [spikes] if it alienates the core audience by playing the ratings game?”‘

Jason Calacanis says that the money making part is his responsibility at Weblogs Inc and he’d rather his authors spend time writing quality content rather than chasing the big story. Having said this I’m sure the level of payments (there is a big variation between $100 and $3000) at Weblogs Inc is somehow tied to traffic – even if indirectly in accordance with the earnings level of the blog concerned – no doubt other factors like numbers of posts etc are tied into agreements.

As an aside (and not mentioned in the article) are other networks which all seem to take variations on the above approaches.

9rules network (which is in the process of launching) – hasn’t made it clear exactly how it will pay bloggers but indicates that bloggers take the majority of earnings.

Shiny Media – again I’m unsure of their model and despite some serious searching on Google am yet to find anything. They do seem to be open to offers for bloggers to join – but no mention of compensation. I’m hoping to catch up with their team in London in June so might get more of an idea then.

Creative Weblogging is another network who share revenue with their bloggers – their FAQ page states that the split is 60/40 – with authors taking the 40% cut.

Back to the article – its another fascinating glimpse into the world of the bigger networks which as per usual leaves me with mixed feelings of inspiration and relief. Inspired by the levels that can be achieved with blogging and relieved that I’m not the one doing all that negotiating with authors and can simply just ‘Blog On’ and know that at this point 100% of my earnings end up in my own pocket (less the half I have to give the government – but that’s another issue).

I’d love to hear your opinions and experience in working with networks as bloggers. I know that many of you currently blog on one of the above networks (and others) and I’d be interested to hear your opinion on what the best method might be.

About Darren Rowse

Darren Rowse is the founder and editor of ProBlogger Blog Tips and Digital Photography School. Learn more about him here and connect with him on Twitter, Facebook, Google+ and LinkedIn.

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Comments

  1. I’ve considered the feasability of joining/starting one of these networks and I came to the conclusion that while it’s relatively easy to be successful, it’s exceedingly difficult to distribute earnings fairly. I have no idea which of the above models I prefer – but I’m quite happy going solo for now.

  2. A friend of mine and I started a simplistic network. The blogs are at http://startup.blogscorp.com/, http://psp.blogscorp.com/, http://seo.blogscorp.com. The idea being – if you own the blog 100% (write daily, etc.), you get 100% of the earnings. But you also link to others on the network, and if you feel like, contribute to collective blogs, where all the earnings would go towards the network server costs, etc.

  3. Duncan Riley says:

    I’ve got to say that Calacanis usually gets a bad rap around the place yet Creative Weblogging only gives authors 40%! Anything less than 50% has got to be pretty close to theft. Interesting that Calacanis has changed the model. Although the new version is better I would think that for any new network starting up it would be a difficult proposition to follow (serious VC funding aside) and that the revenue split model is the best way to go.

  4. Darren says:

    Agreed Duncan – I think the revenue share model would have to be the way to go unless you had some VC.

    Another model I’ve toyed with is rather than paying authors you let them run their own ads on your site (or on a % of the impressions of their posts). This is something I’m going to experiment with on our little blog collective.

    The only problem with revenue sharing is that when a blog first starts there is so little to share that it can be quite disillusioning for bloggers and doesn’t give them much incentive to write. Perhaps a base weekly salary is a good idea with an incentive plan built in when they reach certain revenue goals.

  5. WR says:

    From the blog networks point of view, I believe a salary based system is the way to go. When there is growth, the network wins. Ofcoarse, blogger salaries should be reviewed and adjusted periodically, but all-in-all it is best for the network to handle all advertising etc.

  6. Jamie says:

    Duncan’s right – for a new network, revenue splitting is the only realistic way to go. It would probably be ideal to have a salary based payment system, but that just isn’t going to happen until you start dealing with the same kind of revenue as the bigger players.

    For the record: our split in 70/30 in favour of the bloggers – http://blogambition.com

  7. Shai Coggins says:

    This is a very interesting post, Darren. Thanks for sharing it. I have recently started a small blogging network (currently with 6 blogs “live” and about 5 more in the making). I’m experimenting using a combination of blogger payment — letting bloggers run their own ads (with some guidelines) together with network-wide ads. When ad sales start, I plan on using revenue splitting with that. But, I also plan to incorporate bonuses, etc. When you say you keep revenues to yourself 100%, what do you mean? How do you pay your bloggers in your network?

  8. Ashley Norris says:

    Interesting debate. Just for the record we have used a series of different approaches. Some of our bloggers get a flat fee, some are on a revenue share and some are paid per post. They all seem to work reasonably well, though there are obvious issues with the revenue share approach which mean it can only work in very specific circumstances.

  9. Scrivs says:

    I can give some minor input and say that 9rules works on a basic tiered structure. Bloggers earn a certain % once they reach a monthly revenue goal. Either:

    * 60%
    * 70%
    * 80%

    Real simple. If you are blogging you have enough to worry about already, you shouldn’t have to worry about if you are getting paid enough for your work. But there are so many different models you can work with and so many people willing to join that it’s fair to say there will never be a “right” way to do things.

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