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Jason on Blog Networks Revenue Share

Martin has an interesting post on Blog Networks with some comments about B5media especially. Interesting in the comments section are some reflections by Jason Calacanis from WeblogsInc who comments on the idea of revenue sharing as opposed to paying bloggers outright.

While WIN have gone for the paying of bloggers outright after their bloggers reacted against a revenue share/split model – Jason writes that perhaps things have changed now with more bloggers wanting to explore making an income from blogging and as a result an increased number of bloggers willing to do the revenue share thing. He writes:

However, it’s different today – there might be many more people out there to work for a future share of revenue. So, I think B5 and 9rules will both do very well in this space. In fact, it’s the most under serviced space right now, so they have the market all to themselves.

I think that there is some sense in this. What interests me is that despite the criticism of b5′s revenue share model by a few people – we’ve had over 100 bloggers have applied to write for the network – with more pitches arriving in our inboxes every day. These applicants are not your niave, ignorant or inexperienced bloggers either – they know what they are doing and know where they want to blog. Something is going on here.

Also interesting are Jason’s comments about how much their bloggers currently earn:

Today we have over 130 people getting a check every month. The average WIN blogger is doing 80+ blog posts a month (or ~3 day). some folks make a couple of hundreds bucks, some folks a couple of thousand.

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Comments

  1. Matt says:

    I’ll be happy when my blog manages to do either of those numbers in a month. Today has been a new milestone, though. $1.52! Woohoo! LOL

  2. “coffee a day” is one of the first major milestones Matt, Keep it up!

  3. jesse says:

    Hmm. I’m getting exactly zero dollars a month (possibly because I have no advertising) when you group that with an average of only 27 visits a day, I wouldn’t exactly call myself succesful.

  4. ME Strauss says:

    It’s not that different from the publishing model. Work-for-hire or royalty. When we we would negotiate a contract we could often state it straight out “share the risk, share the benefit.” Nothing makes more sense to me.

  5. jesse says:

    scratch that.

    I’m getting about 28 cents a day in advertisins (a 1 year, 100 dollar deal)

    Considering that is 10,000 cents, I can say that I am a six-figure blogger

  6. Matt says:

    Thanks, Jeremy! I’m getting there. I’m all the way up to $1.87 now today! That’s a serious first! LOL. If I make it over $2, I am IMMEDIATELY going out and buying that coffee. HAHA. However, I’m not really sure why today is so high. Traffic is up some, but my CTR is through the roof. Some ridiculous thing like 33%. I think someone was actually shopping and going through my ads, which is cool with me, but means tomorrow I’ll probably go back to my normal 50 – 80 cents. Still, in the grand scheme of things, for a month old blog, that seems okay to me.

    On an almost completely different note: 100 years ago, yesteday Albert Einstein, a 26 year old researcher, published his paper wherein he theorized that Energy does in fact equal the product of Mass and the global constant for the speed of light (C), squared. This is the reason that atomic bombs work. A small amount of mass, when turned into energy appropriately, can level a city, with ease.

    Me, I can’t even figure out how to get more than 30 visitors to my web site in a day. But I’m working on it!

    [excerpted from my very own blog about blogging LOL]

  7. Hmmm, never thought my little post would cause such attention…

    You know, I was even a little worried when I posted it seeing the total respect I have for Darren and what he has given us (ProBlogger). But there you go, I just had to have a say. If we can’t be honest with each other and have an opinion might as well pack up our bags and go home…

    Let me say this: reading through the b5 blog – I’ve read every post – I must say I was totally impressed by the planning, the design and thought that went into the launch of this network. You can easily tell that a lot of effort had gone into it – me thinks many a late night … think: skype from Melbourne to Perth to Canada ;-).

    Everything I was reading was going along fine until I got stuck on the ownership issue – that’s my only bone of contention.

    Just would love to make sure that everyone knows what they’re getting into: firstly, there is no guarantee of an income and you could be doing alot of work for very little (financial) reward. Against this is the obvious increase in recognition you will get.

    So to stop crapping on: if you’re in it for the money it might be a long hard slog – and if you’re in it to get your name out there and build your personal branding you’re on the right horse.

    Now, any spots for me on b5, Darren? ;-)

  8. Darren Rowse says:

    pitch us an idea Martin :-)

  9. Nandini says:

    I have been toying with many ideas to pay bloggers for a small blog network which I will be commencing on 5th of next month.

    IMO revenue from every blog can`t be same, irrespective of their quality content. Blogs targeting technology and business will have their edge over the ones covering social issues.

    By fixing a percent of share you are killing the revenue for bloggers who fall in the 2nd category. Since a good blog network should cover a good no. of topics in every subject, you have to come out with something which can be financially sound for everyone. Therefore I think paying per post, or weekly to your bloggers will motivate them more, unless you are only covering mortgages, finance, gadgets etc only.

  10. Matt says:

    I think I disagree with you, Nandini. While it might seem nice for the individual blogger to be paid by the post, that feels like a very blue collar, factory worker-esque way of going about the idea. If the blog doesn’t make any money, because it’s topic is not one that drives advertising very well, odds are the network loses money on this. And on the flip side, if you write a very product driven site that absolutely takes off, and you’re only being paid a set rate per post, but the network is making a killing, how does that help the individual blogger? I think, for whatever my opinion is worth, that sharing the risk and the reward is the best way to motivate people, in almost any business. I don’t think it’s any different in blogging. Give the people a reason to write something that will bring in visitors and they will do so. Pay them $10 a post… and I think you get very workmanlike posts and unsuccessful blogs.

  11. Matt says:

    Oh, and by the way… a little while ago, I was forced to go get coffee! $2.71! Judging from my traffic origins, I suspect some of you here may have had something to do with that. So, to all of you I say: “Thank you for the Caramel Mocha Frappucino!” It was delicious!

  12. Cary says:

    Mmmm, Moooooooooocha :D

  13. Nandini says:

    I have worked with risk and share model before, but they I have seen creativity and subject interest taking back seta while money rewards driving the vehicle.

    People weren`t just ready to work on their own interests even if you offered them 100% revenue share. They were only intersted in getting the gadgets, technology site under their claw.

    Revenue sharing model judges blogs interms of money only, just might be writing really good for a topic while another blooger below average on another topic and still earnimg more.

    I don

  14. Nandini says:

    I have worked with risk and share model before, but then I have seen creativity and ‘subject interest’ taking the back seat while ‘monetary benefits’ driving the vehicle.

    People weren`t just ready to work on their own interests even if you offered them 80-90% revenue share. They were only intersted in getting the gadgets, technology site under their claw, beacuse they knew even 50% revenue share for these topics woud fetch them real $$.

    Revenue sharing model judges blogs interms of money only, you just might be writing really good for a topic while another blooger below average on another topic and still earnimg more.

  15. Matt says:

    You’re absolutely correct, Nandini. But if an author is not part of a network and chooses to write about a topic that is unlikely to make a lot of money, they would have that same wall to climb.

    I don’t think that a blog network can be expected to insulate it’s writers from risk. I think the network should be there to provide guidance, support and give the authors every possible advantage to make a success out of any topic, but with the realization that some topics are more lucrative than others and generating profits from many news or topical type sites is going to be difficult and require that the author is capable of writing in an engaging style that will bring readers back again and again. They have to have great ideas.

    If authors are going to be paid x dollars for posting something, no matter what revenue is generated by the site, what is the motivation for writing a great blog instead of an ordinary one? How does the network maintain in them a strong sense of ownership or partnership, once the first blush of passion and enthusiasm for the project has worn off?

  16. That was a good post Martin, and I enjoyed reading all of the comments on both blogs, there and here. Being the accountant / consultant that I am, I thought I would put my two cents in .. because I can solve the problem once and for all! ;-D

    It’s a good argument about the social thing. Yes, more people will prefer to click the ads on kitchen gadget blogs because that interests people. We want to see innovative stuff to cook with or maybe buy to give presents to people. Gadget blogs gives us ideas, ads are presented and we click them. That’s why everytime you hear someone or some network is making tons of money blogging – they have a great gadget blog.

    But, people also want to read about life in Afghanistan, or in the Ghetto, or Surviving Katrina, or Crossing the North Pole .. but, it gets tiresome clicking ads because all of them seem to want you to give blood, or donate money. They can be well written, thought provoking and topical blogs, but if the blogger doesn’t make money – the blog will ultimately fail. Sure, you can give someone two weeks notice but anybody in business will tell you that high staff turnover is BAD for business.

    So, this is what I suggest. I think that if all of the revenues are pooled into one lot .. 60% to the corporation – 40% would be allocated to the bloggers.

    Off of the blogger’s 40% cut – the corporation should deduct some fixed costs .. administrative fees, cost of running the websites, etc. The rest should be distributed evenly to all the bloggers in the network, based on the traffic of unique visitors – instead of ad revenue. This can be the ‘base’ salary for the blogger. It is not for the number of posts that were made, but based on the number of readers there are.

    Out of the corporation’s 60% cut – 20% (or more) is allocated for bonuses and incentives.I’m sure you can come up with some traffic and ad revenue targets. You guys are the smartest! All blogs that exceed these targets will share in this 20% on a sliding scale, based on its own statistics over targets, compared to the rest. It would be much better for the Corp to give up this 20% of higher revenues, than the first $100 of the lower traffic and ad revenues.

    Besides all of these new blogs happening every second of the day, it seems like new blog networks are also happening, almost like getting unionized. I myself registered a new domain.. HART-Empire.com a few weeks ago .. Why? I don’t know. Maybe because I can. There may be a lot of bloggers out there with great ideas for kitchen gadgets .. but how many gadget blogs can one blog have? The answer is not that many. I’ve read a few times that the new network has received 100′s of ideas .. and it sounds like that is a good thing ?? To me, you guys are the cream out here and the existing blog networks will shape what the rest will probably end up doing in the next few years … personally, I thought you should have received 1000′s or even 10,000′s of new ideas ..

    Anyway, I digress .. and seemed to have typed a lot! I probably should have just blogged this in my own blog! Drats. Oh well .. I think in conclusion – even lawyers do “pro bono” work .. which means “for the public good”. I think that where blogging is going .. you will have to truly have a universal appeal, to be successful.

  17. Nandini says:

    >> The rest should be distributed evenly to all the bloggers in the network, based on the traffic of unique visitors – instead of ad revenue.

    Yeah, ad revenue should never govern the pay check for bloggers. Otherwise many good issues will be never written for.

  18. Matt says:

    That is an interesting idea, HART. I love a good compromise!

  19. hi jason, does this revenue sharing model can be applied for citizen journalism sites. Are any other appropriate model…

Trackbacks

  1. [...] First it was Martin posing the question of whether or not blog networks are right for you, which was then followed up by Darren with commentary from Jason Calacanis. Martin emailed me a couple of days ago when he posted the entry and asked if I could offer my opinion. Well I checked back a little later and the conversation had exploded with thoughts from Jason Calacanis, Jeremy Wright and other blog network owners. [...]

  2. [...] Many more well-known, top Bloggers have offered up their thoughts. At Martin’s post, Jason Calacanis ends his comment with “Certainly the folks at B5 and 9R are all really smart… they’ll figure it all out” and provides motivation for Darren to express additional insight in this post Jason on Blog Networks Revenue Share where he discusses some of the attributes of the Bloggers applying to b5 saying “These applicants are not your naive, ignorant or inexperienced bloggers either – they know what they are doing and know where they want to blog.” [...]