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April 22, 2005

Blog Networks and How they Split the Cash

Posted in: Pro Blogging News

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.


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