Some thoughts and photos - RSS - by nikhil bhatla, -
Home Archives May 2005

« CHEC - Mind Ruts »
Blogging instead of Jobbing
May 8, 2005, 10:05p

I think it would be cool to be able to blog for a living. I was thinking about this the other day on the long drive to the WC (Walnut Creek) from my job in the MV (Mountain View). In thinking about how I could pull something like that off, it became clear that this problem was but a single instance of a more general problem: how to create a sustainable business selling content on the web. As more and more content consumption moves from traditional broadcast (TV, radio) and print (newspaper, magazine) to the web, creating a sustainable business model becomes more and more important and lucrative.

So these were the categorized options I was able to come up with:
  • Consumer pays for all content or some "premium" (up-sell) content:
    • Pay one-time fee:
      1. Micro-payments for micro-chunks (e.g. charge $0.05 per article or photo - no one that I know has really pulled this off yet)
      2. Mini-payments for mini-chunks (e.g. charge $0.99 per 20 articles or photos - iTunes has been able to pull this off, charging you per song instead of per album. charges you $3 per archived article, but I don't know anyone who has ever paid this)
      3. Full-payment for the whole shebang (e.g. charge $100 for unlimited reading and viewing for all time - few websites do this, as most charge a subscription fee)
    • Pay subscription/recurring use fee (e.g. charge $25 for 1 year of reading and viewing - charges $35/yr for their Premium subscription, flickr charges $25/yr to host your photos)
    • Pay optional donation "tip jar" (e.g. Paypal tip jar with recommended donation of $20/yr - NPR is very successful with this approach, and Kottke recently quit his job to blog full-time with this model; patrons usually receive a free gift)
  • Free for consumers (someone else pays - most often the advertiser is the product's producer, promotion agency, retailer, or the government):
    • Interruptive commercials (these are the *most* annoying)
      1. Non-skippable (e.g. showing a full-screen ad that you must view for X seconds before reading an article or looking at photos)
      2. Skippable (e.g. showing a full-screen ad that you can skip before getting to the content - does this for some articles if you aren't a subscriber)
      3. Pop-up/under (used by countless sites and found so annoying that there is now a thriving industry creating software to block pop-ups)
    • In-context advertisements (these are much less annoying, depending on how much they stand out or how relevant they are)
      1. Paid inclusion or paid placement (e.g. paying "Castaway" $x million to include Fedex in the story; paying a publisher to link to your site - many search engines used to take payment for being included in search results)
      2. Targetted (e.g. showing targetted Google Adwords next to articles or photos - with Google Adsense, hundreds of thousands of publishers have placed Adwords on their site)
      3. Untargetted (e.g. banner ads - "Punch the Monkey and win an iPod!")
You can have various options for pricing as well:
  • Fixed pricing (simplest - e.g. most pricing in the US)
  • Negotiated pricing (most time-intensive - e.g. most pricing in India)
  • Auction pricing (need to have something in high demand - e.g. eBay or Google Adwords)
Of course, a content provider can combine one or more of the above business models. For example, one could use advertising to mitigate the costs, but not reduce them to zero so that the consumer stills needs to pay a lowered, though still nominal, fee. Another alternative is the strategy of the "loss leader", whereby a product is sold at or near cost in the hopes that the consumer will buy something with higher profit margins while they're in the store. Best Buy uses cheap CDs as a loss leader.

After outlining these options, the most palatable would probably be to show some sort of non-super-annoying advertising for everyone by default (e.g. banners, Adwords - whatever earns the highest revenue), and readers can pay a donation to not see the Adwords, get a free gift, and see "premium" content (e.g. certain compromising photos! - just kidding). This would be on a subscription basis, with the first X subscribers getting a lifetime subscription for the bargain price of a 1 year subscription.
I think the ads + donation model would work, but it would be far from ideal. Ideally, anyone could create content and get paid for it automatically if it is of value to people, i.e. if it is popular. One creative idea that probably wouldn't work in the real world:
  • ISPs could divide %X of their service fee among the most frequently visited websites that the subscriber visited, proportional to how frequently the subscriber visited the site. For example, if the ISP had $10 to pay to websites, and your site was 1% of all the pages that user visited in 1 month, you'd get a $0.10 check from the ISP at the end of the month for that subscriber. Sum this across thousands of subscribers, and it may just be a micro-payment model that works.
I'm not quite ready to make this transition for my site, but maybe one day.

Read comments (1) - Comment

Keith Gould - May 23, 2005, 7:06a
Slashdot uses the model that you find most palatable. As a paying subscriber, the ads are gone, but most fun is my news 15 minutes earlier than non-paying subscribers.

« CHEC - Mind Ruts »

Come back soon! - Like this design? Contact nikhil to setup an account.