Wednesday, September 29, 2010

Monetizing A Hobby

(Crossposted from my noise blog.)

Mr. Myers at Sens Army Blog is obviously looking at the internet with a bit of jealousy in his heart these days, and is wondering why he shouldn't get paid to do the work he does.

I'll be up front: I'm picking on Mr. Myers here both because his article happened to come up in my RSS reader, and because he's been here before (see I'm Selling Out And Need Your Feedback).

As a freelance writer, Mr. Myers has every right to set both the expectation of compensation for his submissions, as well as the price he wishes to charge for that work. However, nobody is under any obligation to pay that price, with the resultant penalty that either those potential readers have to do without reading his work, or new work doesn't get created because Mr. Myers is off doing something else that someone is willing to pay him to do.

And that's the key.

The undercurrent to my reply to Mr. Myers' first go-around was "you can't sell out if nobody's buying". And the same rationale should be presented here, as well.

Economically, prices are set by willing seller selling to willing buyer. When the buyer in this case is looking at the supply of "writing done by Mr. Myers", the supply is sharply limited and Mr. Myers has a natural monopoly on this very narrow market. If the market in question is "Senators bloggers of a quality better than 'fanboys with little insight to give(*)'", the market is somewhat wider, and populated with people who will participate for no monetary compensation. Given that, the potential buyer would be foolish to pay for something he can get for free.

On the other side, the economics of internet businesses are still somewhat hand-wavey. The golden years of being paid non-fractional-dollars for low-thousand-impressions are long gone. Even a thousand viewers will add very little in the way to immediate bottom-line revenue to an internet business (see also Mr. Myer's response to my comment on his older article). So from an immediate revenue sharing angle, there is not much in the way of immediate revenue to share.

So it is unfortunate that the market has decided that the immediate value of "sports blogging" is so low that it averages out to might-as-well-be-zero for all but the highest end of the market(**).

But that's economics for you.

People who try to blog for money are like those setting up in the restaurant business. The vast majority of independent restaurants or clubs fail to last even one year before the original owner runs out of money. Done well, it is a lot of work, and even high quality writing is not necessarily a guarantee of success since the problem of attracting an audience in the sea of noise that is out there.

Or perhaps a more apt comparison would be to compare professional bloggers to professional actors. Hundreds show up at a cattle call for a single part; and most parts don't pay very well. The percentage of people who manage to make any money doing it is very small; the percentage of them who make their living is also small; and the percentage of those who get rich doing it is microscopic.

I blog because it is interesting to me at times. I'm never going to make any money doing this and I'll probably never be regularly read by anyone other than Google's search engine and myself.

You should blog because you are interested in something or passionate about something. But just having those credentials is no guarantee that you'll be able to make a living doing it.


(*) = so coined by Pension Plan Puppets during Toronto Star Gate. And yes, I'm under no delusion that I would fall into any other category for any of my blogs.

(**) = One of my wife's writing magazines had this tidbit in it on blogging: only the top 10% of blogs make any money. And the average annual revenue for that 10% is $19K. And keep in mind that the income from blogs does not scale linearly with the increase in popularity through that 10%.