Nov 01 2007
Headlines and Headcount
The SF Chronicle — a newspaper that has long been rumored to be suffering from the myriad challenges facing the newspaper industry — weighs in with a close look at blogger economics. Business reporter Sam Zuckerman zooms in most closely on TechCrunch, the Silicon Valley-based tech blog that most industry watchers regard as the bellwether for commercial blogs.
TechCrunch illustrates the new blogging math. It sells sponsorships that allow advertisers to display on the home page at $10,000 per month. It also uses Federated Media to sell display ads, keeping 60 percent of the revenue. And it charges $200 to list in its Cool Jobs section, getting about five or six want ads per day. Parties and conferences add another income source. Last month, TechCrunch organized a two-day event at the Palace Hotel that gave 40 startups a platform to tout their wares.
And, as far as spending goes, “our costs are only headcount,” Arrington said.
Let’s assume that newspapers need to study blogger economics in order to get ahead, or even keep up (btw, that’s a big assumption, because despite the success of TechCrunch, GigaOm, and other popular commercial blogs, the top line is not there for many others). One lesson for newspapers has got to be depressing: the overhead of running a commercial publishing enterprise has plummeted to a level where almost anyone can jump in. But note that Michael Arrington and others are spending on “headcount.” By that, of course, he means writers, and that’s not-so-bad news for journalists. The new publishing world continues to drive the demand for good content. Only question is, who’s hiring?
I was talking to an Inquirer business reporter at a LinkedIn meetup that was being held recently at the Inquirer’s offices. He made the observation that he didn’t understand blogs because the economics of them just didn’t make sense. There were two things that struck me about his comment. First, his major complaint about blogs was about the economics of them, which makes sense given that he was a business writer who is no doubt interested in his own business. Second, he was really very passionate about this — it wasn’t a passing comment, it was something he felt very deeply.
He has a point. There may be lots of opportunities to write for blogs, but I’m sure that writing for a newspaper pays a lot better. Newspapers also have more respect for good writing and good research, or at least they used to.
On the other hand, I don’t know if you can judge “the economics” of blogs purely as a vehicle for advertising. Does this blog, for example, generate any direct revenue? (Not that I can see, unless your blogroll is pay-to-play.) Most blogs are not meant to make money. They are meant to start a conversation with a specific audience. Or maybe they’re just meant to howl at the moon.
Hi Oliver, as I stated in the post, the need to study blogger economics in order for newspapers to get a head or keep up was a big assumption. But, the point of the post was to call attention to the fact that some commercial blogs are making money and are now capable of being compared from an economic perspective. While its not the definitive comparrison it does enable comparrison.
I will disagree with you that newspapers have more respect for “good writing and good research” than blogs. There are plenty of examples (good and bad) in both mediums. Another interesting tidbit is that according to Technorati’s most recent “State of the Live Web” (slides are Q4 2006) 22 of the top 100 online sites are blogs. If print is declining and if blogs (commercial) are replacing traditional online media properties in the top 100 online sites — there is likely an economic model that goes along with it.
This blog is not a commerical entity and I certainly don’t have a pay-to-play blogroll. TechCrunch is a business and one with which advertising is a key economic contributor to its financial success. As for making an economic comparison between a commercial blog like TechCrunch and a personal blog like mine — I don’t follow your logic.