Why write without pay? Intro to freeconomics

Many writers, especially professional ones, balk at blogging and social-network updates. "I get paid to wordsmith," the logic runs. "Who will buy the cow if I give away the milk for free?"

First off, blogging can pay – and well. The genre's already produced millionaire-bloggers like Markus Frind, Kato Leonard, Jason Calacanis and others. Rafat Ali is another classic example. The laid-off dotcom reporter launched PaidContent, a newsletter about the business of online media. In 2002, his first year, he netted somewhere between $60-80,000, as this Wired News article explains. He later sold the site to ContentNext Media, a subset of the Guardian News and Media Ltd group, and still serves as editor in chief.

Ironically, Ali's subject is subject to intense debate right now. People are accustomed to free stuff over the innertubes. Subscription attempts – hiding material behind a paywall – tend to end badly. In 2007 The New York Times unlocked its archives; last year, so did much of The Wall Street Journal.

As Chris Anderson points out in Free! Why $0.00 Is the Future of Business, "Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411."

"Freeconomics," he calls this "race to the bottom".

(Embarrassingly, The Virginia Quarterly caught Anderson "borrowing" too liberally from Wikipedia. He claims this was a cut-and-paste error. Still, watch your sources: Don't be a slapdash author like him. As we've nagged before, Wikipedia is a great place to start research and a lousy place to end it. Also, don't be a pirate: t'isn't polite...)

Until ad revenue reaches sustainable levels online, the mainstream media's gonna panic and holler about all this. Here and here you can observe experts crunching numbers for different scenarios for newsrooms.

Angered by shrinking distributions and ad revenue, media mogul Rupert Murdoch might just take all his toys and go home. "Should we be allowing Google to steal all our copyrights?" he challenged his peers, before threatening to remove all News Corp. content from the search engine. As both Mashable and The Guardian Media pointed out, this quixotic announcement in November 2009 didn't make the intended big waves. The Independent gives a great breakdown of this drama and its possible end-game – saving newspapers – here. (We'll discuss pay models
and the future of media further throughout the class.)

The Associated Press (AP) took on content aggregators in a radical effort to, well, make some money off the net already. Also, newsgathers want to make sure they get credit where credit's due.

“This is not about defining fair use,” said Sue Cross, executive vice president of the group. “There’s a bigger economic issue at stake here that we’re trying to tackle.”

One goal of the AP and its members, she said, is to make sure that the top search engine results for news are “the original source or the most authoritative source,” not a site that copied or paraphrased the work of news organization.

Europe's ahead of the US on the protection front, but one thing's certain: regardless of geography, hard news from reliable sources remains a key ingredient in cyberspace. The AP's just moving aggressively to protect its interests, which could be a good thing, however initially aggravating.

Much as the blogosphere wants to be bleeding-edge, it lags 2.5 hours behind the main-stream media (MSM) still. And studies show that only 3.5% of blog story lines become headlines. But, as The New York Times points out: "Though the blogosphere as a whole lags behind, a relative handful of blog sites are the quickest to pick up on things that later gain wide attention on the Web, led by Hot Air and Talking Points Memo."

For now, no absolute formulas exist for making money online. Heck, YouTube stood to lose $470 million in 2009, despite dominating the online-video market (luckily it's part of the Google family, which can take a hit like that. See the mothership's rebuttal of "hideous loss" predictions...). And microblogging wunderkind Twitter isn't even sure how to bring in the seriously big bucks, though the company's on its way. The site's grown so popular that people are offering up $250,000 for as-yet-unavailable “spotlighted” accounts. Celebrities like 50 Cent and Britney Spears have hired ghostwriters to pen their 140-word tweets, according to The New York Times. Surely someone will cash in on all this sturm und drang soon.

Why not get yourself a slice of that cake?