The Economic Science Of Blogging, Together With The Challenges For Traditional Media & Content Creators
November 30, 2017
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I started this spider web log nine months ago, too receive got since published thirty articles (excluding this post). On average, each article takes me nigh 4 hours to make - typically nigh 1 hr to boom out my thoughts inwards 1 travel (in an occasional outburst of writer's inspiration), too so nigh 3 hours to iteratively re-read too edit the text (it is amazing how many times this must live on done to withdraw typos too ensure the text flows smoothly too logically from 1 dot to the adjacent - every bit a full general rule, the easier something is to read, the harder it is to write).
This agency that I receive got spent a total of or so 120 hours producing spider web log content over the past times nine months - nigh 3 weeks worth of operate at the conventional 40/hr calendar week benchmark, too mayhap closer to 4 if typical breaks too vacation pay entitlements were included (and v if you're French).
The total cumulative pageviews over the past times nine months has been or so 8,000. I do non bother using AdSense, but if I did, I empathise that the CPM (cost per M impressions) advertizing monetisation charge per unit of measurement would live on unlikely to laissez passer on nigh US$2. Consequently, if I was attempting to brand coin blogging (fortunately I am not), my total revenues to engagement are unlikely to receive got exceeded US$16. This represents an hourly charge per unit of measurement of nigh US$0.13/hour - nigh 2 orders of magnitude brusque of what would live on required to earn an guess minimum-wage income.
8,000 views implies that each 1 of my articles is currently getting a lilliputian chip to a greater extent than than 250 views. This issue would involve to rising past times 2 orders of magnitude to 25,000 inwards society to generate a minimum wage income from banner advertising, too 250,000 to generate a competitive income to other potential remunerative uses of my fourth dimension (when I worked every bit a paid securities analyst, my hourly compensation averaged nigh US$150 per hr worked, inwards my estimation). Both are exceedingly unlikely prospects (I volition live on absolutely thrilled if I eventually attain a 1 society of magnitude improvement to 2,500 views per ship - fifty-fifty that volition probable require several years of committed effort).
Furthermore, the to a higher identify includes alone the fourth dimension committed to genuinely writing. I personally pass an average of 10-12hrs a day, vi to vii days a week, reading too synthesising information. I read books; the intelligence media; equity research; corporate filings; other blogs; industry/country reports; hedge fund performance reports too other literature; textbooks; too psyche to podcasts too interviews, with other things. All this operate is necessary inwards society to generate the insights that prevarication behind the spider web log posts.
I receive got non included this fourth dimension inwards the to a higher identify calculus, every bit this is operate I would live on doing anyway every bit a total fourth dimension investor/portfolio manager, too I see blogging every bit exactly an occasional side project/hobby. However, were blogging my primary occupation, all of this background inquiry would involve to live on included inwards the hourly-rate computation every bit good (although I would make far to a greater extent than production if this was my total fourth dimension line of piece of work - likely nigh 5-7 spider web log entries a week). I operate an average of nigh lxxx hours a week, closed to 52 weeks a year, so inclusive of the fourth dimension committed to background research, my hourly charge per unit of measurement would average less than 1c.
The to a higher identify calculus highlights quite starkly that the economic science of blogging are lousy, fifty-fifty allowing for the inherent scalability of the endeavour (the amount of operate involved stays the same, no affair how many viewers y'all have). Even if my viewership goes upwards past times a ingredient of 100, the economic science volition remain poor. If y'all conception to start a spider web log for fiscal reasons, I would strongly advise against it, too advise y'all do non quit your hateful solar daytime job.
Personally, I was never nether whatever illusions that I would brand coin blogging, too I started this spider web log for other reasons - for fun, because I relish the arts and crafts too challenge of writing; too also every bit a potential longer-term networking/relationship evolution tool. If something similar the latter is your motivation, great, but if your motivation is to brand money, forget it! You are much amend off pursuing operate every bit a paid journalist.
The pathetic economic science of blogging highlights a challenge for traditional media
The difficulties making coin every bit a content creator on the cyberspace are far from confined to bloggers. The same is truthful of most (although non all) YouTube creators. The monetisation rates are so depression that the issue of views needed to generate a reasonable income is implausibly large for all but the most unique too successful creators. This is also earlier considering creators such every bit Wikipedia authors, where the prospect of monetisation was never a possibility inwards the showtime place.
However, despite this reality, millions of hours of un- or under-remunerated content continues to live on created every day, too at an accelerating charge per unit of measurement (300hrs of novel content is uploaded to YouTube every minute). Human beings, it would appear, receive got a seemingly incurable compulsion to live on creative, too to portion those creations with the world.
The outcome has been that the amount too diversity of free/near gratuitous content available online has (and continues) to mushroom. This is fantastic for the world, too every bit a copious consumer of such content myself, I retrieve it is wonderful (and 1 of my motivations for writing this spider web log is a feeling that I ought to give at to the lowest degree something dorsum to the world, given the tremendous grade to which I do goodness daily from other people's underpaid efforts). However, this tendency is rattling bad for traditional media, too indeed whatever form of paid media production.
People alone receive got 24 hours a hateful solar daytime at their disposal, too mayhap 17 hours on average mesh of requisite sleep. Inside those 17 hours, people receive got to fulfil their daily chores; commute; earn a living; exercise; pursue their hobbies; too pass fourth dimension with identify unit of measurement too friends, leaving a relatively express too finite issue of hours to eat content/media too other forms of entertainment.
Smartphones receive got expanded the 'attention market' inwards recent years - it is instantly possible to psyche to a podcast or autobook, banking venture check Facebook, or spotter a YouTube clip field walking, shopping, waiting inwards line, catching the bus/tube, or exercising at the gym, for instance, whereas inwards the past times these prospective content-consumption hours would receive got been 'wasted'. It is also instantly possible to do many of these things from your desk when y'all are supposed to live on working (one possible explanation for the confusingly depression measuring of worker productivity growth inwards the technological era inwards which nosotros live). However, the one-time boost inwards the size of the attending marketplace the rapid adoption of smartphones too 3G/4G wireless network rollouts has engendered has instantly been largely realised.**
What this agency is that the 'attention market' is inherently finite inwards size, too y'all do non involve a PhD inwards economic science to know what happens when render continues to rising inwards the confront of stagnant demand: the value goes down. What this agency is that the average value of novel too existing content ought to travel on autumn over time, too at an accelerating rate.
This is a challenge if y'all are a paid journalist (or a running a concern employing paid journalists) earning say, $50-100 an hour: the marketplace value of the halt journalistic production is probable to travel on to autumn every bit audience attending continues to fragment too decline, because this professionally-produced content increasingly needs to compete with a growing array of gratuitous or near-free content online, earning well-below-minimum-wage levels of compensation (such every bit this blog). It is hard to economically pay someone $50-100/hr when their halt production is competing with production that is free.
The outcome of this dynamic has already been long felt past times the impress media too FTA TV, too inwards recent years has also begun to live on felt past times cable networks every bit good (as broadband infrastructure has reached the dot where reliable too high-speed hard disk drive streaming is instantly feasible for large proportions of the population). However, the conventional see with media analysts has for a long fourth dimension been that field pre-existing film/TV distribution pipes volition endure (particularly satellite providers), practiced content volition handgrip or fifty-fifty increase its value.
However, this perspective ignores the fact that the amount of novel content creation vying for our attending continues to mushroom (and the amount of TV content existence produced at the minute is at tape highs every bit well), whereas our available media consumption hours remain finite. Simple economic science suggests that the value of the average slice of TV content hence ought to live on falling every bit well, too non exactly the value of the pipes - specially the value of libraries of former content, which many value investors I honour (such every bit Horizon Kinetics too Elevation Capital) receive got argued ought to underpin the value of these companies (I do non agree). These investors receive got been incorrect on the outlook for conventional networks such every bit Discovery, inwards my opinion, for this reason.
In addition, inwards time, it is possible that the effects volition start out to live on felt past times many new-media companies every bit well, which currently appear to investors to live on exempt from these forces. As noted, the rapid adoption of affordable 3G/4G-enabled smartphones globally has apace expanded the attending marketplace too been a huge boon for companies such every bit Facebook, but the bulk of this massive growth tailwind has instantly already played out too volition inevitably slow. Moving forward, the contest for our online/mobile/media attending volition travel an increasingly zero-sum game, too it could outcome inwards growth rates too profitability disappointing (Twitter is already feeling the effects, with stagnating users too user engagement, coupled with continuing GAAP bottom-line losses).
2bn people globally pass an average of 1 hr a hateful solar daytime on Facebook. That is a lot of attention, too it is why Facebook makes so much money. But at 40x earnings, 1 must inquire to what extent the society realistically has the mightiness to travel on to increase its portion of our attending over fourth dimension off such a high base of operations - specially given that it is an inevitability that novel too innovative online/mobile services too sources of amusement volition travel on to endlessly proliferate over time, vying for our eyeballs (although for now, Facebook is benefitting from existence the 'gateway' to diverse other sources of content; whether that perpetually remains the illustration remains to live on seen).
Comments too query welcome,
LT3000
*Touch typing, past times the way, was 1 of the best life skills I e'er learnt. The below speed essay indicates I type at a charge per unit of measurement of 72 words per infinitesimal with 98% accuracy. The mightiness to type at (close to) the speed of idea is essential to existence a highly productive author inwards my opinion.
https://www.livechatinc.com/typing-speed-test/#/
**The advent of Level 5 fully-autonomous vehicles inwards coming decades may outcome inwards some other one-time boost to the size of the attending market.
This agency that I receive got spent a total of or so 120 hours producing spider web log content over the past times nine months - nigh 3 weeks worth of operate at the conventional 40/hr calendar week benchmark, too mayhap closer to 4 if typical breaks too vacation pay entitlements were included (and v if you're French).
The total cumulative pageviews over the past times nine months has been or so 8,000. I do non bother using AdSense, but if I did, I empathise that the CPM (cost per M impressions) advertizing monetisation charge per unit of measurement would live on unlikely to laissez passer on nigh US$2. Consequently, if I was attempting to brand coin blogging (fortunately I am not), my total revenues to engagement are unlikely to receive got exceeded US$16. This represents an hourly charge per unit of measurement of nigh US$0.13/hour - nigh 2 orders of magnitude brusque of what would live on required to earn an guess minimum-wage income.
8,000 views implies that each 1 of my articles is currently getting a lilliputian chip to a greater extent than than 250 views. This issue would involve to rising past times 2 orders of magnitude to 25,000 inwards society to generate a minimum wage income from banner advertising, too 250,000 to generate a competitive income to other potential remunerative uses of my fourth dimension (when I worked every bit a paid securities analyst, my hourly compensation averaged nigh US$150 per hr worked, inwards my estimation). Both are exceedingly unlikely prospects (I volition live on absolutely thrilled if I eventually attain a 1 society of magnitude improvement to 2,500 views per ship - fifty-fifty that volition probable require several years of committed effort).
Furthermore, the to a higher identify includes alone the fourth dimension committed to genuinely writing. I personally pass an average of 10-12hrs a day, vi to vii days a week, reading too synthesising information. I read books; the intelligence media; equity research; corporate filings; other blogs; industry/country reports; hedge fund performance reports too other literature; textbooks; too psyche to podcasts too interviews, with other things. All this operate is necessary inwards society to generate the insights that prevarication behind the spider web log posts.
I receive got non included this fourth dimension inwards the to a higher identify calculus, every bit this is operate I would live on doing anyway every bit a total fourth dimension investor/portfolio manager, too I see blogging every bit exactly an occasional side project/hobby. However, were blogging my primary occupation, all of this background inquiry would involve to live on included inwards the hourly-rate computation every bit good (although I would make far to a greater extent than production if this was my total fourth dimension line of piece of work - likely nigh 5-7 spider web log entries a week). I operate an average of nigh lxxx hours a week, closed to 52 weeks a year, so inclusive of the fourth dimension committed to background research, my hourly charge per unit of measurement would average less than 1c.
The to a higher identify calculus highlights quite starkly that the economic science of blogging are lousy, fifty-fifty allowing for the inherent scalability of the endeavour (the amount of operate involved stays the same, no affair how many viewers y'all have). Even if my viewership goes upwards past times a ingredient of 100, the economic science volition remain poor. If y'all conception to start a spider web log for fiscal reasons, I would strongly advise against it, too advise y'all do non quit your hateful solar daytime job.
Personally, I was never nether whatever illusions that I would brand coin blogging, too I started this spider web log for other reasons - for fun, because I relish the arts and crafts too challenge of writing; too also every bit a potential longer-term networking/relationship evolution tool. If something similar the latter is your motivation, great, but if your motivation is to brand money, forget it! You are much amend off pursuing operate every bit a paid journalist.
The pathetic economic science of blogging highlights a challenge for traditional media
The difficulties making coin every bit a content creator on the cyberspace are far from confined to bloggers. The same is truthful of most (although non all) YouTube creators. The monetisation rates are so depression that the issue of views needed to generate a reasonable income is implausibly large for all but the most unique too successful creators. This is also earlier considering creators such every bit Wikipedia authors, where the prospect of monetisation was never a possibility inwards the showtime place.
However, despite this reality, millions of hours of un- or under-remunerated content continues to live on created every day, too at an accelerating charge per unit of measurement (300hrs of novel content is uploaded to YouTube every minute). Human beings, it would appear, receive got a seemingly incurable compulsion to live on creative, too to portion those creations with the world.
The outcome has been that the amount too diversity of free/near gratuitous content available online has (and continues) to mushroom. This is fantastic for the world, too every bit a copious consumer of such content myself, I retrieve it is wonderful (and 1 of my motivations for writing this spider web log is a feeling that I ought to give at to the lowest degree something dorsum to the world, given the tremendous grade to which I do goodness daily from other people's underpaid efforts). However, this tendency is rattling bad for traditional media, too indeed whatever form of paid media production.
People alone receive got 24 hours a hateful solar daytime at their disposal, too mayhap 17 hours on average mesh of requisite sleep. Inside those 17 hours, people receive got to fulfil their daily chores; commute; earn a living; exercise; pursue their hobbies; too pass fourth dimension with identify unit of measurement too friends, leaving a relatively express too finite issue of hours to eat content/media too other forms of entertainment.
Smartphones receive got expanded the 'attention market' inwards recent years - it is instantly possible to psyche to a podcast or autobook, banking venture check Facebook, or spotter a YouTube clip field walking, shopping, waiting inwards line, catching the bus/tube, or exercising at the gym, for instance, whereas inwards the past times these prospective content-consumption hours would receive got been 'wasted'. It is also instantly possible to do many of these things from your desk when y'all are supposed to live on working (one possible explanation for the confusingly depression measuring of worker productivity growth inwards the technological era inwards which nosotros live). However, the one-time boost inwards the size of the attending marketplace the rapid adoption of smartphones too 3G/4G wireless network rollouts has engendered has instantly been largely realised.**
What this agency is that the 'attention market' is inherently finite inwards size, too y'all do non involve a PhD inwards economic science to know what happens when render continues to rising inwards the confront of stagnant demand: the value goes down. What this agency is that the average value of novel too existing content ought to travel on autumn over time, too at an accelerating rate.
This is a challenge if y'all are a paid journalist (or a running a concern employing paid journalists) earning say, $50-100 an hour: the marketplace value of the halt journalistic production is probable to travel on to autumn every bit audience attending continues to fragment too decline, because this professionally-produced content increasingly needs to compete with a growing array of gratuitous or near-free content online, earning well-below-minimum-wage levels of compensation (such every bit this blog). It is hard to economically pay someone $50-100/hr when their halt production is competing with production that is free.
The outcome of this dynamic has already been long felt past times the impress media too FTA TV, too inwards recent years has also begun to live on felt past times cable networks every bit good (as broadband infrastructure has reached the dot where reliable too high-speed hard disk drive streaming is instantly feasible for large proportions of the population). However, the conventional see with media analysts has for a long fourth dimension been that field pre-existing film/TV distribution pipes volition endure (particularly satellite providers), practiced content volition handgrip or fifty-fifty increase its value.
However, this perspective ignores the fact that the amount of novel content creation vying for our attending continues to mushroom (and the amount of TV content existence produced at the minute is at tape highs every bit well), whereas our available media consumption hours remain finite. Simple economic science suggests that the value of the average slice of TV content hence ought to live on falling every bit well, too non exactly the value of the pipes - specially the value of libraries of former content, which many value investors I honour (such every bit Horizon Kinetics too Elevation Capital) receive got argued ought to underpin the value of these companies (I do non agree). These investors receive got been incorrect on the outlook for conventional networks such every bit Discovery, inwards my opinion, for this reason.
In addition, inwards time, it is possible that the effects volition start out to live on felt past times many new-media companies every bit well, which currently appear to investors to live on exempt from these forces. As noted, the rapid adoption of affordable 3G/4G-enabled smartphones globally has apace expanded the attending marketplace too been a huge boon for companies such every bit Facebook, but the bulk of this massive growth tailwind has instantly already played out too volition inevitably slow. Moving forward, the contest for our online/mobile/media attending volition travel an increasingly zero-sum game, too it could outcome inwards growth rates too profitability disappointing (Twitter is already feeling the effects, with stagnating users too user engagement, coupled with continuing GAAP bottom-line losses).
2bn people globally pass an average of 1 hr a hateful solar daytime on Facebook. That is a lot of attention, too it is why Facebook makes so much money. But at 40x earnings, 1 must inquire to what extent the society realistically has the mightiness to travel on to increase its portion of our attending over fourth dimension off such a high base of operations - specially given that it is an inevitability that novel too innovative online/mobile services too sources of amusement volition travel on to endlessly proliferate over time, vying for our eyeballs (although for now, Facebook is benefitting from existence the 'gateway' to diverse other sources of content; whether that perpetually remains the illustration remains to live on seen).
Comments too query welcome,
LT3000
*Touch typing, past times the way, was 1 of the best life skills I e'er learnt. The below speed essay indicates I type at a charge per unit of measurement of 72 words per infinitesimal with 98% accuracy. The mightiness to type at (close to) the speed of idea is essential to existence a highly productive author inwards my opinion.
https://www.livechatinc.com/typing-speed-test/#/
**The advent of Level 5 fully-autonomous vehicles inwards coming decades may outcome inwards some other one-time boost to the size of the attending market.