April 11, 2006

Sorry, Rev Share Still Blows

Good post over at Wurk.

I can't agree with it, but sometimes disagreements like this come down to apples and oranges (i.e., if their goals are different than mine, a direct comparison is silly)

I think this quote sums up rev-share:

The result: virtually no financial risk to anyone.

At this point an investing maxim comes to mind. Return is proportional to risk.

So, yes, I agree that rev-share reduces your risk. It also greatly reduces your chance of making an 'above-average' return.

If the blog network succeeds, great, but on rev-share, your writers get most of the profits (did I read 75% over on that thread??). If the blog network fails, meh, who cares, the writers take all the losses.

Rev share, for a blog network owner, is like smoking Camel Filters. (Sorry, Jay)

When my network fails, I take ALL the losses. And if (when) it makes 200k a year, I take ALL the profits. (I = me and Mr. McIver)

In the niche content business, I would hazard a guess that anything above a 100% return on a content investment could qualify as "good". (My older content business gets around 3-400% return on content investments).

Of course, you have to value your time at something. Quick check: Everyone's blog who "made" $300 last month, how many hours did you put in? Let's call it 30. So, there  wasn't really a "profit". You just got to blog about something you enjoy for $10 an hour. Not a bad gig by any means. But please, don't confuse it with "profit".

We're in this to make money. And yeah, rev-share still blows*. (If you're not in this mainly to make money, your mileage may vary)

* it sucks, too!

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April 11, 2006 in Business Issues | Permalink


Comments

So, yes, I agree that rev-share reduces your risk. It also greatly reduces your chance of making an 'above-average' return.

Yep, but ONLY when ppc/ppm advertising is your sole revenue generator.

Posted by: barry bell | Apr 11, 2006 11:46:40 PM

The 75% number is not raw. The model requires a core of cash cow blogs authored in-house to fund the early bonuses necessary in the first year. When the whole network is profitable, you switch to a fixed fee contract for new bloggers coming in. The original 75% people will do well, but then they will have stuck it out and will have deserved it.Overall, though, and over time, the payout is much less than 75% of revenue.

Posted by: John Evans (Syntagma) | Apr 12, 2006 12:52:18 AM

Another way to look at it is that 75% of a blog that does well is potentially a very good payout for a writer.

OK, the network owner is only pulling 25% per blog, but on a sizeable network, you're looking at lots and lots of 25%'s.

It's not a fortune, but the writers stay on your side, right. They're not grumbling about getting a pissy $5 for that hour they've just spent researching and writing for you. And they're not trying to snake you by writing an extra 50 crappy posts a month for $250.

It's still profitable, and you don't have all the 'us & them' headaches that happen in workplaces the world over.

The wurk ad rev model isn't quite as high as 75%, though. Just gotta clear that up.

But yep, it depends on your goals. If all you're doing is gaming the search engines within high paying PPC niches, then the quality of your copy isn't quite as important as if you were trying to develop a trusted voice or resource within your niche. Therefore, you can get away with higher margins. You lose a little credibility in terms of ethics, and you're not really providing much of a service to anyone in the long term, but then that's not your business model.

I'm not knocking the pay per post model, but I seriously question the level of quality, commitment, consistency, or even job satisfaction you get for such a low amount.

Posted by: Barry Bell | Apr 12, 2006 1:51:52 AM

Fair enough, Barry :-)

The good news is there's room for all of us...

Posted by: Andy H | Apr 12, 2006 5:34:01 AM

Definitely.

B

Posted by: Barry Bell | Apr 12, 2006 8:49:07 AM

As a writer, I have 3 choices:

(1) Write for print, where I might get a one-time payment of US$800-1200 for a feature computer programming article, or US$0.01-1.00/ word for some short fiction.

(2) Write for blogs/websites, where I might get $4-20 for a post. Or a revenue share.

(3) Publish my own blog and dream that I'll one day grow up to be Darren Rowse.

As a publisher, I gave up on print. I didn't have the capital. As an online publisher, I have 3 choices:

(1) Pay per post, which I can't afford to do.
(2) Pay revenue share, which I might be able to pull off but would never become Rupert Murdoch on.
(3) Publish my own blogs, with my own content that I toil to write, and dream that I'll one day grow up to be Darren Rowse.

As an old-school, do-it-yourself, bootstrapping punk, I'm going to choose option #3 in both cases, with a little mix of writing posts for others to supplement my earnings. But I'm of the "sacrifice what you have to to make it" vein. Like writers of old, I'm scraping by on a part-time real job, doing the occasional contract when I don't have to compete with anyone who'll do it for the equivalent of $15/hr, and writing as much as possible. Because when I do finally become as successful as Darren is now (before the network), the glory will be all my own, and I'll have done it with my own content - which is more important to me than to most network owners. But then, my agenda is different I suppose than both Andy and Barry :)

Posted by: raj | Apr 17, 2006 11:47:09 AM

Wow Raj! I like your spirit. I don't have the guts. After 1 week of looking at the traffic on my own blog, I gave up on it. That was 2 years ago. And while I write for "other people's" blogs, I would vote for rev-share anyday (just as any other writer would!).

Posted by: Mini | Apr 19, 2006 1:41:58 PM

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