How to make pots of money from blogging

… or die trying.

So you want to know how to make big moolah from blogging?

Don’t we just love it when mainstream media journalists take such rose-tinted views of the Internet, fanning the flames of web opportunity?

The moths of the dotcom era appear to be all aflutter again.

Let’s drop all reasoning and talk money. Big money.

The Sept 1, 2006 Business 2.0 issue ran a story entitled “Blogging For Dollars”.

Here is the short list of the Blogillionaires:

1.Michael Arrington, Techcrunch: US$60,000 revs a month.
2.Four-person Boing Boing: US$1mil revs in 2006.
3.Nick Denton, Gawker Media, 11 blogs: US$3mil revs in 2006.
4.Jason Calacanis, sold Weblogs Inc, 85 blogs, to AOL in ‘05: US$25 million.
5.Drew Curtis, Fark.com: $600,000 to $800,000 revs monthly soon.
6.Brian Sugar, PopSugar: Projects US$15mil in revs in 2008 and US$40mil in 2009.
7.Rafat Ali, PaidContent.org: US$1mil in revs in 2006.

No kidding? They make that much money? Hey! Must be some truth to this, you say.

Even Business 2.0 editor Josh Quittner went on record to lend credence to the idea.

He says when staffer Om Malik decided to leave the Time Inc publication to focus on his popular tech blog GigaOM, Quittner did some “soul searching” and came up with the idea of getting every staff to blog.

Drill deeper down the story to discover these nuggets:

IWantMedia.com: Can you give me an idea of the remuneration for the traffic?

Quittner: Well, to start, if your blog gets a 100,000 page views in a day, that would probably give you a couple of hundred bucks. No, you’re not going to retire on it. The Business 2.0 blog has been around for two years, and it gets about 40,000 visits a week.

But if the arrangement with CNNMoney goes through, one good link from CNNMoney could give one of our bloggers something like 200,000 page views in a single day.

IWM: Any final words on blogging?

Quittner: I have really smart, aggressive people here. These blogs should be able to capitalize on their enthusiasm. Still, the amount of money we’re putting into this experiment is negligible. At the very least, my people will learn how to do a blog at a fairly intensive level.

The worst that happens is it’s a failure. No big deal. I’ve lived through gazillions of failures, and I hope to live through gazillions more.

I am not a negative kind of guy. I have no doubts that the bloggers mentioned are making the kind of money they make. My scepticism on the Business 2.0 article is how easy the writers make it all sound.

New York Magazine ran a story entitled Blogs to Riches in a similar vein in its February 20, 2006 issue, but added this damper:

When (Clay) Shirky compiled his analysis of links, he saw that the smaller bloggers’ fears were perfectly correct: There is enormous inequity in the system. A very small number of blogs enjoy hundreds and hundreds of inbound links—the A-list, as it were. But almost all others have very few sites pointing to them. When Shirky sorted the 433 blogs from most linked to least linked and lined them up on a chart, the curve began up high, with the lucky few. But then it quickly fell into a steep dive, flattening off into the distance, where the vast majority of ignored blogs reside. The A-list is teensy, the B-list is bigger, and the C-list is simply massive. In the blogosphere, the biggest audiences—and the advertising revenue they bring—go to a small, elite few. Most bloggers toil in total obscurity.

My two-cents worth if you believe that blogging will make you money:

1.GET OTHER PEOPLE’S CASH EVEN BEFORE YOU START: There’s nothing like getting some money in the bank before you even begin a business. Find an angel investor or VC with deep pockets and put a powerpoint together and sell them on the idea of a blog first. Otherwise, get some buy-in from at least two or more advertisers. Better still, hook up with an existing publisher who wants to experiment with blogging. That way, you get regular income and when it starts to take off, make sure the fineprint was fuzzy to begin with. (Subscription model, you say? Two words: Forget it!)

2.EXPECT TO WORK HARD: None of these bloggers had it easy. They gave up their regular jobs and were on blogging call 24 by 7. This isn’t a passive income mate, it’s an active fulltime job for which no one is paying you yet. You can’t do it part-time, or grow it in the moonlight. You’re a one-man show doing all your own content, researching, designing, writing, deep-linking, branding, marketing, GoogleAdWords campaigning, and sales and you better believe that it’s hard work. Ignoring the laundry, regular meals, pets and all human contact on a daily basis will be the norm. If can’t write daily now, think how it will be blogging hourly for 18-hour stretches?

3.NICHE-ING AND THE LONG TAIL: The A-list focuses on politics, boytoys (gadgets, cars,etc) and celebrity gossip. Let’s not even consider the XXX-list. You don’t want to play there. Look for a niche that you may already have a foot or whole leg in, or maybe a grapevine you can suck on. Think local if there are low-hanging fruits of info to pluck everyday, think global if you’ve chosen an area that has commercial value that is only just being realized. Think of a wave you can ride on using blogging as a new conversation space. Read Chris Anderson’s Long Tail

4.SCALABILITY: How long can you do this before you a) run out of funds b)lose your family, friends, dog, all human civility c) grow ten-inch nails d) go insane e) all of the above? Can someone steal all your content tomorrow and take off leaving you in the dust? Can the website sustain your interest (let alone hundreds of thousands of other unique visitors) five years down the road? Can you drive this sucker for the longhaul? Can you live, eat, breathe and sniff this puppy everyday until it transforms into a ravishing Best-In-Breed, Show-Winning Bitch? Don’t scrimp on the dogfood and crappy kennel either – get a real, mother-loading, hack-free webserver that can pump out those blogposts like a multi-barrelledGaussian gun.

5.GET VISUAL: Vlogs are all the rage. But can you do one everyday? Or will it pop off like a rocketboomlet? Dip into a 1000-a-day stock photo site and pay for it dammit. Have visuals ready for your reading-impaired netheads. Unless you have Wall Street Journal-like cutting edge tips that stockmavens, and other motley fools will pay for — which is as rare as that paper is starting to become — get those visual carrots ready.

6.BE AD-SAVVY: Think Google AdSense, AdBrite, Federated Media, and get with the programme.

Long tail solutions for the real world

Two articles struck me this week on how to make a difference in the world. Technology Review’s Young Innovator Awards has the story of the simple cooking stove that is changing lives in Dafur and CK Prahalad mentions three great examples in Strategy + Business, on what he calls the Innovation Sandbox.
[from Technology Review]

Lawrence Berkeley researcher Christina Galitsky, 33, wanted to find more immediate ways to help the world’s poor. At a Berkeley meeting of Engineers for a Sustainable World, she met Ashok Gadgil, a senior scientist at Berkeley Lab who had interests similar to her’s. Together, they began to look at crises in Darfur and in Bangladesh.

The problem they identified in Darfur is simple, and gruesome.

More than 1.6 million citizens of this Sudanese region have been displaced by civil war, with hundreds of thousands crammed into refugee camps.

They have to eat, and to eat they have to cook, and to cook they need firewood, but they have already stripped the areas around their camps bare.

Local women must wander for hours outside the relative safety of the camps to gather wood. This leaves them vulnerable, and international observers have documented an epidemic of rape by roving gangs.

NGOs have suggested better cooking tools could reduce the need for firewood. While there have been a ton of competing ideas–everything from clay ovens to solar cookers– none of them had been tested in Darfur with any rigor. So Galitsky and Gadgil went to Darfur, partnering with aid group CHF International.

Traditionally, Sudanese women balance their cooking pots on three stones over a wood fire but lots of heat escapes.

As a better option, Galitsky and Gadgil looked to a simple metal stove designed in the 1980s by the Indian nonprofit organization Development Alternatives.

Galitsky held a demonstration in Darfur–before a large crowd, she set up the traditional three stones, the metal stove, and a mud stove popular with many aid groups.

A handful of community leaders chopped wood and stacked it into 250-gram piles.

Then Galitsky cooked three separate meals, so the women could see how much wood each stove used. “The stone fire used ten piles, the mud stove used nine, and the metal one used only four or five,” she recalls.

Despite the metal stoves performance, the researchers knew it would need modifications to fit life in Darfur. So Galitsky interviewed dozens of women about their lives and their cooking duties.

She determined that the stove would need a windshield, to control the gusts that whip through the camps, and stakes for stability when the women stir their assida, a sticky dough that makes up most meals.


She and Gadgil also need to make sure the stove can be manufactured quickly and cheaply. But the technology shows promise. “We are very excited,” says Maha Muna of the United Nations Population Fund in Sudan. “The U.N. and [aid groups] have funded so many projects on fuel-efficient stoves as pilots, but CHF and Berkeley Lab are actually carrying out the analysis we need to be able to determine what should be replicated.” The Berkeley researchers plan to begin delivering test stoves to refugee families this fall; they hope to produce 300,000 by next year.

In Bangladesh the problem isn’t food; its drinking water. In the 1970s, Unicef dug wells all across the country so that Bangladeshis could stop drinking contaminated surface water.

The aid groups motives were pure, but the wells were not. Most were in areas with high concentrations of arsenic–in some cases, more than 100 times the level the World Health Organization has deemed safe. “It has been called potentially the largest mass poisoning in the history of the world,” Galitsky says.

Recently, the US lowered its own limit on arsenic in drinking water by 80 percent, and states are interested in new technologies to meet the tougher standard–interested, and putting up money.

Gadgil and Galitsky saw an opportunity. With a $250,000 grant from the California Energy Commission and $100,000 from the American Waterworks Association Research Foundation, they are developing a filtration system that could work both here and abroad.

Arsenic is easy to filter at a big water-treatment facility, but engineers can’t scale existing technologies down enough to serve individual families, or make them cheap enough for the poor world.

Gadgil had an idea. Iron particles act like arsenic magnets, bonding tightly to the arsenic for easy disposal; but a filter made of pure iron powder would be prohibitively expensive. Layering a thin coat of iron onto waste ash from coal-fired power plants, however, would offer similar arsenic–attracting surface area at a fraction of the cost.

Getting the ash and the iron to stick together turned out to be a challenge. But after a dozen failed attempts, Galitsky and Gadgil came upon the solution: washing the iron-coated ash particles with lye and letting them get good and rusty.

The result, which looks something like dark curry powder, will capture nearly all the arsenic in a beaker of contaminated water. The researchers still need to figure out how water should pass through their hybrid ash-and-iron substrate, and what real-world conditions might interfere with its performance. But they believe filters made with their new medium could be effective enough to meet stringent safety standards yet still affordable enough to sell to Bangladeshi households.

With Galitsky and Gadgil’s method, a family could filter a years worth of water for less than about $2; it would cost at least $58 with today’s cheapest comparable technology. Galitsky talks about all her research with a real sense of urgency, and not just because people and the environment are suffering. For the problems she is addressing, big gains are tantalizingly close, and the rewards will be great–for the poor communities this kind of science can help, and for Galitsky as well.

“I felt so helpless,” she says. “And I still feel helpless. But at least now I’m doing something.”

MORE.
Another story.

Consultant and author CK Prahalad speaks about healthcare solutions to serve the bottom-of-the-pyramid.His three examples are: the Jaipur Foot, a low-cost prosthetic, the Aravind Eye Care system, the world’s largest provider of cataract surgery and Narayana Hrudayalaya cardiac care center, located in Bangalore, one of the world’s largest providers of heart surgery.

He suggests the process for designing breakthrough innovations starts with the identification of four conditions — all of which are difficult to realize, even when taken one at a time:
*The innovation must result in a product or service of world-class quality.
*The innovation must achieve a significant price reduction — at least 90 percent off the cost of a comparable product or service in the West.
*The innovation must be scalable: It must be able to be produced, marketed, and used in many locales and circumstances.
*The innovation must be affordable at the bottom of the economic pyramid, reaching people with the lowest levels of income in any given society.

MORE.

Curley: No longer in Kansas

Finally a story on new media guru Rob Curley in Fast Company.

“He’s clearly an icon in the industry, partly based on what he’s done and partly based on his personality,” says Randy Bennett, vice president of audience and new business development at the Newspaper Association of America. “There’s so much gloom and doom that gets bounced around this industry, people are hungry for his wild-eyed optimism. They look at what he’s done and say, ‘Wow, who knew a newspaper could do this?’”

Curley–”just a nerd from Kansas,” as he puts it–hasn’t won a Pulitzer or worked at a major daily. But since teaching himself to build Web sites 10 years ago, he appears to have figured out what most newspapers haven’t: how to do the Internet right. He calls it “hyperlocal” multimedia journalism, and his news and entertainment sites are sucking in audiences, advertisers, and revenue; they’re racking up national and international awards; and, most important, they’ve begun delivering profits….

MORE.

Choice quotes

“Content is still king, but the monarchy has been overthrown. YouTube, MySpace, iTunes — it’s the invasion of the pronouns in a world all about me. The consumer-led republic is replacing the monarchy of major media. Consumers are in more control than ever. What’s changing is the very definition of the consumer. Increasingly, consumers might be called small media — just about anyone can now create and deliver content,” Beth Comstock, NBC Universal’s president-digital media and market development.

She said NBC Universal needed to “create the best, most innovative content, get used to sharing control, tap the power of the community, develop a keen understanding of constantly changing consumer behavior and, finally get used to the idea that the media marketplace from now on is going to be full of contradictions and tensions.”

One of those principles is a topic high on every media executives’ agenda these days: consumer behavior. “When I took this job a year ago, I assumed that few people would go home at night, and curl up on the sofa with a portable video device to watch a 22-minute program. But then iTunes video entered the market. And we started doing research. We discovered that 68% of iPod video owners were using the device inside their home, not on the road.”

NBC kept hearing about the guy who took his iPod to bed to watch his show while his wife watched the TV, or about the guy who watched basketball on the couch while his wife watched video clips on her cellphone. [from AdAge.com]

“Industry analysts predict that mobile television could be a global market worth as much as $27 billion by 2010.,” said Anne Sweeney, Co-chair of Disney Media Networks and president of Disney-ABC TV. “We now understand that piracy is a business model. It exists to serve a need in the market — specifically consumers who want TV content on demand. And piracy competes for consumers the same way we do — through quality, price and availability.”

Disney has deals with Vodafone Italy and Orange Mobile in the U.K. and has just finalized a deal via France Telecom’s Orange service. Disney distributes the ABC hit “Lost” to 3.2 million mobile-phone customers in the U.K., and plans to bring the network’s “Desperate Housewives” to 24 million Vodafone Italy subscribers. The company is also creating a new mobile product around a series of video diaries by the characters of “Lost.”

In looking for new-media ventures, Ms. Sweeney said, “We want partners who believe in their own products and services enough to market them aggressively instead of relying on our content to drive their sales.”

Ms. Sweeney also revealed that ABC.com’s latest program-streaming initiative had garnered 2.5 million requests for shows in the past two weeks. That’s compared to 5.7 million requests for episodes over a two-month test period in the spring, when ABC first began to stream its top shows online. The new initiative is supported by a range of advertisers including Toyota. “Grey’s Anatomy,” “Lost” and new shows such as “Six Degrees” and “The Nine” are available online after the shows have completed their traditional broadcasts.

Outside the U.S., Disney also has a similar venture in Germany, where viewers can watch shows online via an IPTV entertainment portal called “Maxdome” operated by broadcaster ProSiebenSat.1 and has licensed studio content to wireless-content firm TU Media, based in South Korea. The South Korean market is one of the most advanced in the world for cellphone technology. TU Media now streams 250 hours of Disney programming to its wireless-phone customers. [from AdAge.com]

On the YouTube buy. “Well, on the money side, it’s easy because we have what we think is the world’s best advertising system and we can take that advertising and use that over time to build quite a business off all of the things the users are doing on YouTube,” said Eric Schmidt, CEO, Google.

“The real reason, however, was not the money, and not even the advertising, it was because we believe that video is going to be, and is sort of already, one of the most important new media types on the internet.

“More and more people are going to be doing videos of one kind or another to communicate ideas, sell their product, record their memories, and ultimately a lot of the existing broadcast world that we’re so used to will become available on the internet.

“All of the media companies are dealing with dramatic changes in their business. So what we’re trying to do with all of these partners is to say, ‘if you work with us we can combine our advertising platform and your content with a much larger audience.’ So far people like that message, they are now trying to figure out what to do about it – should they, should they not, under what terms, and those sort of things.” [From FT.com]

“YouTube is less a video-sharing site than it is a social networking site based around video. The company gets its content for free and has built a profitable business from acting as a video portal. In the strictest sense this isn’t Web 2.0 at all and actually harkens back to Web 1.0 applications like the Motley Fool,” said Robert X Cringely, PBS’s I, Cringely.

“So is YouTube the future of television or isn’t it?

“The answer to this question has to be based more on how WE use the medium rather than on how it uses us. I don’t think YouTube as it exists today is even remotely the future of television, because if it is then television is in huge trouble.

“Where are the folks who watch YouTube six hours per day? They exist, I’m sure, but there was a time when Americans watched television an AVERAGE of six hours per day, which is more than YouTube will ever know. YouTube gets stale for me after about 20 minutes, which hardly makes it the next Seinfeld.

“If YouTube has 100 million video downloads per day and if those downloaded videos average 2.5 minutes in length as PaidContent suggests, then the average daily YouTube audience consumes 250 million minutes or less than ONE MINUTE OF VIDEO PER U.S. RESIDENT PER DAY. That’s a lifestyle change, true, but not a big one, nor is it even guaranteed to be permanent.

“The whole television viewer experience has always been based on two factors: immediacy and production values. TV brought us live events we could share as a nation. YouTube can’t do that. TV brought us production values beyond what we could afford as individuals. YouTube doesn’t do that unless it is by ripping off copyrighted content.

“Its evident profitability is how YouTube is now able to cut revenue-sharing deals with record companies and TV networks. There has to be revenue to share for revenue sharing to work. But if you look closely at those deals, they also involve the prospect of original YouTube-only content from partners like CBS.

“Is CBS going to put $1 million per hour into its YouTube content? I don’t think so. CBS is going to throw on YouTube all its old pilots and episodes it had previously written off — content that costs it absolutely nothing because it was paid for long ago out of a different budget.

“YouTube is the factory outlet of commercial television, at least for now.” [From I, Cringely]

Going Hyper-local

“Go local” is the new mantra of the web 2.0 leaders. Yahoo, Amazon and Google seem set on trying to make as much money in this overlooked space as possible. The idea is if you provide enough maps and such services to the smalltowns of America, they may just bite.

Others have turned the idea on its head by starting local and going national. Sounds unscalable but sites such as Backfence and YourHub are growing. These sites appear on the same track as sites like Judy’s Book and CraigsList where classifieds take on a more human interface.

The most recent entry is Smalltown.com which has received US$3 million in venturecap to creat multi-town site beginning with San Mateo and Burlingame.

Users create a “Webcard” to post and share their wares, services, events, etc. and can pay for an “enhanced card” for a monthly $40 listing fee.

Webcards can be combined to form a “card stack” of information, akin to a file of resources that one might create using index cards and a filing box.

The dream of course is have millions of these webcards of every little service in every little smalltown in America.

Sounds fishy to me. Doesn’t webcard = webpage and if these small businesses were not using the web in the first place, why would they need them now?

In pre-dotcom bust days, the same hype/hope drove thousands to create the space where users would generate the content and the “real-estate” owners would just charge for advertising and reel in the money.

The only difference now is the Flash user interface which — considering its target audience — will be annoying to older audiences it hopes to attract.

Crappy videos – who wants them?

Tom Green sheds some light on the Rise of Flash Video.

With Google paying out US$1.65 billion for Youtube one wonders whether this signals the end of older formats such as Real, Windows Media and Quicktime.

I think it seems too premature to argue that the format wars are over. In fact, it may have just started. Video is not only about content. Or the speed with which it loads up — although that has always been a consideration, for which Youtube has gained traction.

But as users the frustrations have not chnaged. Who wants a two by two screen of great video that pixelates the minute you go fullscreen? How do we get the high-quality video we want at the crappy speeds our service provider provides? And more importantly, how do I upload all these videos and get paid for it?

The advent of coursecasting

[ via Cnet/Reuters]

The University of California at Berkeley said Tuesday that it is using Google Video to deliver college courses, including lectures and symposia, free of charge.

The university has put up a library of more than 250 hours of video for public viewing on this featured page.

“Coursecasting” is a growing trend in educational technology, enabling students and the general public to download audio and video recordings of class lectures to their computers and portable media devices.

MORE.

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