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Revenue sharing

by ThatBritGuy Sun Oct 22nd, 2006 at 05:54:25 PM EST

...Just some random thoughts about revenue sharing in a Scoop-like setting. These are more about the alleged ThatBritBlog project, which is still happening (or at least being thought about) quietly in the background, than anything that's happening here and now. But it's an interesting subject so some debate could be appropriate.

The background

Print media are in trouble, but to some extent haven't realised it yet. I'm not sure print is dead yet, but all it's going to take is better open-access broadband and lighter laptops, and we're going to see more and more people reading magazines and papers online, and fewer and fewer buying printed copies. This is already happening, and the trend is obvious.  

Some examples from life:

ArtReview announced last week that it's going digital, and in future will be available as an emailed PDF as well as a print edition.

One of the pro-audio magazines I write for occasionally has moved to a similar online distribution model, because as far as advertisers are concerned it reaches something like four times as many people as the print edition does. And production overheads are much lower.

At the same time as a move away from paper, the old impermeable membrane being official, edited and carefully controlled content and user-contributed content is blurring. Scoop sites are the most extreme examples of this. Single person blogs are another example, but to me they look more like a stage along the way to collaboration than something that's going to survive on its own without that collaborative angle.

Also at the same time, print is increasingly becoming integrated with video. Podcasts seem to be off in a world of their own somewhere, and there's a gap between audio content and text+youtube that seems to be there mostly for political and practical reasons. Whatever the explanation, there's still a move away from 'dead' print on paper, to interactive text+media content. Some of this is silly, some of it is excellent, and a lot of it is a lot more compelling than you'll find being produced by official content providers.

So - potentially, sites like ET and TBB have a very interesting future, because we're currently ahead of a wave that's likely to start breaking over the next few years as there's a generational shift away from broadcast (in the widest sense) media to collaborative media.

The problem

What does this mean for content production? The traditional model is based on revenue from advertising and subscriptions. If you look at Kos, even though the Kontent is collaborative, it's still the same model. Kos gets all of the money, pays some of it to hosting companies (printers) and possibly some to front pagers (do they get anything at all?) but in purely financial terms it's a huge machine that leverages (how I hate that word...) a community space and turns it into a cash cow.

Something about this seems less than entirely fair. While Kos does a good job given his stated aims, and no one is complaining about being suckered, it's still an operation that turns voluntary contributions into cash from subscriptions and ad revenue - and observant Kos followers will have noticed there's a lot more of the latter lately, including the famous Big Oil Chevron ad that pissed off so many people.

The real problem is - is it possible to build a collaborative model that not only relies on collaborative content but also includes some element of collaborative income distribution?

I've been thinking about how this might work for TBB, and it's really not a simple problem. The six options are:

  1. Run it along Kos lines, where the site owner keeps all of the money after expenses.

  2. Run it as a benevolent dictatorship, where the site owner keeps some of the money and distributes the rest to active contributors according to a subjective assessment of value and work done.

  3. Automate the distribution to make it based on rankings of some sort, or volume of contributions.

  4. Forget about any kind of income at all, and run it on a volunteer not for profit basis.

  5. Make contributions voluntary, and include some revenue directing options so that happy readers can direct cash, or perhaps just applause, to deserving contributors.

  6. Combine 3 and 5 so that there's a special 'That really was outstanding - please pay this person some of my montly subscription' rating option, and then tally up the results at the end of the month and split the spoils accordingly.

Looking at these in order:

  1. It's not fair to do this completely. I don't think it's unreasonable of a site owner to be paid some percentage of income by default if they've done most of the work to get it set up and are doing a lot of background work to keep things running. But keeping all of it seems excessive.

  2. This could work for a small site with not many contributors. But unless the site is being sponsored or supported by some very rich people, there won't be enough contributions to make a difference, so it's possibly academic in practice.

  3. This looks simple, but if the ratings are simple it's easy to game the system. And it's also potentially capable of distorting posts to make grandstanding more likely.

  4. Is the default situation. Now - I'll admit (as someone who writes for a living) that I have a real problem with the notion of a gift economy - at least once something passes a certain size and level of influence. dKos looks like a gift economy but really isn't. Mojo is all very well for everyone else, but it doesn't pay the bills. So I would like any site of a certain size to pay its way.

This is less of a problem at current ET level, because economically it's more or less a zero sum game. And in terms of content time spent contributing is well spent because of the synergetic uplift created by all of the other contributions. But this can only work on a small quasi-tribal scale, and anything bigger will start to sprawl and confuse the dynamics - both in terms of extra expense on the infrastructure side, and in terms of people wondering how the energy exchange is supposed to work.

5. This looks like the best all-round option to me. The Editor doesn't have to manage the process. But I'm still worried - would this be too easy to game? The last thing I'd want is to see contributors playing to the gallery for a cash reward. My feeling is it depends on the aims of the site. For some sites, if people want to grandstand, let them. For others, readers may be smart enough to spot it and ignore it. It's an interesting question.

One final point

Something about this process reminds me of larger business models. I'm interested in the idea that it could be possible to generalise content sharing and creation mechanisms towards a larger contributory company structure. Currently companies are very rigid and hierarchical, and even happy-clappy Californian institutions like Google still suffer from command-and-control thinking in the boardroom.

What if there was no boardroom, and decisions were discussed in public and made collectively? If it is possible to build a collaborative company, there's plenty of scope for extending the model in different directions that aren't limited to words, pictures and political thoughts.

This is a very interesting diary and brings up some points not yet considered. I agree with all the concepts and caveats.

The final point though, is the most interesting to me. It underlies what we have been discussing rceently.

I am convinced that new astonishing models will emerge - and people will say "This is how it should have been done all along" It's Phase Transition time, from ice to liquid. We are fortunate in that sense to be involved in the genesis of the transition here at ET.

You can't be me, I'm taken

by Sven Triloqvist on Sun Oct 22nd, 2006 at 06:31:39 PM EST
I'm in moving hell these days, so I can't participate in these discussions about EuroTrib in a way to do it justice.  But if I could just reiterate one suggestion...

If EuroTrib is to have a cooperative structure with a European base and server, which Jerome seems cool with, if we need a formal legal structure, how about the French cooperative structure SCOP:

Focused on people more than capital, Scops are considered by many to be the ultimate company structure for participatory management. Employees are actively involved in their companies and are highly motivated because they have direct stakes in the capital ownership, results, management, and decision-making of the Scop. Learning is encouraged.

or the more specifically "multi-stakeholder" cooperative structure SCIC:

The Scic concretizes the advent in France of the co-operation in "multi-stakeholder", making possible to associate and to make you work together:

  • Employees of the co-operative (as in Scop),
  • Any individual wishing to take part voluntarily in its activity (as in association);
  • Usual users and people who, in any case, benefit from the co-operative activities (as in co-operative of consumers);
  • Any person or entity, of private or public law, which intends to contribute directly, by his work or a by a contribution of any kind (economical or other) to the development of the co-operative.


I'm sure other European countries have similar cooperative structures, but I happened to have learned about this one, and since the description reminded me of earlier discussions on this subject, I thought I'd throw it out there.

Truth unfolds in time through a communal process.

by marco on Sun Oct 22nd, 2006 at 09:13:38 PM EST
I mentioned the SCOP before. The excellent French economics monthly, Alternatives Ecomnomiques, is a SCOP. However, a SCOP is an employee cooperative. The application to a community site isn't obvious: if a group of contributors constituted the SCOP, they would all have to be salaried to satisfy the legal conditions.

I wanted to look into the SCIC to see what promise it might hold, but haven't had time. It certainly looks interesting.

There's an easy-to-do French structure which is the Association (law of 1901), which is not-for-profit but may engage in a large variety of activities. Members must pay an minimum annual subscription of €10 (but are free to pay more if they wish). The problem with it is that the president of the association (elected by members), is personally liable.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 23rd, 2006 at 03:49:43 AM EST
[ Parent ]
You have described SCOPs before; sorry, I had not capt the point that "stakeholders" (i.e. contributors) would have to be salaried employees.

The problem with it is that the president of the association (elected by members), is personally liable.

From this description of the SCIC (Microsoft Word doc!),

The SCICs are limited liability companies or joint-stock companies

It seems to me that the SCIC is compatible with the notion of having a "fighting fund", as you and Metatone discuss below.

One aspect about the SCIC that I like is the mandatory

setting aside of at least 57.50% of the profit to the indivisible reserves and no derogation whatsoever is permitted to the above.

Below are more of the "Special SCIC provisions" from that doc:

1.The SCIC definition once again highlights the link between economic development and social development:

Article 19.5 -The SCICs are limited liability companies or joint-stock companies  with a variable capital governed, by the provisions of this law, and by Commercial Law.

Their objective is the production or the supply of goods and services having a general interest and offering a social benefit";

  1. non-profit aspect of the SCIC : The Law imposes the setting aside of at least 57.50% of the profit to the indivisible reserves and no derogation whatsoever is permitted to the above. Any public aid is not taken into account in calculating the interest paid to the social partners (Article 19.9 of the law).

  2. The Departmental Prefect where the SCIC is located must issue an approval before the commencement of any activity. The approval has a duration of five years, is renewable and can be withdrawn (article 19.13 of the Law and articles 1 to 7 of the decree).

  3. Any declared associations can be transformed into a SCIC without changing its legal status (Art. 19.14 of the Law concerning companies and article 28 a) concerning associations);

  4. The co-operative review is compulsory (article 19.20 of the law, specified in article 13 of the decree) ;

Truth unfolds in time through a communal process.
by marco on Mon Oct 23rd, 2006 at 04:19:09 AM EST
[ Parent ]
From that same document (MS Word doc):

Very limited profitability

The considerations concerning companies with a social objective shared with our European neighbours in the Digestus European Framework by the Cecop7 and the Italian co-operation in 1998-99 had initially concluded on the need for such companies not to have any profitability whatsoever.

The non redistribution of profits and their total reinvestment in the business activity are a part of the afore-mentioned altruism.


Not only is the interest paid to the shares limited or non-existent; not only are the shares not revaluated taking into account the company's profits (as is the case in other co-operatives), but if the company terminates its activity, the liquidation surplus shall be granted to another co-operative, association or public body. Personal gain is totally excluded from a SCIC. Should the approval be withdrawn by the Prefect, the company must remain a co-operative 8 since it cannot grant  anyone the reserves9 it has accumulated, otherwise it must terminate its activity.

[My bold; italics in the original.]

And regarding new features of the SCIC qua cooperative:

Novelties for co-operatives [that become SCICs]

1.    Opening up of the entire activity to third parties, non-members of the co-operative (Article 19.6 of the Law) ;

2.    Multi-partner aspect of the SCIC : the members of a SCIC must include at least three different categories of people (natural and/or legal) ; having a different relationship with the activity being carried out. Such minimum number must compulsorily include the users (clients, beneficiaries) and the wage-earners of the co-operative. Beyond the minimum of three categories the multi-partner aspect of the SCIC is open to any natural person and any private and/or public legal person (article 19.7 of the Law);

3.    Colleges of members can be created to govern the General Assembly, as long as the principle of « one man one vote » in the College Assembly is complied with. However, the votes of the members must be weighed when there is the report on the results of the vote of the different colleges in the General Assembly (article 19.8 of the Law).

Truth unfolds in time through a communal process.
by marco on Mon Oct 23rd, 2006 at 04:29:24 AM EST
[ Parent ]
if we talk about site like dkos/ttb/et, i am not really confortable with sharing revenue model :

i do not see the point to pay someone (even by advertisement) to read someone opinion/rant/whatever.

For my point of view, revenue should be use to pay hosting/basic expenses/web contractor and if there is money left, using it for a definite purpose : charity, lobbying,copyrights.

i would like to see revenue used to pay copyrights of relevant articles/books/documentaries that can be downloaded (by members?).


by fredouil (fredouil@gmailgmailgmail.com) on Sun Oct 22nd, 2006 at 10:50:33 PM EST
I think that's a valuable insight. One might even extrapolate it to say that a political site like TBB might want to pay the owner a bit more than expenses (for fairness) and then channel the rest into a "fighting fund." After all, that's the "meta-point" of the site, to have a political effect.

Building a community process to direct the spending of the "fighting fund" is still imperfect, but it's a more understood process than paying collaborative contributors.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Oct 23rd, 2006 at 02:22:45 AM EST
[ Parent ]
That might fit better with the idea of being a think tank. A "fighting fund" could pay for useful resources that cost (subscriptions, pay-for reports and online books, etc), allocate reasonable expenses for time spent by a working group of contributors, and cover costs associated with publicity for finished papers, around themes that were backed by (precise majority rule to be defined) after discussion.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 23rd, 2006 at 04:02:22 AM EST
[ Parent ]
I agree that any potential profit would be best used for costs and developing the site and its resources. None for salaries or other personal recompense.

You can't be me, I'm taken
by Sven Triloqvist on Mon Oct 23rd, 2006 at 06:39:45 AM EST
[ Parent ]
I don't know where this site is legally based, but at some point profit = tax.

Whatever is done, it needs to be in a form recognisable and acceptable to the tax authorities in that country, otherwise it's possible that somewhere down the line Jerome could end up with a tax bill for income he hasn't actually had.

Not-for-profit doesn't necessarily get us out of that trap either.  Campaigning organisations are often denied charitable status (and therefore tax exemption) under UK law.  The  
draft Charities Bill currently under discussion does little to clarify or improve the current confusion.  (It may of course be that other European countries have a more relaxed stance, and this is something else to bear in mind.)

by Sassafras on Mon Oct 23rd, 2006 at 05:58:09 AM EST
[ Parent ]
if it is problem Seychelles are nice place to establish a venture.

very affordable and convenient to use, i love it ;-).

by fredouil (fredouil@gmailgmailgmail.com) on Mon Oct 23rd, 2006 at 06:23:05 AM EST
[ Parent ]
I'm sure we could swallow all profits by holding conferences out there  ;)
by Sassafras on Mon Oct 23rd, 2006 at 06:58:54 AM EST
[ Parent ]
Forget about any kind of income at all, and run it on a volunteer not for profit basis.

Running on a not-for-profit basis does not imply no income! The site would still need income to pay server fees, etc. I would also like to note that once such a site reaches a certain size it might make sense for it to employ some people, which is not at all uncommon for non-profits in general. I don't think a paid editor in chief and a paid tech person is a problem, or negates the non-profit mode of operation, or even the community based, volunteer writer approach. However, I do agree that doing this under the "I own the site, I pay myself to work on it" is not the most community based approach, and leaves much to wish for in terms of transparency. Figuring out how to work a site as a cooperative sounds interesting. (bruno-ken's comment below) Then you have the possibility of a voting membership/ownership which, in case of large growth for the site, can decide to employ someone to work in whatever capacity they deem necessary. For a community site this makes a lot more sense than the model of self-appointed leadership. In ETs case it will probably be a little while before anyone has to worry seriously about what to do with the profits, or that someone needs to be employed for the site.

by someone (s0me1smail(a)gmail(d)com) on Mon Oct 23rd, 2006 at 03:41:49 AM EST
I think the full-time issue is the problem. If people are paid nothing, that severely limits the amount of time they can spend supporting the aims of the site.

You could say 'Yes, but ET works like that.' But as we've seen, it actually sort of doesn't, and the problem of not having - at least - a paid tech on call has caused some issues.

If the point of a site is to campaign and organise, that's not something that can effectively be done as a hobby.

But I think the meta point I was trying to make was that people - including contributors - should be rewarded for effectiveness. And that to some extent effectiveness is decided by the community.

It's actually a kind of delegation, where - potentially - subscribers could say 'I support this, but I don't have the time to pursue it myself, so here's some cash or other help to do it for me.'

The difference is that it would happen in a more fluid, immediate and interactive way than today's NGOs offer. If you give money to FOE or Greenpeace, they'll go and do what they want with it, but won't give you much of a say in what that should be.

That's not always a bad thing, but once they have a campaign running it's then very hard to switch direction quickly and deal with something new if it comes up.

Something like dKos is much more fast moving and responsive, in spite of its huge size.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Oct 23rd, 2006 at 07:05:16 AM EST
[ Parent ]
I don't see your suggestions applying to ET any time soon, but they are still valid.

Everything is moving fast. Technology is changing, audience habits are changing.

To quote Dr Steven Hawking (2006):  "In a world that is in chaos politically, socially and environmentally, how can the human race sustain another 100 years?"

One can imagine many different future content models. As you suggest, the rise of a large content aggregator is possible. Such an aggregator could display the best of the best in a commercial site, using a very large volume of visitors that would produce large income (see Google) and yet the cost per individual visitor would be zero.

I could imagine, like the BBC news model, that 'stringers' (freelancers) would be paid for contributions. Stringers are paid because they represent local knowledge. They are also often paid because they have some speciality knowledge that is 'local' in another way.

I believe this aggregation model will not necessarily mirror Google, MYspace, Youtube or any of the others. These are facilitators more than aggregators.

But what these models might be is part of our ongoing discussion about and on ET. ET could become a stringer, and it could happen sooner than we think.

You can't be me, I'm taken

by Sven Triloqvist on Mon Oct 23rd, 2006 at 07:49:25 AM EST
[ Parent ]
Media critic Jeff Jarvis has a web site devoted to just these sorts of issues: http://buzzmachine.com

(He does go off on personal tangents from time to time). His current hobby horse is that old media doesn't understand the internet and needs to adapt. He likes efforts from the Guardian (but it's financing is unique - a trust).

What he is a little vague on is how actual original reporting would be paid for. There are several efforts underway. One site proposes listing stories worth investigating and then have a bidding process where freelance reporters will do the work for a fee to be paid for by readers who want the story to come to light.

Another (so far successful) effort is a spin off of the Talkingpointsmemo.com site: http://tpmMuckraker.com where the owner of the original site asked for reader contributions to pay for hiring two investigative reporters. He raised enough money to start the venture.

There doesn't have to be a single model, either. Some sites (like mine) can just be as personal projects, some like dailyKos can be for profit and accept ads and subscriptions and some can be non-profit and raise money without allowing advertising.

The one thing blogs have in common is that they are using the work of their readers for free. If we were submitting our diaries to print publications we would expect to be paid for them, so how long people will be willing to undertake the effort without any (monetary) reward is an open question.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon Oct 23rd, 2006 at 10:47:23 AM EST
The one thing blogs have in common is that they are using the work of their readers for free. If we were submitting our diaries to print publications we would expect to be paid for them, so how long people will be willing to undertake the effort without any (monetary) reward is an open question.

That depends on who you think is providing a service to whom. LTEs and op-eds are submitted for free. Blogs may act as a free publishing outlet where otherwise you'd pay to have your content published.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Migeru (migeru at eurotrib dot com) on Mon Oct 23rd, 2006 at 10:55:45 AM EST
[ Parent ]
That's really a question of audience reach. Vanity publishing in print exists because people will pay for the pretend experience of being a writer. Some vanity publishing outfits sucker people deliberately.

In fact content only becomes truly valuable when someone, either an audience or a publisher, is willing to pay for it. That raises it beyond the YouTube model of trivial distraction. You get what you pay for on YouTube, and it shows.

Print publishing includes fixed costs which is why there has to be some quality control, and some likelihood that new content will produce enough income to at least cover those costs.

Electronic publishing has much lower fixed costs, which is why it's more of a free for all.

But it's a standard failing of electronic media to assume that distribution costs are the only ones that matter, and that the intellectual content is worth exactly nothing. Because a file is a file is a file, no matter what's in it.

In fact it's the intellectual content that provides real value. The ad industry has evolved useful metrics to define perceived value in terms of audience quality and quantity. Those metrics are still valid for electronic media.

But however you measure it, the point is that as long as the content has some impact in terms of reader influence, it's not just a vanity project.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Oct 25th, 2006 at 05:29:44 AM EST
[ Parent ]
What I'm trying to say is this: I can publish my diaries on blogger.com, or on ET. They're both free both in terms of money and access. But nobody is going to read my blog on blogger, whereas I can call http://www.eurotrib.com/user/Migeru/diary "my blog" and it does get read, though possibly not accessed in that way. So I don't understand why rdf says that blogs use the work of their readers for free. Maybe it uses the work of the writers for free, but it also provides a service to said writers. Maybe it uses the work of the readers (as providers of ratings and page views) for free, too, but the readers are getting valuable content for free. So I still don't get it.

If any of us thought we could make a living out of what we write here, we wouldn't publish it here. Do you personaly cross-post what you write for money here? Neither are you expected to.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Migeru (migeru at eurotrib dot com) on Wed Oct 25th, 2006 at 05:39:12 AM EST
[ Parent ]

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