Digital Publishing Is A Pyramid Scheme

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Here are some brief points on the economics of for-profit start up publications.

There are a great number of them that are in profit. They exist to make money. They are not an altruistic project enamoured of the public good. They have boards, they have CEOs drawing large salaries, they have full time staff. Those staff frequently include journalists. There are also ad sales people, designers, accounts people, editors, publishers and the people who actually build the websites. All of these are costs incurred in running a publication.

The point of the website is that it then exists to attract advertising dollars through pageviews. These advertising dollars then pay the salaries of the staff, along with any investment capital the publication attracts on the basis of its audience share.

There is one key component, however, that most of these publications fail to factor in, and that is a contributor budget for the writers who provide the work that the entire enterprise is built around.

How does this happen?

This happens only because the people at the top of these publications — the publishers and CEOs and other senior members of staff — actively decide to not pay for writing* purely because they know that they don’t have to. Do you think for one second they would sit around and decide that the ad sales team will work for the sheer gratification of their job? If so, click here.

Yes. People who refer to themselves as professionals can start a business that has no intention of paying a vast majority of the workers who build that business for them. For free.

Let us look at this in isolation: working for free on behalf of someone else, in order to grow that person’s business. And you will not see a cent.

I don’t know how else to articulate that other than to say that you are not thinking through what you are doing if you agree to these kinds of terms.

You are a serf.

As has been elucidated elsewhere, we are now at the point where the attention economy has tapped out.

Crikey is the latest publication taking heat for not paying its writers. They are far from alone. There are a tonne of digital publications in Australia that pay either nothing, or what they consider to be “rates”. Those rates start at $50, and one publication pays up to $500. The vast majority, however, sit between $60 and $150. These publications include the Guardian Australia, which has very effectively used the “prestige” associated with its masthead to get a whole lot of writers excited about exposure at very low financial renumeration. It also includes the Sound Alliance, a huge, multi-site portal that sells ads to young people and pays very low rates to the few writers that it does pay.

There are two ways this can stop:

1. Industrial action outlawing the practise of unpaid labour spearheaded by the union representing artists and writers, then instating and enforcing a minimum award wage;

2. While waiting for this to eventuate, writers must refuse to work for free.

If there was no one queuing up to give away their work, the meeting that takes place where publishers sit down and do the sums and leave nothing for contributors would not be able to take place. For as long as there is a market to be exploited, it will be exploited in this way.

When it comes to you that you are given an offer of exposure from a for-profit publication, remember these two things: exposure has become the end in itself. This is typified by the incremental amounts of money paid by the Guardian, which is, presumably, a premiere outlet for writers to be published with. However, you will not be properly paid, the platform itself is the pay.

Secondly: you are making money for someone else, and you are not seeing that money. There is a line trod out by several of these publishers, which is that they have hired journalists. Great! Use those journalists to produce 100% of your stories. Oh, they can’t do that? Then hire more journalists. Oh, you don’t have money to hire more journalists? THEN YOU DON’T HAVE A BUSINESS MODEL, YOU HAVE A SWEATSHOP.

The specious reasoning in “we’ll get advertising this way and then be able to hire people” is likewise, not a business model. Why would anyone provide hours and hours of free labour so that perhaps in the future a single person — who in all likelihood will not be them! — can be hired and earn a salary when they have earned ZERO DOLLARS in the process of facilitating this theoretical position?

Editors of these publications: please stop being disingenuous about your position, sending weasel word laden emails to writers “apologising” for your tiny or nonexistent budget: you took a job knowing that you would screw writers over in the process by not compensating them fairly. At least own up to that, rather than dole out fawning faux-apologies in the hope of squeezing free work out of the people facilitating your pay cheque.

Writers, please stop thinking of your trade as a special and delicate and artistic pursuit that you are privileged to reach an audience with, even if you aren’t paid. It’s a business. Everyone seems to understand that part, except for those exploited in the name of this “business” being allowed to continue.

*Photography, illustration, design.