The Tyranny of Persistence - how new media hacks are writing themselves into sharecroppers

Interesting story today on RADAR about Gawker Media cutting revenue per impression for its hacks even while revenue and traffic increases:

....the per-employee traffic isn't that much higher than it was a year ago. And yet the site traffic is up more—meaning the site is receiving more income that the company doesn't have to share with a writer. The site received 16.7 million pageviews in June. Only about 6 million pageviews of that traffic is attributable to writers currently being paid. So why is the company cutting the costs of staff pay, when it isn't forced to cut in writers for 10 million pageviews in the month?

One of my frustrations with many of the journalists covering the new media / tech space is their very cursory understanding of economics, which means that all sort of hype and cr*p gets picked up and reported on uncritically, so it is with a certain wry amusement I read this

The issue is that unlike print where yellowing copies of last weeks' newspapers are good only for fish and chip wrappers, Digital Media is persistent, ie that stuff written 10 years ago by people long gone is still garnering traffic, and as time goes by this rises - as shown in the diagram below:



So, in a CPM based Ad serving model, as time goes by the proportion of money a site earns from current output reduces, while the money earned from existing back-catalogue output increases - so that after a while by far the majority of its income is potentially coming from media already written. (There is a "half life" to old material, but if you model it you find say 5 years of Old stuff has a large presence at fairly low visit levels - you are essentially building a larger and larger "long tail" )

At this point a bit of game theory analysis does not go amiss - given that the historical content is lower cost to the owners, as they don't have to pay out the original writers (assuming all content rights belong to owners and there is staff turnover over time ) then the reliance on the existing writers diminishes. Those who pay the piper call the tune, but if you don't even have to pay the piper 'cos you've kept the tune.....

For writers to reduce this tyranny of persistence they either (i) need to keep the right to their own historical material (unlikely, as per page payments would reduce) or (ii) current writers must make contracts that take a share of historical traffic (harder and harder to do as reliance on them reduces). Otherwise its this way to Digital Sharecropping.....

There is a second impact of Ad based media paid by the page, which is that by definition "populist" stuff is better rewarded - so expect more sleb slavering and political polemics - and niche stuff is not, so for example balanced reporting on complex issues is a route to starving in the garret.

So anyway, next time all you online hacks wax lyrical about FreeConomics or that the New Media defines a New Economic Paradigm, take a look at your own pockets and note that same New Economics is thinning them out via some very Old Rules, that was well understood in that most deeply unfashionable of places, the Main Stream Media.

Oh, and you may want to look up a guy who sussed a lot of this about 150 years ago. Name of Marx......

(Update - another take on it here by Jason Calacanis - expands on the above thoughts quite nicely....)