Wetpaint CEO Ben Elowitz on the Future of Digital Media
I have a question for Jonathan Tasini, who is leading a $105 million lawsuit on behalf of thousands of uncompensated bloggers against The Huffington Post.
If you and your litigious colleagues are so good, so valuable, and so organized, why don’t you launch your own online media venture to out-compete HuffPo?
I’m sure you have your reasons – and, of course, initiating a lawsuit is so much easier than starting a digital publishing site from scratch.
But, let’s get real.
Blogging isn’t free-lancing, and it’s hard to imagine that any of the contributors who sent their material to HuffPo ever thought it was. As I wrote several weeks ago, every contributor knew the basis of the transaction: write what you have to say in exchange for being publicized. As always, the prime currency of blogging was fame – not fortune.
So who’s trying to cash in now?
On a broader, more global note: I feel sad for the desperate bloggers who are trying to shake down HuffPo; and I’m deeply sensitive to the fact that the media world is under pressure and steadily shrinking. But Tasini and his fellow litigants look like starving dogs scrapping for a shred of meat. It’s unseemly and unproductive.
Will Tasini respresent a class action suit against Endemol on behalf of all American Idol contestants, who were totally exploited as they sought super-stardom?
Or will he represent the tens of millions of users in a suit against Facebook, for advertising against their status and Farmville activities?
Both legal moves would make for entertaining blog posts, and I look forward to the juicy reading!
I sent the following thoughts to Fred Allen at Forbes.com about how bloggers made The Huffington Post what it ultimately became, and profited all along the way. For Fred Allen, Lewis DVorkin, and all of Forbes’ leaders, they are taking on the challenge of merging world-class editorial and brand reputation with the new reality that one can’t pretend to serve one’s customers best by writing all the good stuff onself.
Just realizing that the formula needs to change though is only the beginning. It immediately leads straight to serious questions to conceptualize and implement: now they have to figure out how to combine two different philosophies – one of proprietary branded editorial, and one of curation.
It’s a live laboratory as we get to see them take on the challenge, even as AOL and Huffington Post have a similar challenge of bringing their own two approaches together.
My comments to Fred are reprinted below; and Fred’s thoughts are here at Forbes.com.
There has been a backlash against Huffington Post in light of its acquisition last week by AOL.
People who were willing to contribute to HuffPo for free are suddenly irritated that the AOL deal creates a payoff for shareholders but not for them. Since AOL is a publicly held corporate entity, these contributors’ expectations have changed, and now they want to get paid.
It’s a noisy revolt, but I think HuffPo’s dissident contributors are waving spatulas in the air, rather than guns.
Underlying these revisionist claims of exploitation, one thing has been clear from the get-go: The dominant motivation of the bloggers who have posted on Huffington Post has always been far more about narcissism than altruism.
The reason Arianna Huffington was able to attract such thoughtful and provocative bloggers in the first place was because her site is a promotion machine. With each new post and blogger added, Huffington’s creation became a more powerful destination. And that meant that the site was even more attractive to the next potential blogger. The choice for a new contributor was simple: Set up your own blog, and patiently hope you can build audience over a period of years, or join the club and get instant exposure. Like the AAA automobile club or AARP, the more members in the club, the greater the value became.
The benefits of joining Arianna’s legions were numerous: Posting at HuffPo offered instant reach, credentialing, and ego gratification. Make no mistake about it, these benefits were valued by contributors all along the way. (If they weren’t, then Huffington Post wouldn’t have any contributors in the first place.) In fact, these non-financial benefits have proved far more valuable to contributors than cash.
Looking back, then, it’s definitely been a win-win: Bloggers built their own value while creating value for HuffPo at the same time. And in the AOL transaction, absolutely nothing changes that value equation retrospectively—except jealousy.
Now, on a prospective basis, the only question is whether the value received by contributors going forward will be just as great.
In terms of traffic, there’s no doubt that it will be. But the real issue is whether the HuffPo brand under AOL’s auspices will be as valuable when it comes to providing the most important of all of Huffington Post’s assets—the halo of its brand prestige. From my perspective, this remains to be seen.
And, finally, consider this: If The New York Times had acquired HuffPo, would there be a blogger revolt at all? Absolutely not!
This highlights the greatest opportunity and the greatest risk for AOL and Arianna Huffington. If they can truly enhance the Huffington Post Media Group so that it’s an even stronger and more prestigious media destination, then their pipeline of great content will expand further, because the benefits of contributing will continue to grow. On the other hand, if the brand is diluted down to “old AOL” standards, then all will be lost.
Tim Armstrong was wise to put Arianna Huffington personally in charge of this, because the success of last week’s deal may very well hinge on her ability to promise, persuade, and deliver at a high bar. AOL will be relying on her strength of vision, her standards, and her personal brand to bolster not only the Huffington Post’s brand, but AOL’s as well.
So the real threat to Huffington Post’s contributors is not that they will be exploited; rather, it’s the potential loss of the media machine that has been promoting them for so long.
Last month, I wrote a post titled “Associated Content is Yahoo’s First Big Media Move. Here’s What Should Come Next,” in which I pushed Yahoo to acquire premium content properties to overcome the commodity signal they sent by acquiring AC. I said at the time that Huffington Post’s curation model “crowdsources content but applies a strong point of view and features premier branded names, lifting it above the commodity fold.” For Yahoo, Huffington Post is the perfect combination of premium and economical.
Now, over this last weekend, Erick Schonfeld wrote at TechCrunch that deal discussions between these two publishers are underway for a content partnership or outright acquisition. Though Arianna Huffington denies it, other sources indicate that HuffPo has been on Yahoo’s short list, and I wouldn’t be surprised if conversations have been ongoing.
While Yahoo had previously announced intentions to compete in news by hiring brand-name reporters, that direction is fraught for the big portal: the news category is difficult to lead with a heavy demand on consistently breaking news — and it would take years for Yahoo to build the credibility in original reporting to become a true audience magnet. And the prize for winning even if they do? It could be losses, not profits, as has been born out by the experience of myriad old media outlets who are now making over their businesses.
What Huffington Post represents is a far better road for Yahoo to go from portal to destination in a realistic way. HuffPo can draw audiences not by competing with the news outlets on reporting but with great access and point of view – both of which are within Yahoo’s brand and execution reach. It would serve as an anchor property with true destination draw.
Indeed, Huffington Post may be unique among the news-oriented sites of the portals, curators, and aggregators in having earned true premium positioning. They did so by emphasizing a strong and reliable point of view along with affiliation with notable brands (such as regulars Arianna Huffington herself, Bill Maher, Harry Shearer, and Rosie O’Donnell, along with guest posts from a robust range of influentials). Along the way, the site has also earned an outstanding brand and destination audience of 22 million (comScore), consistently garnering visits from both search engine referrals (14% of traffic from Google according to compete.com) and social networks (16% from Facebook).
This destination draw is critical for Yahoo. At Yahoo’s home page, 73% of monthly viewers are there to get their mail – and that usage is shrinking at (2%) per year (comscore April 2010 vs. April 2009) vs. a US internet universe which grew at 10%. As Yahoo commits to a media-company destiny, its strategy must be to create high-end destination titles that will draw premium advertising – not just keep mail users on-network longer.
For those in charge of Yahoo’s media properties, David Ko and Jimmy Pitaro, they would get two other benefits to leverage: HuffPo gives Yahoo a premium curation model prototype for it to replicate; and a DNA transplant to bring in the talent and experience to scale that model.
As far as the first, Huffington Post has shown itself to be the best of the curators, establishing a strong point of view that draws a huge audience with near-zero cost for original content. And the model – the fame and traffic of Huffington Post beget contribution from interesting people, which drives more fame and traffic for Huffington Post’s brand – is replicable in other categories, as HuffPo has shown with its entertainment category rumored to already reach an audience of 10 million monthly, according to internal measurements. This is the sort of model that Yahoo should be banking on, as commodity content alone will never make Yahoo a premier media company.
Perhaps more importantly, there is nothing to catalyze the adoption of a new direction like bringing on a talented and effective crew. An acquisition of Huffington Post brings not just a branded destination, but a whole crew of operators with a scarce and effective set of skill, approach, and attitudes. Those genetic elements are exactly what Yahoo needs to quickly set a new approach to existing properties with large audiences, such as entertainment, shine, and omg!, as well as to each new title launched.
All in all, an acquisition of Huffington Post would form the perfect foundation for Yahoo’s new ambitions as a premier media destination – and would be well worth the several hundred million dollars it would surely cost to set a bold and profitable strategy for Yahoo to be a premier media company.