Friday, March 19, 2010

Depression Economics: Why Making Money Via Revenue Share Is the Wave of the Future

Writers making decent money at revenue share sites such as Suite101 or HubPages may wonder if this is just a flash-in-the-pan opportunity, or if there's really a future to it. After all, we're in a recession (actually, I'd say a depression, though, like the Great Depression, it won't be called that until some time has passed). In an economic downturn, things are unstable, right?

The answer is, both are true. There's a future to it because the world is shifting to a new economic model. It's flash-in-the-pan for the same reason - because we're shifting to a new economic model.

So if you're game, take a deep, relaxing breath for a rather meandering but brief sociological bus tour of 20th century history.  On this tour, you'll learn why I think we're in the Greatest Depression and what's caused it.  We'll be back in less than twenty minutes in the familiar world of revenue sharing.

Before and during the Great Depression in the early part of the 20th century, society changed radically all over the world.  In the U.S., the modern middle class, based in the existence of the car and suburban living, sprang up.  (See The Houses That Sears Built.)  The new middle class became the parents of the baby boomers, the grandparents of Generation X and the great-grandparents of Gen Y. They caught on to new economic opportunities then arising.

These opportunities arose on the heels of a small number of major technological advances - the most landmark being not, as you may think, the telephone or radio, but the car. The car redistributed demographics in a way not seen since...well, the train. And before then, the horse.

The car moved hoards of people from centralized cities to outlying areas.  Unlike the railroad before it and the airplane after it, the car moved individuals at will, not just groups of individuals on a prescribed and pre-routed schedule.  The only limitations were the roads on which the cars drove.

The automobile was so quietly radical that in the U.S., FDR's New Deal focused on building an infrastructure of roads.  The flexible and far-ranging auto dispersed people all over the country, creating entirely new demographic patterns that allowed for the creation of suburbs and commerce organized around new kinds of criteria.

While the new demographic patterns opened the door to new commercial opportunities, it closed the door on others. The world looked very different after the Great Depression, during the decades-long economic boom during the period of the baby boomers' coming of age.

This is more or less exactly like the Internet.

When you think about the way it moves individuals - or more precisely, changes their movement patterns - the Internet is less a new communication medium than it is a new transportation medium.  People began to do commerce in an entirely different way.  People began to conduct business in an entirely different way.  People socialized in an entirely different way.  They changed not just what they were saying and doing, but where they were saying and doing it.

I think the "Greatest Depression" we're experiencing now (and yes, darn it, we are!) is less due to the corruption of individuals or the greed of industries than it is to the growth of the Internet and a redistribution of what had been centralized, monopolistic-style wealth. People have always been corrupt.  They've always been greedy.  What they haven't been before, though, is transported by electrons.

Small changes on an individual scale translate to massive changes demographically.  Because people no longer need to fly quite so much, or drive quite so much, or buy houses in centralized locations quite so much, or work in an office building, or shop at the local retail spots, the auto industry, the airline industry, the banking and lending industry, the construction industry, the bricks-and-mortar retail industry, and oh-so-many other industries are toppling like dominos.

The "Greatest Depression" that we're experiencing now is no mystery.  It's been caused by the technological  developments of the computer and the Internet.

To bring this back to writing content for revenue share on the Web...These online writing sites are new business models based on the new transportation medium that is the Internet.  A housewife like me can work at home.  I have a better chance of finding work online than I do finding it in my local area.  The last time the average housewife was needed more in the home instead of out in public working was...the fifties?  Sixties?

(Back then, people thought women had a duty to stay at home - and I believe the underlying reason for that is that it made the most economic sense given the nature of the economy at the time.  And when women started pushing en masse for their right to a career in the sixties, it was because that, too, was an economic necessity.  But anyway, that's another tangent for another time...)

Getting Internet access into every household and supporting new legitimate online business models, including building content on the Internet, is literally part of creating the new infrastructure, as building the road system was after World War II.

We're talking a long-term change here.  Unless the world somehow loses access to the resources that make the World Wide Web and its home, the Internet, possible, legitimate business models that appear online are not flash-in-the-pan. 

But as it grows, the Internet is also rapidly changing, becoming almost unrecognizable from one year to the next.  So the business model of revenue share - and for those who haven't been following my posts don't know, revenue sharing is earning advertising revenue from content-based Web pages that you publish - is guaranteed to change as it grows. Many business models will appear and disappear in the next several years.  Some major players who've taken the field will be forced to play fair.  Scams will proliferate.  New laws will regulate the shanty-style financial activity that has been of necessity set up in the  "Wild West" that is Internet City.   And revolutionary changes will occur to the world's commerce patterns, distribution of resources, and - dare I venture there - politics. 

If you buy this theory, then you know now what to do to keep your head afloat during this depression.  What not to do is fight tooth and nail all the changes that are afflicting the commercial model we've been living in since World War II.  Instead of saying, "The old way was virtuous!  The youth today have no values!" we should be saying, "The old way is dying!  The youth are adapting to a new reality!  We should learn from them!"

We should be watching the trends and doing what we can to enable the new Internet model of commerce.  Not because new is automatically better.  But because society changes as a whole when it needs to change.  Not adapting to the change means not surviving.  And the longer the old model persists in a struggle for power with the new one, without either side winning, the longer we'll be sunk in an economic depression.

So yes.  We're on a sinking ship, and unless we bail and board the bright new one, we're in for seriously stormy seas.

Tell me what you think.

Copyright Nerd Writer Mom


Anonymous said...

Hey there Nerd Writer Mom,

I have been reading many of your blogs lately as you know I am trying to break into the "new paradigm" as you call it.

Now I'll be honest. The causes of many of the changes in the 20th century were political in nature, often caused by the government not being able to recognize changes and consequently reacting in a way that usually exacerbated the normal cycle shift rather than letting the correction occur normally. This caused the great depression of the 1930's, the recessionary stagflation of the 1970's and the current disaster that is about to overwhelm us as we have never seen. We can only hope that the most recent commercial model, the internet, won't be taxed and regulated to death in the near future.

Having said that, though you have recognized the latest development of economic evolution and the innumerable opportunities that only visionaries like yourself grasp before others are forced to adjust.

I can tell you've studied economic models of the past and now understand the need for transition to the newest model, online commerce for everything.

Just as the once brilliant A&P plan became obsolete once people fled the city for the suburbs and catalog stores died when shopping malls came around, the way news,information sharing and entertainment is obtained now is changing from print media/advertising/brick and mortar commerce and outside entertainment to the new economics of broadband.

I'm not saying that is necessarily good for society, we will have to wait and see but it certainly is a reality and those of us who adapt early will be better off by circumventing the difficulty of transitional economics. As you have suggested, the best way to make the adjustment is to try different content sites and sell your writing product until you find the exact fit.

Those who make the adjustment sooner than later will be the beneficiaries of a lucrative business opportunity.

This means we may have to change the way we write and abandon some of our traditions and
become new, hip writers.


Nerd Writer Mom said...


Thanks for your thoughtful post.

Yes, we do indeed need to stop assuming that because things have gone along one way for decades, that is the "right" and "natural way. Things are changing and it's inevitable.

You and I may not agree on all points, but I think we agree that the world's economic model is changing. Since the industrial revolution, society's been scrambling to try to catch up to infrastructure changes. Well, now the earth is changing under our feet again, and writers - creative people in general, in fact - have an advantage in the marketplace again, because we're needed and we're available to do the job.

I really want to encourage people who were writers offline to carefully but confidently enter the online market. And not only as hired writers - though certainly as that - but for those brave individuals, as entrepreneurs. I suspect it won't be long - maybe 15 years? - before it's recognized that job security is greater as a self-employed writer than as an employee - or at least, before contract work becomes the norm and the line between employment and self-employment gets fuzzy.

As we start writing online, we should watch out for scams and defend our interests, but also explore the unprecedented freedoms and new opportunities that abound.

A side note: As has always been the case historically, these new freedoms come with a catch. Just as the Wild West ultimately needed to be "tamed," so will we have to give up some freedoms. That sounds scary, but it needn't be as 1984ish as it seems.

Pretty much what I'm saying is that when things change, new regulations (whether formal or informal) invariably crop up - humans gravitate toward social regulation and have since they lived in caves.

Anyway, I prefer not to provoke a hot political discussion between libertarians/republicans/democrats/socialists/whoevers, as always seems to happen these days when the word "freedom" pops up - at least, not on this blog. It's bound to make me, at least, go bonkers and get us all off track - but I do want people to be realistic.

Before the virtual land that is the Internet is invaded in droves by the "women and children" (women and children in the metaphorical sense, that is - meaning the wave of people who come in after the rugged pioneers) things have to be safe and functional. For example, a non-techie writer needs to be able to pop up a website and post his writing without having to defend himself from con artists, thieves and saboteurs.

Why? Because of specialization. People are highly specialized these days (albeit in one, two, or multiple areas). Most men and women are not the rugged pioneers that have to date populated the Internet. They cannot build a website or write code or troubleshoot a website that doesn't work, any more than retailers of the 20th century could fix or install plumbing and electrical wiring and security locks in their bricks-and-mortar stores.

To make specialization possible, a functional and safe structure needs to get built by those who can build it.

Safety for these folks probably means changes in law, privacy, and no doubt taxation. I don't say I like it - just that it will happen. If it doesn't, these people won't move online and the economy will continue to stagnate. And that stagnation would either lead to a prolonged delay of the inevitable, or there would be radical changes to society. Either way, it's bound to be painful. I don't like pain. That's my take, anyway.

And now I see I have gotten off track, all by myself. Hmmm....

stevefon2004 said...

You are correct. The time factor though is a crap shoot. I predicted 10 years ago that most commerce wourld be done online. When I sold my house in 2002, I didn't see much use of a real estate agent and figured they'd be gone by now. What I underestimated was the staunch defense of the old way. The billions of bucks spent to preserve the old way of doing business by those invested in legacy products and services. Broadband, invented here in the US has fallen behind because of the laws preserving the incumbents. Foreign countries seem to be moving forward because they didn't have the great infrastructure that we did. Why are cell phones still kind of mediocre?? The same reason. Remember that is will be much more difficult to regulate the Internet as it crosses so many political and legal juristictions.

I've been doing much research on this online writing market and am making the plunge and I thank people like you that can hopefully keep me clear of scams.

I'm starting on AC and CC. Do you have a recommendation of which one is better or both? It is not so easy to get adsense and e-bay affiliate accounts to get on hubpages or ehow but I'm working on it.

Thanks again.


Nerd Writer Mom said...

Hi Stevefon2004,

I think you might like, which takes international applications (if that applies to you) and doesn't require an AdSense or affiliate account. They also train you to do SEO. They ask for sample articles, so I recommend you study their articles to get a sense of what they want and then write the samples. They pay writers by revenue share only.

I never had much luck with Associated Content and wouldn't recommend it to folks starting out, just because of my personal experience. But I know many writers like AC and some, I believe, do well there - which seems to be true of all the legit sites. When I tried it, I was much newer at writing SEO copy, and I could be underestimating its value.

I have tried Constant-Content - I have about 15 articles up there - and like it very much. I recommend you study the kinds of articles that sell there once you sign up - there's an ever-changing recently sold articles list that you can examine.

Best of luck with this! Let us know how it goes!

stevefon2004 said...

Thanks. I'll try them. I'm not international btw. I live in NH. I've made applications to the affiliate programs but I don't seem to meet the requirements as far as commercial value.

Thanks for the info on AC as that was the one site I thought might be the best. I'll try CC. Is it ok to submit the same article to different sites or is that plagerism?

Nerd Writer Mom said...

As far as plagiarism goes, that depends on the particular sites' TOS. If you own the article, it's usually called "duplicate content" and different sites take different stances on it. Most want unique content, though.

I haven't posted duplicate content, personally. There's really no point to it that I can see. With duplicate content, Google Search seems to pick one version to index and more or less ignores the rest.

However, if you have articles up already whose rights you still own and want to sell them also at Constant-Content, I believe you can do so if you sell usage rights only; though offhand I'd say they won't be valued at much, maybe a few dollars.

You might also try article sites I haven't tried personally, but which seem to be legit, like Squidoo, which I gather allows you to earn without an affiliate account directly. But I've never posted there, so check to be sure.

And don't forget Demand Studios. At this time, they pay $5-$15 per article for beginning writers or have revenue share titles you can write that pay zero up front but may be worth trying for the ongoing revenue. The editorial process can be frustrating, but not as frustrating as a regular job. :)

And Textbroker can be a really great place to get your feet wet. You pick the assignment, there's no game playing and not much editorial involvement, and it's not hard to get an article accepted. You start writing for peanuts so small they're embarrassing, but it can increase if you move up pay levels or get direct orders from clients who like your work. I wrote a bit for Textbroker when I was just starting out and liked it before I moved on to other things.

Kinsey said...

I have to say that for all the shouting I hear about the internet being the "New, Big Thing" I have yet to read the argument in such an informative way. You've really broken it down here, and I respect that you have such a strong stance behind your message.

While I'm still figuring out my own business model, it's very helpful to come across your input. I am not one that wants to be progressive simply to progress, I like to be going in a direction for a reason and to better the situation. What you outline here is the reason WHY the internet is so hot and HOW we need to use it. It's not just jumping on the bandwagon simply because we're all on this ride together. You make a lot of sense, which is something that is getting harder and harder to find.