Why Isn’t Internet Fame More Valuable?
By: Michael Tauberg
Tags: Internet, Media, Business, Writing, Venture Capital

Why Isn’t Internet Fame More Valuable?

Thoughts on Value in News Media

photo Oleg Magni from pexels.com

The Covid crisis seems to be destroying what’s left of mainstream news media. So far Vice, Vox, Bustle, the Outline, Wired, Quartz, and many more outlets have had layoffs or are contemplating deep cuts. Of course, this shouldn’t be surprising. Fields that have free competition and networks effects tend to end up with a few winners and many losers. So far, it looks like the New York Times is destined to become the winner of news, much like Facebook is the winner in social media.

This leaves journalists who can’t score big media jobs with dim prospects. I would worry about these reporters except for one thing, many of them are internet famous. Surely they can trade in some of that cultural cachet for cold hard cash.

Well maybe not.

Even before the media apocalypse of 2019 and 2020, most journalists were not exactly raking in big bucks. Shared spreadsheets of media worker salaries showed that many barely cleared 50K. Still, some of these workers have thousands of Twitter followers. Their writing has profound effects on our culture, doing everything from subtly steering public opinion to getting CEOs fired. So why exactly can’t this cultural influence be exchanged for money? After all, instagram influencers with less reach manage to earn thousands of dollars by selling attention. Why can’t journalists do the same?

Power Law and Information Networks

When thinking about the internet, I find it helps to look at this chart.

distribution of success in various media

Data shows that in every form of networked media, there will be a few giant winners (the top of the power law curve), a large swath of small players (the tail), and not much in between. The death of mid-range media publications is totally expected in this framework. For example, here’s a plot of newspaper circulation before the most recent downturn.

I expect a lot of those papers with 100,000 to 300,000 readers have already died.

But it’s not all bad news for news writers. The same Pareto distribution that drives 80% of the gains to 20% of outlets means that most value is created by a minority of writers. Those top writers could theoretically make way more than the measly 50–100k they command in traditional newsrooms.

The power law curve has other implications too. As Chris Anderson famously pointed out, its long tail leaves plenty of room for those who are willing to dampen their ambitions. There is tons of space for small writers who can either monetize indirectly, or who are content not to make writing a full-time job. Either way, business model development should help those at both ends of the curve. Let’s look at some monetization options.

Substack

The 20% of internet writers who account for 80% of the value at their publications may be a perfect fit for Substack. The platform provides free publishing, taking care of all the technical stuff that a newspaper would typically handle. It also allows writers to charge recurring fees for their work. Of course to really make it, a writer would need to draw readers themselves. This is where having a large online presence can be useful. Already Matt Taibbi (415k Twitter followers) has quit his gig at Rolling Stone to go full time on Substack. Now readers of financial and political news can pay him directly instead of his former bosses. At a smaller level, Eve Peyser (80K followers) has been able to write about whatever she’s interested in and get paid by loyal Substack supporters. With this kind of personal connection to an audience, a writer can build a lasting source of value and more importantly, harvest the majority of that value.

Patreon and Onlyfans

Subscription revenue isn’t the only business model for writing on the internet. Services like Patreon allow for all kinds of content and all kinds of monetization. Here’s a list of the top writers on Patreon in 2019. It spans authors selling chunks of novels, to advice columnists, to writers who have their own websites with interactive media.

More recently, Onlyfans has entered the fray as a new service for getting paid on the internet. The platform currently has a reputation for being used primarily by sex workers, but in truth, it supports any kind of content. Many types of artists have already started to share personalized content about their lives on the platform. Writers with an extrovert streak will likely do the same soon. Just as Snapchat was once considered an app for sexting, Onlyfans is now considered a platform for selling nude photos. I think that is likely to change and that attractive authors will soon leverage the site for additional income. Just as the real money in book writing is public speaking, the real money in news writing may be in personalized services. Podcasts and pictures, audio and video, both are better ways of getting paid than text on the internet.

Old-School Patronage

Rich people have a long history of supporting the arts through patronage. Today we have Jeff Bezos subsidizing the salaries of Washington Post reporters just as the Medicis of Florence once supported Rubens and other great painters. Besides Bezos, other nouveau riche like Marc Benioff, Chris Hughes, and Bill Gates have all tried to burnish their legacies by supporting aging news publications. I think it’s likely the internet will democratize this kind of philanthropy.

Services like Patreon are a good start, but they haven’t really managed to capture the full relationship between artist and patron. After all, painters who worked for the Medicis were expected to make dinner appearances. Today’s artists have no such vehicle for repaying their supporters directly. I can imagine a future service where the micro-rich can one day support the micro famous. Perhaps some day I’ll pay a famous TikToker a few grand to put me in one of their videos. I mean, I can already pay to get Lance Bass to record my voicemail for me. Why can’t I pay my favorite YouTube star to give me a shout out to show all my friends? For writers, special work could take the form of custom research in areas that patrons consider underserved. With more ways to interact with an audience in the passion economy, there will be more ways to generate real revenue.

Final Thoughts

As Yuval Harari would say, both fame and money are social fictions that only exist in the people’s minds. So why can’t internet famous media writers get paid? Why can’t they exchange one social fiction for another? I think it’s clear that this disconnect is real and begging to be solved. The recent venture capitalist vs journalist twitter war is an example of this Girardian split. VCs have billions of dollars but no recognition outside of the silicon valley bubble. Journalists and media influencers have fame but no real wealth. Both are uncomfortable with their enormous privilege and both could really benefit each other. Just as the usurers and financiers of old Florence could cleanse their conscience with renaissance art, so too can venture capital buy respectability with well-placed patronage. It’ll just take some time and creativity to make the market.