Thoughts on LJ: random teal deer
In the post here:
http://community.livejournal.com/lj_2008/3846.html
among all the rest of the news and commentary are three items that have people talking and caught my attention (and that takes some serious doing these days -- I promise you.)
Open questions:
Revenue sharing - Should users be rewarded for their content and contributions? Advertising - What are the best ways of integrating commercial opportunities (for both users and brands) into LiveJournal? Subscriptions - Should moderators be able to charge for access to closed communities?
The second item, I'm less concerned about because anyone who doesn't think LJ (and other for-profit journaling sites) aren't out to maximize their bottom line, really hasn't been paying attention -- not just to the upheavals at LJ but elsewhere on the webs. Making money off user-generated content is the new economic frontier, and very much like ad placement on "free" broadcast television channels, we've got a few years ahead for business and service providers tossing all kinds of ideas and marketing forays and demographic studies at us while they figure out to make money. In the USA, the taxpayers may own the airwaves, so to speak, but they don't own the content, and the licensing fees the media companies pay to lease those airwaves don't cover the costs of production of content.
Advertising, however, is indirect profit. The other two items in that list are more direct, and in some ways (to me at least) may appeal to a kind of baseline desire to be paid for what you produce. That in and of itself isn't a bad or good thing; it just is. Whether the currency of exchange is actual cash or swap of goods, or good will and praise, or credit for services yet to rendered, the basic terms and drives of exchange aren't unique to LJ or the web.
Concerns raised about the other two - Revenue sharing and Subscriptions - aren't actually necessarily issues for the larger userbase of LJ, where original content (as opposed to derivative) might reside. Fannish users hold a different view of the issue, because the stated goals of the OTW aside, the legal issues for fans are still, as far as I can see, still centered around the fair-use qualifier of being "not-for-profit" or not for direct profit. There may be profit of some sort, but by and large no individual directly profits from fanworks, or do so in such a limited fashion as to not be an economic challenge to original content creators (be they media companies, contracted writers, pro authors, or musicians). Yes, there are outliers and individuals who routinely challenge that aspect of the fannish hive-mind that states we "intend no infringement, and make no profit",.
That said, I don't think the subscription model will fly if only because as so many before have realized, there's little incentive to pay when so much free content -- and free forums -- are available. I think it would require that such comms have significant amount of unique and desirable content and that's difficult to come by or build to the point where people would be willing to pay for a subscription to a locked comm as opposed to going out and creating a similar, free comm elsewhere.
I think a bigger problem is them floating the idea of paying users for content -- revenue sharing -- which might turn out to be more a de factostatus if they do it and where people -- even those generating content that is possibly infringing might take the money and run without actually thinking about it, the way some archives or fansites take ad revenue. Ostensibly, the revenue pays for the maintenance of the site, but I think there's been posts in the past about how the ad revenue from a site like fanfiction.net may far exceed what could be considered reasonable site costs. It's entirely possible that LJ could, on accounts that are Plus, return revenue to users in the terms of site credits (although ultimately, you'd think it would be self defeating --credit enough to upgrade to a paid account would reduce the ad revenue stream and ostensibly, the site credits.)
But still, even such a plan (revenue or credit for page views) for a comm like supernaturalfic or spnnewsletter or some of the bigger HP sites would put the fannish operators in a dicey situation -- not so much for non-fan comms though.
It's perfectly reasonable for fans to be concerned with fannish spaces, and to want to protect them, and as with the whole FanLib debacle, to be wary of anyone and everyone who wants to make a profit form fanworks even if they offer to share the profit, but in the larger terms of LJ as a for profit business and despite the credible numbers that showed up on fandom_counts, and the high number of fannish users who pay for their accounts we're still only a fraction of the revenue that keeps LJ up and running -- how much of a percentage we represent I have no idea, but my admittedly casual assumptions about fan bases, and percentage of paid users versus free (even with Plus accounts) makes me think we are notable but not necessarily a majority of the user base and chances are not even close. I think someone did a break down that people who have paid accounts (as opposed to Plus or Permanent) average about $0.05 a day for usage.
The current tally at fandom_counts is 35,114. And that's journals, not necessarily paid journals. The upward count of actual LJ users (from the info page) is at 13 million. Assuming half those journals are paid (and I'm using my own usage as a baseline. I have several journals and comms, both paid and unpaid) that would indicate that conservatively, fans collectively provide $837.00 of revenue a day or $26,000 a month, which is significant but in terms of business, that roughly equivalent to the salary of one not-very-well-paid full-time employee a month. And that is an offset cost, not profit, (and just from subscription fees) . I have no idea what the month to month operating costs for LJ are, but I wouldn't be surprised if it topped a million dollars a month when you take in structural costs (servers, building leases, back up systems, power) and personnel costs (salaries and benefits of paid employees).
Set that against the other 13 million users and using the same formula, the rest of the use base creates $324,122.00 of revenue a day, even if you cut that to a quarter (assuming fans are more likely to pay for their journals) that's roughly $16000.00 per day or approximately $482000.00 per month. Even a tenth of that is still significantly higher than what identified fans can provide. (and seriously, check my math. I suck at it, but it seems a pretty easy calculation).
But, wait, you say! There are more fans on LJ than that! With multiple journals! Which may well be true, but the number is up for debate and even if there are upwards of a hundred thousand fannish journals on LJ, all paid, we're still just a single percentage point of the potential revenue stream for LJ the business.
And I point this out, not to make fannish contributions to LJ look insignificant but to point at that if LJ wants to entice more users to LJ, and not necessarily just fannish ones, revenue sharing and possible comm subscriptions isn't necessarily a bad way to go about it. I still think the subscription model will fall on it's face, but the revenue sharing, even if for site credit? Isn't actually an immediate turn-off for the majority of LJ users. Fans, by necessity, approach it differently -- but recognizing revenue from user-content is the way most sites are trending, and the advertisers are not really waiting to see how much of return they can get before jumping in.
So, the actual problems for fans is, if everyone (non-fans) are able to recognize revenue or even profit from LJ because of this issue, how do we avoid being pulled in willingly or no. Allowed to opt out? Resist the temptation to pull in a few bucks for the hours we spend creating content and community. I mean, wouldn't it be to cool to actually be able to offset that $19.95 per year fee, and get more features just from doing what we're doing? It's not like we'd actually be making enough to pay rent or mortgage or get more than a couple of cups of coffee at Starbucks. That's not profit, its merely compensation for services rendered. It's a thank you from the service provider for being good customers, right?
The facts on the ground are this:
LJ is a business. It's business model is to make revenue and profit from user-generated content. The more users and more content, the bigger their profit margin.
Fans are only a small percentage of the user-base. Present, Active and Vocal, yes, but still a small percentage.
Fans, by and large, don't seek to make monetary profit from their work. However, fans are not averse to other kinds of recompense, or necessarily, universally averse to covering their own costs by recompense either monetary or in terms of what they consider an even trade.
And that last point is where fans may run afoul of their own ideals. How likely it is for LJ to actually go that route is completely unknown, but looking at it from a business perspective, it's not necessarily a bad plan for the future of LJ. It could be potentially bad for fans, but it's not dilemma LJ, as a company should or can resolve for us. It's not LJ that has to decide for us how we approach the "not-for-profit" aspect of fannish behavior. Nor is it actually a point where fandom, collectively, is going to suddenly be in accord and all follow the same route, hold the same views, or come to the same conclusion.
In case anyone was wondering, I'm not advocating anything. I merely pointing out that railing against LJ for being what it is -- a business -- is a waste of energy. (Which isn't to say, commenting on how they run their business, or how they deal with their users, isn't a separate but related issue. As paying customers, requiring good service is a consumerist obligation as far as I'm concerned, or you know, take your business elsewhere.)
But seriously, if LJ offered to pay the annual fee for supernaturalfic, which I'm paying for out of my own pocket as a community service, given my own financial situation at the moment, I'd be tempted.
Mostly, I find that removing myself from the temptation is usually the better course. I find it slightly ironic that the reason I may finally quit LJ and go elsewhere isn't because of service, but because the potentials is there for them to offer to pay me for doing what I do.
This post is not f-locked. Link at will.
http://community.livejournal.com/lj_2008/3846.html
among all the rest of the news and commentary are three items that have people talking and caught my attention (and that takes some serious doing these days -- I promise you.)
Open questions:
The second item, I'm less concerned about because anyone who doesn't think LJ (and other for-profit journaling sites) aren't out to maximize their bottom line, really hasn't been paying attention -- not just to the upheavals at LJ but elsewhere on the webs. Making money off user-generated content is the new economic frontier, and very much like ad placement on "free" broadcast television channels, we've got a few years ahead for business and service providers tossing all kinds of ideas and marketing forays and demographic studies at us while they figure out to make money. In the USA, the taxpayers may own the airwaves, so to speak, but they don't own the content, and the licensing fees the media companies pay to lease those airwaves don't cover the costs of production of content.
Advertising, however, is indirect profit. The other two items in that list are more direct, and in some ways (to me at least) may appeal to a kind of baseline desire to be paid for what you produce. That in and of itself isn't a bad or good thing; it just is. Whether the currency of exchange is actual cash or swap of goods, or good will and praise, or credit for services yet to rendered, the basic terms and drives of exchange aren't unique to LJ or the web.
Concerns raised about the other two - Revenue sharing and Subscriptions - aren't actually necessarily issues for the larger userbase of LJ, where original content (as opposed to derivative) might reside. Fannish users hold a different view of the issue, because the stated goals of the OTW aside, the legal issues for fans are still, as far as I can see, still centered around the fair-use qualifier of being "not-for-profit" or not for direct profit. There may be profit of some sort, but by and large no individual directly profits from fanworks, or do so in such a limited fashion as to not be an economic challenge to original content creators (be they media companies, contracted writers, pro authors, or musicians). Yes, there are outliers and individuals who routinely challenge that aspect of the fannish hive-mind that states we "intend no infringement, and make no profit",.
That said, I don't think the subscription model will fly if only because as so many before have realized, there's little incentive to pay when so much free content -- and free forums -- are available. I think it would require that such comms have significant amount of unique and desirable content and that's difficult to come by or build to the point where people would be willing to pay for a subscription to a locked comm as opposed to going out and creating a similar, free comm elsewhere.
I think a bigger problem is them floating the idea of paying users for content -- revenue sharing -- which might turn out to be more a de factostatus if they do it and where people -- even those generating content that is possibly infringing might take the money and run without actually thinking about it, the way some archives or fansites take ad revenue. Ostensibly, the revenue pays for the maintenance of the site, but I think there's been posts in the past about how the ad revenue from a site like fanfiction.net may far exceed what could be considered reasonable site costs. It's entirely possible that LJ could, on accounts that are Plus, return revenue to users in the terms of site credits (although ultimately, you'd think it would be self defeating --credit enough to upgrade to a paid account would reduce the ad revenue stream and ostensibly, the site credits.)
But still, even such a plan (revenue or credit for page views) for a comm like supernaturalfic or spnnewsletter or some of the bigger HP sites would put the fannish operators in a dicey situation -- not so much for non-fan comms though.
It's perfectly reasonable for fans to be concerned with fannish spaces, and to want to protect them, and as with the whole FanLib debacle, to be wary of anyone and everyone who wants to make a profit form fanworks even if they offer to share the profit, but in the larger terms of LJ as a for profit business and despite the credible numbers that showed up on fandom_counts, and the high number of fannish users who pay for their accounts we're still only a fraction of the revenue that keeps LJ up and running -- how much of a percentage we represent I have no idea, but my admittedly casual assumptions about fan bases, and percentage of paid users versus free (even with Plus accounts) makes me think we are notable but not necessarily a majority of the user base and chances are not even close. I think someone did a break down that people who have paid accounts (as opposed to Plus or Permanent) average about $0.05 a day for usage.
The current tally at fandom_counts is 35,114. And that's journals, not necessarily paid journals. The upward count of actual LJ users (from the info page) is at 13 million. Assuming half those journals are paid (and I'm using my own usage as a baseline. I have several journals and comms, both paid and unpaid) that would indicate that conservatively, fans collectively provide $837.00 of revenue a day or $26,000 a month, which is significant but in terms of business, that roughly equivalent to the salary of one not-very-well-paid full-time employee a month. And that is an offset cost, not profit, (and just from subscription fees) . I have no idea what the month to month operating costs for LJ are, but I wouldn't be surprised if it topped a million dollars a month when you take in structural costs (servers, building leases, back up systems, power) and personnel costs (salaries and benefits of paid employees).
Set that against the other 13 million users and using the same formula, the rest of the use base creates $324,122.00 of revenue a day, even if you cut that to a quarter (assuming fans are more likely to pay for their journals) that's roughly $16000.00 per day or approximately $482000.00 per month. Even a tenth of that is still significantly higher than what identified fans can provide. (and seriously, check my math. I suck at it, but it seems a pretty easy calculation).
But, wait, you say! There are more fans on LJ than that! With multiple journals! Which may well be true, but the number is up for debate and even if there are upwards of a hundred thousand fannish journals on LJ, all paid, we're still just a single percentage point of the potential revenue stream for LJ the business.
And I point this out, not to make fannish contributions to LJ look insignificant but to point at that if LJ wants to entice more users to LJ, and not necessarily just fannish ones, revenue sharing and possible comm subscriptions isn't necessarily a bad way to go about it. I still think the subscription model will fall on it's face, but the revenue sharing, even if for site credit? Isn't actually an immediate turn-off for the majority of LJ users. Fans, by necessity, approach it differently -- but recognizing revenue from user-content is the way most sites are trending, and the advertisers are not really waiting to see how much of return they can get before jumping in.
So, the actual problems for fans is, if everyone (non-fans) are able to recognize revenue or even profit from LJ because of this issue, how do we avoid being pulled in willingly or no. Allowed to opt out? Resist the temptation to pull in a few bucks for the hours we spend creating content and community. I mean, wouldn't it be to cool to actually be able to offset that $19.95 per year fee, and get more features just from doing what we're doing? It's not like we'd actually be making enough to pay rent or mortgage or get more than a couple of cups of coffee at Starbucks. That's not profit, its merely compensation for services rendered. It's a thank you from the service provider for being good customers, right?
The facts on the ground are this:
LJ is a business. It's business model is to make revenue and profit from user-generated content. The more users and more content, the bigger their profit margin.
Fans are only a small percentage of the user-base. Present, Active and Vocal, yes, but still a small percentage.
Fans, by and large, don't seek to make monetary profit from their work. However, fans are not averse to other kinds of recompense, or necessarily, universally averse to covering their own costs by recompense either monetary or in terms of what they consider an even trade.
And that last point is where fans may run afoul of their own ideals. How likely it is for LJ to actually go that route is completely unknown, but looking at it from a business perspective, it's not necessarily a bad plan for the future of LJ. It could be potentially bad for fans, but it's not dilemma LJ, as a company should or can resolve for us. It's not LJ that has to decide for us how we approach the "not-for-profit" aspect of fannish behavior. Nor is it actually a point where fandom, collectively, is going to suddenly be in accord and all follow the same route, hold the same views, or come to the same conclusion.
In case anyone was wondering, I'm not advocating anything. I merely pointing out that railing against LJ for being what it is -- a business -- is a waste of energy. (Which isn't to say, commenting on how they run their business, or how they deal with their users, isn't a separate but related issue. As paying customers, requiring good service is a consumerist obligation as far as I'm concerned, or you know, take your business elsewhere.)
But seriously, if LJ offered to pay the annual fee for supernaturalfic, which I'm paying for out of my own pocket as a community service, given my own financial situation at the moment, I'd be tempted.
Mostly, I find that removing myself from the temptation is usually the better course. I find it slightly ironic that the reason I may finally quit LJ and go elsewhere isn't because of service, but because the potentials is there for them to offer to pay me for doing what I do.
This post is not f-locked. Link at will.