Tuesday, October 5, 2010

Fluffy Bunny's Adventures in Internet Content Monetization!

There is always a lot of buzz in the online community about content monetization. It's become a trope in parodies of "social networking gurus" (like this one), but it still poses a pretty real problem for people who make things on the Internet. You may not have heard the term, since it doesn't always go by that name, but people are often talking about how to make money off of the things they put on the web.

Here's a sort of illustration of the problem. Say you run a web-cartoon called "Fluffy Bunny." You make animated videos of the bunny being adorable and silly, and you write stories about the bunny. You're so into your Fluffy Bunny creation, in fact, that you sometimes make little felt Fluffy Bunnies and decorate your desk with them. Now, others seem to have taken to Fluffy Bunny, and a bunch of people watch your cartoons and read your work.

The next question is: how can I turn those viewers into enough money to let me quit my job as a desk-jockey and just bask in the loving glow of Fluffy Bunny? Well, you do have options, but some of them aren't obvious.

The scope of the problem isn't immediately evident to those that primarily do business (and therefore perceive of "business") via off-line models. Scott McCloud attempted to encapsulate the most common current models for internet content monetization as selling either atoms or eyeballs (he discusses this here). Selling atoms is taking money in exchange for physical goods, and selling eyeballs is selling to a third party the guarantee of people looking at a certain space. In the traditional, IRL sense, the former is selling shoes at a show store, and the latter is selling ad space on billboards.

These models are actually surprisingly resilient, too. They remain accurate when talking about television, for instance (selling DVDs vs. selling ads during shows). They even remain accurate when applied to the internet in a variety of cases (selling a printed collection of comics via the internet vs. selling ads on a web comic's page). You could even put adds on TheAdventuresOfFluffyBunn.com, or you could sell a DVD of Fluffy Bunny's exploits.

As the internet changes, though, there are new, creative monetization schemes cropping up on the internet as well. Let's explore some variations on McCloud's "eyeballs and atoms" dichotomy.

Selling atoms on the internet gets complicated quickly. For instance, in the realm of web comics, people are still selling actual atoms as t-shirts using their comic characters' likeness or printed collections of comic work. This is still a reliable way to make money and is a big part of most of webcomics artists' arsenals. But comics creators are experimenting with a new approach to selling atoms on the internet, what McCloud calls selling bits.

Some examples: James Kochalka has a daily web comic, and for a while, you couldn't see all of the comics unless you subscribed, for a small fee. Gordon McAlpin sold a high-resolution eBook of his popular "Multiplex" series. Various comics creators make custom comics for money, their quality varying directly with how much a buyer pays.

In short, you are paying either for custom online content or for access to online content, like a subscription. In all of these cases, the "atoms" are purely online content, pure bits, but the money is still real money. The atoms approach, therefore, shows signs of adapting. These models exist, but they aren't often used as permanent solutions (Kochalka now makes all of his strips available for free, and McAlpin released an actual printed book.)

The "eyeballs" portion of the discussion is a bit more complex. People are certainly still coming up with clever ways to sell ads (anything from simple link exchanges to networks for bidding on ad-space). These all work for bigger creators, but a new breed of social media creates a new wrinkle in the eyeballs model.

Think of sites like YouTube. They let anyone post videos onto their network, and they host and display them for free. But anyone that visits your posted content also sees ads posted by YouTube themselves. The size of YouTube's network makes it possible for them to create nothing, but still offer "eyeballs" to ad servers. They use others' content to draw in those "eyeballs" then sell them to third parties. (In some instances, YouTube's partners get this ad revenue, but in a lot of cases, it goes straight to YouTube.)

It's a good model for YouTube, of course, but it's important to keep in mind that those ads are not paying for content, but merely the way the content is presented. It's a model that many sites have all tried, and the most current word is that this model isn't making them enough money to remain profitable. It's a model that doesn't feel sustainable. (In a spirited and informative interview on The Colbert Report, Lawrence Lessig briefly commented on this "monetizing someone else's content" model, but Lessig notoriously focuses on the really great societal and policy implications without really acknowledging the financial or logistic pitfalls.)

The final method of turning creativity on the Internet into revenue is probably my favorite, because the trade that is actually happening is not immediately evident. The website Kickstarter offers creative people and people with visions to set up pitches to the public for their visions. People can then view the pitches and pledge money to these works. The pledge often comes with an "atoms" reward (supporting a book gets you a copy of the book, for isntance), but other rewards include having your name on a "credits" web page or, in some extreme cases, musicians offering personal concerts in your own home for you and your friends in exchange for large contributions. And it works, too; the aforementioned Gordon McAlpin turned one such campaign into a print book (the book, by the way, is really great).

This one's really interesting, because having your name in a book is certainly neither atoms nor eyeballs. It's not even bits. It's something more ethereal, but also more personal. Call it connection to creative people, call it feeling good about yourself. It's a way for people to turn their money into things they want to see happen and into support for projects they like. Things like Kickstarter truly display how monetizing your efforts on the Internet can be an entirely different endeavor than in any other medium. It turns purchasing into participating.

And these aren't all of the examples. But they show how sticking to old models, while it offers some modest successes, doesn't really harness the truly unique character of the Internet. Creators working with purchasers to offer things people want is how markets have always worked. But only now can creators interact directly and personally with their customers to truly tailor the market experience.

You'll notice that this post doesn't really propose answers. The goal is really just to get a lay of the land in online advertising and start talking about which of these things are working. I hope to have new posts about this topic in the future. But the bottom line is that, with a little ingenuity and adaptation, the days of the Internet bubble-burst can be behind us, and Fluffy Bunny can maybe start to become the Cash Cow you always hoped it would be.

(image: David Barrie's "Don't get left in the dark.")