HuffPo Will Lose a Lot More Than Money If It Doesn't Pay Talent

Not to Beat a Dead Horse, but Journalism Isn't Pro Bono Work and It's Not a Hobby. Just Ask AP's Tom Curley

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After my column a couple of weeks back about the Huffington Post -- specifically the fact that its co-founder, Ken Lerer, recently declared that it is not the blog's "financial model" to ever pay its bloggers -- I got a ton of feedback, including some from readers who thought I was unfairly picking on Arianna Huffington's news and opinion site.
Tell 'em, Tom! CEO of AP knows the value of sharing revenue with content creators.
Tell 'em, Tom! CEO of AP knows the value of sharing revenue with content creators. Credit: Michael Conroy
Blake Fleetwood (a HuffPo contributor himself), for instance, wrote a rather passionate open letter to the Romenesko media blog saying, "HuffPo is still losing money, as are most newspaper websites. For HuffPo to have paid their posters from the beginning would probably have doomed the experiment at its inception."

Look, I understand that it's costly to build an editorial franchise of any sort; I've launched several websites and other editorial products myself, and I understand the need to be frugal -- cheap, even -- during launch mode.

My point is simply that, long-term, the "We don't pay for content" mentality is not only insufferably arrogant, it's self-destructive.

Consider the case of news aggregator Moreover Technologies (and its parent company, VeriSign), which is being sued by the Associated Press for copyright infringement and misappropriation because Moreover's news-reader service "harvests" headlines and portions of AP stories to deliver to its paying subscribers -- but it doesn't pay anything to the AP.

"The Associated Press spends hundreds of millions of dollars every year gathering and reporting the news," AP CEO Tom Curley said on Oct. 9, the day his company filed suit. "We've done this for more than 160 years, often under tremendous time pressure and often at great risk to our journalists. When someone uses our content without our permission, they are free riding on our newsgathering."

Curley actually sounded not only offended but hurt -- like he'd been mugged -- and who can blame him? His point, the subtext of his statement, is important: Quality journalism is expensive, and if aggregator companies such as Moreover fail to share revenue with journalism practitioners, it's eventually going to drive journalism practitioners into the ground. And then who do you steal from, smarty-pants?

Glenn Fleishman, a technology columnist for The Seattle Times and a blogger himself ("The Unsolicited Pundit"), e-mailed me to point out that when About was sold -- twice, first by its founders to Primedia for $690 million in stock and then again a few years later for $410 million in a fire sale to The New York Times Co. -- "many About.com 'guides' [About's name for its content providers] were appalled. I don't believe they got diddlysquat beyond an ad split on their pages. ... It is clear as a reader that About.com's quality dropped enormously when people realized they had been taken for a ride."

HuffPo may not be profitable yet, but it has a significant stream of revenue from advertising, and it has a large and loyal audience. As a going concern, it is surely already worth multiple millions, but HuffPo's work force, its bloggers -- who, unlike About guides, don't get even a fraction of the ad revenue they help generate -- have no sweat equity in what they helped build. (For a politically liberal site, HuffPo sure seems willfully ignorant of American labor history, let alone contemporary standards of rank-and-file equity participation in internet companies.)

"But they're volunteers!" HuffPo defenders would point out. My point exactly: HuffPo's content-for-free policy eventually will backfire because, with no economic strings attached, the most talented bloggers will bail if they don't get a piece -- even an occasional nibble -- of the pie.

It comes down to this: The media industry must find a way to engineer financial models that don't redefine journalism downward as, well, a hobby or pro bono work.
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