So here's something. A couple of weeks ago, I received an e-mail intended to gauge my interest in being part of a panel discussion about raising money on the internet at a conference. In Florida! No, really, I am not kidding.
I wasn't simply plucked out of the crowd for this honor, that's just not the way these things work. Somebody knew someone else, and the first one in that short chain was someone who's been a longtime supporter of my basketball web initiatives. The conference representative's e-mail name-checked this person as a way of introduction, and it mentioned that I'd raised tens of thousands of dollars to pay for travel and that I'd managed to turn a profit with a paywall website, and who's my agent? There was something about a round-trip plane ticket and three nights' lodging, and you just don't throw that stuff around unless there's a timeshare exchange involved.
It was all quite flattering, but I'm not going to do it. I could have flatly turned them down because I'd never heard of the organization, but I didn't, or I could have told them that I don't do things like that because I'm afraid of crowds (that's not true, just ask anybody I went to college with). As it turned out, I just didn't get back to them.
Since then, though, I've thought about what words of wisdom and authority I'd offer about raising money on the internet -- and what I'd have to offer to a group of (presumably) paying listeners who would likely be subsidizing the panelists' travel expenses. After practicing my speech in my head a few times, I'm convinced they wouldn't like my advice. "First rule," I might have said. "Scare off or ignore most of the available market."
There is no better way to do that than with a paywall. Newsday found that out recently when they signed up only 35 people to their new $5-a-week web subscription plan. Because the newspaper's ownership paid $4 million to set up the new site, it's funny, as in Ishtar funny.
An inability to cover enormous prior expenses, for whatever reason, is always hilarious. But a website like YouTube, a subsidized subsidiary that loses hundreds of millions of dollars a year for its parent company, isn't a public punchline because end-users are too busy using it as a basic utility. I sometimes wonder if YouTube would be better off with a Newsday-style paywall.
Web traffic can be a liability. Well, at least massive, demonetized, hit-and-run traffic can be. The infrastructure costs for serving an endless stream of database-driven web pages, ensuring smooth datacenter operations, and guaranteeing perfect uptime can be incredibly significant... not as much as they were five or 10 years ago, but they're still very high. You can meet those costs with advertisements (like YouTube and Twitter are trying to do), or your an sell your customers' private data (like Facebook). Or you can scare people away.
Our pay-per-view basketball website gets 1.5 million page views a month. It would be many times that if it were completely free, and it would also lose lots of money if that were the case. Instead, a curtain comes down after five page loads. Less than one percent of visitors actually pay the 20 dollars for a year of access, but the people who do are the ones who actually, really want the information behind that paywall. And their purchase ensures that we'll be able to afford to continue to give it to them. The financial numbers are relatively small, but we've turned profits and paid out dividends to shareholders in each of the site's first three years.
I appreciate the cosmic justice inherent in the idea that popular success brings extreme liabilities, and that the humble (certainly not the meek) might indeed one day inherit the earth. Or rather, that millions of independent organizations will, constructed by those who have chosen efficiency over ego. This extends beyond economics, this being the Web, to all those who are content with being local heroes instead of pop stars.
I try to reflect that sensibility in my other, more literary basketball website, where I write thousands of words in thick paragraphs where hundreds might do elsewhere. The audience is relatively smaller as a result, but it tends to skew brighter and more educated, gifted with extended attention spans. So I haven't had any problems whatsoever with the kind of racist, over-zealously religious, bigoted, sexist, narrow-minded spew that giant sites like YouTube have to deal with on a regular basis.
Scareaway tactics.
With smaller entities, time is immensely valuable, and the wasted hours and psychic weight of anonymous, typo-filled hatred can definitely be filed as overhead expense. But then again, so can the time spent on image cultivation: interviews, appearances, general P.R. self-puffery and social media self-pimping. Time spent selling self is time not spent creating actual salable product, or getting better at serving audiences. (This also happens to be the secret behind the mysterious "sophomore slump.") The attention feels good, but it's a double liability -- for both now and for the future.
Which brings me back to that conference in Florida. Instead of "extending my brand," I'll be sitting here in Rhode Island, looking out my front window.
Just beyond the first couple rows of houses is a cluster of small Pawtucket businesses, many of which are over a generation old. There's a high-volume laundromat, a barber shop, a credit union for city and state employees, a golf supply store, and an auto maintenance shop that specializes in Saabs. They're all doing well, despite the economic downturn, even despite the fact that I don't do any business with most of them. And they don't care, and they don't unnecessarily chase my business. They keep doing what they do, catering to their niche markets, making their modest profits. Once the web catches on to that dynamic, things will be just fine.
