"But I thought..." Hey, you thought wrong.

And so it begins.

I actually love to say "I told you so." For that moment, there is an immense amount of satisfaction in being right, in particular, about how to make money with the Internet - which then gives way to sadness when my admonitions actually come true.

In a recent article, several bloggers who, if we're to believe the writing/broadcasting of the subject in mainstream media, should be making millions, aren't really doing squat.

And they're actually giving up - quitting the blogging biz. It's not "new media," SAG's stupid "now media" or anything close. Sadly, it's "never was and never gonna be media" for them.

One guy, Dan Lyons, the writer whose "Fake Steve Jobs" column got him plenty of attention and plenty of talking head time on TV news shows, made a grand total of a little over a thousand dollars one month, his best month ever - but he needed the exposure of being outed as Fake Steve Jobs by no less than the New York Times to get anywhere near that kind of traffic, which translated into some ad dollars. He says he never made enough money to quit his day job.

And that wouldn't be enough for most high profile old media personalities to attempt tp become blogging superstars - and besides, aren't the Andrew Sullivans and Robert Scobles and yes, Dan Lyonses of the world supposed to be rolling in the Internet dough?

Isn't that the line that SAG's Alan Rosenberg and Membership First is feeding us about the future of the Internet and our creative work on it?

I know that people will say that an individual is different from a corporation, with their huge coffers and man hours and publicity engines. But I will repeat what I've said a hundred times: the Internet is far more likely to break your heart when you depend on it for a living, than bring you riches - especially when you count on exposure as your entry drug. If you think being eFamous will bring you riches, you're making the same mistake as individuals like Dan Lyons.

You're also making the same mistake that corporations like AOL, Yahoo, News Corp and Google have made - investing in entities that have had a lot of exposure-success, but not a smidge of monetary success.

The most famous example is the one that made Mark Cuban rich. He sold broadcast.com to Yahoo for something in the neighborhood of 5 billion dollars. Yahoo rebranded that room full of servers and software, which was really worth about $50,000 or so, ran it for a few years, then ran it into the ground, and shut it down. Buh bye.

And don't claim that Mark Cuban made his billions from the Internet - he made his billions by selling a stupid, delusional Internet-crazy set of Yahoo executives a room full of servers and software. Good for him.

We are making a lot out of nothing by claiming that the Internet is our salvation. We are making a huge mistake by placing a higher value on Internet production and distribution than it can possibly ever make. From blogging to podcasting to selling tangible goods to electronic delivery of media, the Internet alternately blows and sucks as a marketplace.

Even the big boys constantly teeter on extinction, and the little guys who talk starry eyed to me about "doing an online radio show and getting sponsors" eventually stagger out of the Internet cafe, punch drunk from the reality of how little money there is in a world where everyone wants everything for free, and have the audacity to push back on sponsorships as a part of the bargain.

The TV networks and film studios have been around for many decades, and over a century, respectively. Internet companies come and go in a matter of years, at most. AOL changed shape every few years, and went from a company that connected gamers together on their Commodore 64s to an email service for Apple Computer to a Mac-only online service to an information company making 10 bucks a month from 38 million users (if you can't make a business from a third of a billion dollars a month, there's something wrong, honey) to a free service making a small portion of that in ads to a shell of its former glory and is now on Time Warner's chopping block. All in the space of 20 years. Other Internet darlings have come and gone much, much faster.

Having said all that, there will always be exceptions to the rules, exceptions that others, unfortunately for them, look to as reproducible examples. Individual projects from famous people who haven't done anything in a while (Joss Whedon's Dr. Horrible) can grab a few million here and there. But it's nothing he could sustain. Eventually, the tragedy of the commons would come into play and his work would be pirated to the point where any money he made wasn't enough to sustain his interest. Just ask Stephen King. Or me.

Pay attention to the inevitable shakeup over the next couple of years, as shareholders, upper management and the bean counters will begin to weed out the programs currently touted as our future: Hulu, abc.com, the CBS Audience Network, even YouTube, FunnyOrDie and the like. If they don't start making serious money soon, the corporations that would seem to be best positioned to make the journey from investment to profitability will scrap those plans. They're not making any money. And they're not sharing any of the money they're not making with the people who are making their product - you.

And you might blame them, which would be wrong. Rather blame the audience, trained to steal and feel great about it, brought up with an insane sense of entitlement, and a total lack of respect for what it takes to make great entertainment. And blame yourself if you've gone from being an arrogant Grokster user to a Internet supastah wannabe and can't figure out why you're not eFamous and eRich.

Not that it can't be done. Individuals who have actually figured out a niche, many of whom I share regular emails and strategies with in a private online mastermind group, happily go about their businesses, making with very little effort, hundreds of thousands, even millions of dollars a year in creative online marketing endeavors. And they chuckle at the attempts at blatant and clumsy systemization of those strategies, cloddish attempts to re-create internet marketing success at will, in which the television networks and film studios are currently engaged.

That's the metric for success for them: can we do it? Can we make money? And most importantly, can we do it again? And again? And again?

Not on the current Internet they can't. Not unless some inevitable changes occur in their favor to limit piracy, ad blocking and the noise floor of everyone else in the universe looking for their piece of the Internet dream.

I'm not saying we shouldn't try. But we should severely modulate our expectations of and metrics of success. There are lots of opportunities, but very few will be popular, and even fewer will make any money, and almost none will make serious money.

SAG, are you listening? Do you care? I know Alan Rosenberg doesn't - he only cares about his own ego and will go down in flames. Of course, it won't be his fault when he writes his memoirs - it will have been the fault of naysayers like me, who despite our successes making money on the Internet, have a very healthy skepticism of any new venture or promise or process or system. I'm happy being pleasantly surprised when something I do online makes me a nice amount of cash. I'm also completely ready for most of those efforts to fail. That way I learn what not to do in the future - if the lesson even applies in the future.

I'd love to hear your thoughts on this, and would love to have you take the link for this article and twitter it, blog about it, tell me I'm full of crap or why you find this interesting. The discussion needs to happen now. Not later, when everyone will be saying, "But I thought..."

Comments

[Andrea]

I had a blog that commented about local entertainment and arts activities (Bay Area/Sacramento) and after 2 years, and not enough time to dedicate to it, I shut it down. I had regular subscribers and readers, people linking my blog to other blogs on the blogosphere, but it just became too much. Even with that, I signed up for Google's AdSense (just like your article mentioned) and found it a piece of crap. Most of my readers knew not to click the ads on the page (as many contain spyware) and I think I have a $1.50 sitting in my account.

Yet, did I start the blog to make money? Nope. I just did it with the idea to have a forum for my thoughts to be heard never expecting anyone to actually pay attention to them. Granted, it was local and never really gained national attention, but it was a labor of love for me that I eventually had to let go of.

The internet really isn't something tangible, though, so that's where I'm always skeptical about making money with it. For me it's a hobby. And if I ever return to blogging, that is what it will remain.

Thanks for the article! :)

[David H. Lawrence, XVII]

Andrea - settling for it a hobby is certainly an option for you - it's not for people that have decided to make a living at it, or not do it. As I am an actor, currently under the thumb of a litigious SAG leadership that certainly isn't interested in its actors plying their craft as a hobby, that's the perspective I'm writing from.

I appreciate your perspective, and thank you for reading and commenting on the post!

[Tim Carter]

Great post. I was fortunate to be in the audience when Barry Diller make the prediction that blogging would fail. He made this prediction back in October of 2005 as the first speaker at Google's first Zeitgeist.

What Barry said, and it made perfect sense back then, was that it was mathematically impossible for all those bloggers to get eyeballs each day. There simply was/is not enough time for people like you and I to read consistently 5, 10 or 20 posts per day. Many bloggers posts would get little or no traffic ever.

Some bloggers would get traffic as you wrote, but because the blog posts were not solving *real* problems of the readers, the advertisements in the blogs were of little monetary value.

Those people that are making real money on the Internet, and are flying under the radar, are solving thousands of problems each day. I know that for a fact.

[Hollywood Phony]

So where does this go? Doesn't this doom & gloom forecast have an end game? I'm not even saying I disagree with it, just that eventually the internet, as an entity, will lead to the destruction of old media. There's going to be nothing left to pirate, because, as you said, it's not so easy that any jerk with a camera can make anything that will be entertaining to more than 5 of his friends. At least not consistently, another theme of this blog. So in that sense, it seems like it's self-regulating, at least in the (very) big picture. I mean, what's the viable alternative? Without that, this is just really 'the end is near!' Or is that only privy to those in the internet mastermind club?

[Chris Knight]

Over the past year, it seems like everyone I talk to... hundreds and thousands of people are suddenly "Internet marketers."

Those who are giving up at creating real businesses on the Internet make it easier for those of us who are making real businesses work on the Internet.

Essentially, thank you to everyone who *gives up* as you reduce the 'supply' side of the market.

[Dee Baker]

Thanks for your take, David! I'm heartened to hear other actors who have a clearer view of the internet and don't fear the digital transformation of our business but rather view it as opportunity.

Those in SAG's now minority Hollywood Board rarely if ever mention piracy, free for view, or the actual numbers (or AFTRA's existing deal, for that matter). They have yet to convince me that they have any grasp of what is happening. In my view, they have never addressed this important issue in a serious and well thought out manner. They expertly undermine all of their own stated goals. I don't think they understand that the third person at the negotiating table are those who want and can easily get their content for free-- and how this is rapidly changing the ad model.

I was reading a bunch of stuff on Darwin yesterday that resonated for me in how I view the "Digital Shift" and professional actors and our unions: "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one the is the most adaptable to change."

I love that.

Dee
www.digitalmeteor.net

[Dee Baker]

"It is the one that is the most adaptable to change." Woops. Sorry Darwin.

[Isaac]

I think David is sexy.