Deep Jive Interests

Its not very often you get to hear someone who has been successful in putting together a business using blogs (in this case a blog network), then sell it off for millions actually discuss blogs as a business.  Jason Calacanis, however, happens to be one of those guys.  Luckily, he’s a prolific blogger.
Jason Calacanis offers his opinions in an email interview with an undisclosed journalist over at his blog. One interesting quote:

The business model of blogging is highly sustainable because the costs are so low. Many blogs today, like Boingboing.net and TechCrunch, could exist forever because they are profitable businesses. The only reason to sell would be if the shareholders wanted to realize their investment.

Which, I think highlights one of the great “un” economics of the web2.0 — the costs to starting and running one of these enterprises is so low these days, what with essentially free software, low bandwidth costs and shrinking (free?) costs of storage that its really the content and purpose that separates them all.

But, as the article in the Pasadena Star (and my last blog post) clearly intimates – it can be a helluva lot of hard work. When it comes to “blogs as news”, Mr. Calacanis gives another pithy quote:

You work at a weekly magazine so you know how much pressure it can be to “put an issue to bed” every week. Working at a daily newspaper is even harder, and a wire service is harder than that. The blogging world is even more pressure than working on a newswire. In fact, I’d say the best analogy for working at a professional blog is working for CNN–the pressure never goes away.

Recently Mark “BlogMaverick” Cuban also posted a few thoughts on the issue of producing content as a function of “the Long Tail”. Like Mr. Calacanis, its a rare article looking at the mechanics of blogging as a business, not so much from a nuts and bolts “how do i install this plugin for wordpress” kind of way … but more of a strategic, content-producing effort at the 10 000 feet level sort of way. In it, he discusses how content producers never want to be part of the long tail — but part of the “vert ramp”, or basically the part which produces hits.

The first step is to actually produce enough great content to attract enough traffic to make a buck. What’s interesting is that in his opinion how important it is to actually have more than one “hit”.

The next step up the hierachy comes from breaking out at least once. You got paid enough for your work to think you or your company have a chance to create content full time. It may be a one time reward, or just the first of many rewards. But as long as its just one so far, you are still in the long tail. Still underneath the content ceiling looking up at the Vert Ramp, but at least you lost your financial virginity.

Also interesting is how he brings a “VC” approach to blogging as business — he feels that you eventually need monied concerns to bankroll and provide contacts for distributing your content to more and more sources. Whether or not this strictly applies to serving up content via blogs is debatable, but in his own words:

At this point, in order to fight through the content ceiling almost all content creators look to Big Money for help. Big Money is/are all the people and companies that control distribution and have big bank accounts. They are the people who can elevate the content creators from fearing their lights will be off when they get home, to buying a new house.

Being neither involved with Big Money, nor actually created content for a “hit”, I find myself supremely UN-qualified to offer any opinions at this stage. But if I WERE, I might argue that this sort of approach is more apropros with new multimedia (read: video) content producers than blogs per se.

My position — if I were qualified to have a position — would be that for blogs in particular as content producers it is probably unnecessary for any of them to require external funding. Properly grown, because of the “un” economics of the “business”, it is likely very easy to keep costs down while bootstrapping your way to success.

For web applications, particularly ones that serve video; or, video blogging, for that matter, bandwidth DOES cost money. Back of the envelope calculations often do lead into those ventures having a difficult time self-funding.

But for blogs, particularly because their raison d’etre is a very personal and unique insight and commentary … there seems something very self-defeating about accepting money for funding – particularly when VC’s want a piece of the business, and would therefore be in the position to change the voice and opinion of that blog.

In an age where “authenticity” seems to matter more andmore, one wonders if the principle of VC’s buying a piece of the bloggers business compromises what it means to blog in the first place.