Tuesday, October 11, 2005

The Economics of Blogging-- 1 of 2

Here is a series of articles on the economics of blogging. Basically, how feasible is it for companies and individuals to blog? Is there an incentive to blogging? Is this a trend or a fad? Is it going to be possible to generate a significant amount of revenue as a result of blogging? Is there going to be enough money left for the rest of us trying to get a slice of the economic pie?
These are some of the questions I will attempt to address in the next few posts...
Stay tuned!


...Everyone who follows blogging wonders about the economic model. Do bloggers need to be paid in order for blogging to be sustainable? If so, then who will pay them?

In the simple circular model that I sketched, the blogging system as a whole has value. However, no individual blog is the source of that value. I believe that this collective nature of the benefit of the blogging system is what makes it particularly difficult for an individualized economic model to be successful. Thus, I believe that neither the donation model nor the advertising model will prove to be viable (there may be some transitory exceptions). Instead, I think that payment mechanisms that reward collections of bloggers hold more promise for the long run:
Corporations, nonprofits, and government may come to expect their employees to maintain blogs as part of their jobs. Some of these blogs may be made available externally as well as internally.
Traditional news organizations may pay for a network of bloggers to help in the news filtering process, although blogging will not replace all of the other forms of communication and entertainment in the news media.
Some organizations may use paid bloggers to replace some of their publications. For example, the American Contract Bridge League could give its members access to professional blogs, rather than mailing out a print publication. For that matter, the American Economics Association could do the same.
I sketched a model of blogs in which blogging serves as a filtering mechanism in the dissemination of information. The model is built on assumptions that make blogging very efficient. To the extent that those assumptions mirror reality, then blogging is not a fad. On the contrary, it could have a lot more potential for growth.
Comments: Post a Comment