Denton: Evil genius or just plain evil?

If you’re any kind of online publisher — a traditional outlet looking to learn about online media, or a blog network looking to grow — you could do a lot worse than to follow the career of Nick Denton, a former traditional journalist (or at least the British version of same) who has become a new-media mogul thanks to the Gawker Media network of blogs. Nick has been conducting a kind of ongoing media workshop for the past couple of years, right out in the open (more or less). In the latest installment, the Dark Lord of the blogosphere has chopped the pay rate for bloggers at Gawker, for the second time in the last six months.

It’s not quite as bad as it sounds, however. Since the beginning of 2008, bloggers at the various Gawker properties — the flagship celebrity-obsessed blog, geek oracle Gizmodo, gossip rag Valleywag and so on — have been paid in part based on the traffic their posts attract. But that’s not their only pay; they still get a salary. The traffic-based payment is effectively a bonus — an incentive program (although whether it encourages bloggers to go for the cheap and titillating is the subject of debate). In other words, bloggers have to “earn back” their base salary first, and then whatever traffic they get after that is a bonus. And even with the cuts, Gawker bloggers still do pretty well.

What Denton has done, according to the Radar story — which happens to have been written by Choire Sicha, the former editor of Gawker — is to cut the bonus rate to $5 per thousand pageviews, from $6.50. And that previous rate was itself a reduction from the original rate of $7.50 per thousand (all of the Gawker blogs have their own rate structure, but all have seen reductions). Felix Salmon at Portfolio has an excellent overview of the situation and the ramifications of the latest pay cut.

Among other things, he also notes that some Gawker bloggers appear to be doing extremely well, and could easily be making six figures. Others are doing, er… less well. If you want more background, Felix has written a number of other posts about it, and I wrote one as well at the time of the last pay cut. There was also a fascinating discussion of the psychological and practical effects of Denton’s compensation model over at the Crooked Timber blog.

In many ways, what Gawker is doing isn’t really all that different from what brokerage firms do, or any type of sales-oriented organization, which pays people commission based on what they bring in or the revenue they generate. We don’t like to think of the media as being based on such crass considerations, but in a way it always has been — it’s just usually hidden from view. That said, however, as a friend of mine once told me, you have to be careful when implementing that kind of “direct drive” compensation. In other words, you have to think about what kind of behaviour you are rewarding. And Felix makes the point that the way Nick has gone about can in many ways actually be de-motivating instead of the opposite.

Update: My friend Jay Rosen, NYU journalism prof and founder of NewAssignment.net, said in a Twitter message that he would feel better about Denton’s approach “if he figured out how to pay writers more when posts perform well in search over time.” That’s an excellent point. I think it would also be good if Nick’s model compensated writers based on some metric of reader loyalty — return visits, etc.

That way, bloggers would be encouraged to build a following rather than just chasing pageviews. Felix notes in a comment here that in a sense Denton’s model already does this, since pageviews are rewarded regardless of when they occur — but I think it might be even better if Nick were to explicitly change the rate so that pageviews for older posts, or traffic from repeat visitors, were to figure more prominently in the compensation scheme, although I’m not sure exactly how to do that. That’s why Nick gets the big bucks 🙂

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