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Juggling the NYTimes Business Models

Between reading John Darnton fiction about the demise of the NYTimes and the thoughts attributed to Times Esecutive Editor Bil Keller, I am constrained to keep talking about what I believe to be the only viable solution longterm to supporting an economy which is increasingly dependent of “The Web” for revenue.

The two business models attributed to Keller are

1. A nonprofit model which would make the Times essentially dependent on the largesse of both readers and philanthropy — AKA foundations.

2. Charging readers of the online version in some form or fashion.

SOURCE

Both of these ideas have merit. The first would turn the Times into a Public TV sort of model in which this series might be brought to you by the Annenberg Foundation or General Electric. The second would be biting the bullet and seeing just how many would actually pay up to read Nick Kristof and David Sanger and Katharine Q. Seelye and so forth.

I think both have flaws. The first assumes that the current established structures will continue to have resources to support the likes of the Times.  That’s shaky. The second is an open invitation to all manner of piracy. Note that music will ultimately make its living online but that most music remains pirated or shared depending on your POV. Pirating the paid NYTimes would create a conflict, not a profitable enterprise.

The failsafe answer is already a model in one place or another and should be considered as a better alternative for ALL creative content on the Web. Face it, that is where everything will be. Including any currently healthy offline print media. The houses are falling and it is really a predictable collapse.

The answer lies in a royalty system that rewards all diligent entities and persons who spend time and energy posting content to the Web. The NYTimes is right up there because it pays reporters around the world to do serious digging and seeks with middling success to offer salient commentary as well. Its royalties would be based on its traffic plus its salience, judged by some acceptable standard. Income would be funneled through ISPs and distributed according to an accepted formula.

Under such a system even folk as low on the totem pole as I could be paid for what I now do for free. Even commenters could get paid. People who merely copy material from other sources could be identified and receive considerably less than those sites where a post originated. In short the Web could do what its technology is best at, crunching numbers, organizing things and distributing micro-amounts so that every user would ultimately be paying for what he or she actually uses.

The way to operate this would be to exclude profitable business plans from this largesse. If Netflix or Napster manages with their pay plans there is no reason to pay them more.

Once this financial floor was accepted and ISPs apportioned a segment of their revenues to a paying entity, all of the other business models would be able to function alongside this. And those who would prefer not to mess with advertising and philanthropy would have a nice alternative — user supported content payment.

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Ten Reasons Brilliant Compensation Is Not Brilliant Any More — Updated

Revised 28 August, 2008

1. Brilliant Compensation is an honest representation of the idea of building pyramid of workers with you at the top.

2. The idea is that you can, by some method of recruiting, create an army of workers UNDER you. The problem is that not every one can and that the resulting downlines require constant work to keep alive the notion that they can actually make a living in whatever the business is.

3. Every business I was ever in that modeled itself on Brilliant Compensation had people upline from me selling leads.

4. Upliners selling leads is a sleazoid business tactic and should be a red flag to anyone who is offered leads by their upline — or by the “opportunity” itself, for that matter.

5. Most Brilliant Compensation businesses (most MLMs that are operating online) require you to buy something even if they say they do not. Most require that you purchase either a) more product than you need or b) products for which you have little personal use or c) education that you can most likely get for free online with a bit of initiative.

What is Brilliant Compensation? Presumably the income you get for promoting the business to your downline. You are paid according to one of a number of compensation plans. The most seductive and the least likely to bear fruit over time are those which pay you when you add someone to your group. Often compensations plan change. I have known serious MLM workers who were essentially ruined when the plan changed.

6. Most compensation plans reward experienced networkers who have the skills needed and the time will to give full time and more to their enterprise. It goes without saying that this group is tiny in comparison to those who are brought in and led to believe promises of similar success. “You have to spend money to make money.”

How much do you have to spend on leads and other business necessities before the truth kicks in?

You are, at best, going to earn vastly less than you thought when you read promises of a full time income. At worst, you are going to say Sayonara to some of your expendable income or the savings you wagered on the hype you were given.

7. Brilliant Compensation was made to order for an Internet Audience several years ago. It is now entirely out of date.

Most showings of this famous Harvard-evoking “movie” seek to support the notion that you can build a home business, complete with an army of willing workers you recruit. Or, lately. workers placed under you for a price.

Enter the famed triad — leads, email ads, autoresponders.

Wow. All that. Hello?

Email marketing, even for the people who know how to do it, is not a winning venture. Some will argue to the contrary, but people who are well out of it admit to their losses honestly.

8. Brilliant Compensation is for more than 90 percent a pipe dream.

It assumes, like Frank Lloyd Wright, that people are very different than they actually are. Wright envisioned suburbs, believing everyone would have a little farm and plant their own garden. He drew the first interchanges of our strangling highway culture. We now have disfunctional metro sprawl filled with couch potatoes, broken marriages, bored children and vehicular traffic that helps poison the air we breathe.

Online we have a legion of confused souls who know, by now, that everything they are likely to touch in the way of an opportunity will turn to stone.

9. The only truly Brilliant Compensation is an inherently sound system for generating income.

One such system is product-based capitalism.

Another is product-based advertising, the very source of most of the revenue made by our communications industries and media.

Many of us who cut our teeth on MLMs and similar programs in the late 1990s ended up in a few programs built on cash-cycling premises. The pejorative word for such programs was and remains Ponzi schemes. The advent of Bernard Madoff has made Ponzi anathema as a concept. The simplest answer I can give to those who wonder if there is a prayer that such money cycling schemes can work is no. At one point I felt differently. I believed that if an enterprise could raise capital from a broad constituency and use it to create even more wealth, there was hope of attaining results that defied normal notions of a return on investment.

My experience was that there were systemic, technological and human reasons for the failure of these efforts. Rather on the same principle that calories in require more calories out to result in weight reduction, a money in money out system that promises an outlandish return is bound to falter over time. The technology needed to actually deal with the numbers that would flood to such an opportunity is well beyond the capacity of persons who might create it. Once this became obvious the best will in the world could not prevent the business from failing. At every point in this situation human limitations kick in.

In one case I remained in such business I felt it was unable to maintain its commitments. At that point I resigned and made my resignation public. In another case I and everyone else took losses when the business simply came to an end. The lesson was learned.

Far be it from me to suggest an online alternative to Brilliant Compensation.

10. I could go on and on, but I want to end with phone culture. Nothing is more demeaning to me than the idea of calling someone on the phone and reading a script. I have dehumanized myelf by this route to Brilliant Compensation.

It is probably the most bothersome aspect of the whole MLM ritual. I am happy to be out of it.

One final note. The U.S. Social Security system is Ponzi-like because money in is used to pay people now and there is no guarantee that it will be there to pay those who put it in today for some far off future. But there remains no substitute for the development of what can be called real rather than brilliant compensation. That would be compensation for services rendered (or goods created and sold) that creates profit and some willingness of those who succeed to aid those whose returns are, for whatever reason, inadequate to maintain themselves.

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