Can We Really Make Money Online?

Quote of the Day: "Most people are too busy earning a living to make any money." -- Anonymous

The Internet is still the wild frontier where anything is seemingly possible, but the rules are being made up as everyone goes along. We seem to be at a nexus for online communication. Is there anyone who isn't blogging or social networking? Doesn't it seem like everyone is getting content online, from music and videos to news and games? Everybody seems to have a Web site -- from the biggest corporation selling services to the masses to the single individual promoting his or her hobby. Not only are people consuming online products like never before, the majority of them are actually making and sharing their own user-generated creations. But where, oh where, are the profits?

I remember the heyday of the dotcom boom of the 1990s. At its peak during my time at HMG Worldwide and their online division Ego Media, even seemingly healthy companies suddenly came crashing down as the bubble burst under the realization that many of the New Media companies had no viable business models. We watched as startups hemorrhaged money without any practical means of recouping the investments that were being made.

But the dotcom collapse was shortlived, and New Media survived, phoenix-like, rising again to even greater heights. Everyday it seems we are witnessing the next great thing, or just the newest flash in the pan. It seems as if yesterday, marketers were swooning over Facebook, the day before it was MySpace, today it's Twitter, before that it was YouTube and Flickr, all attracting millions and millions of participants. Tomorrow it will be...who knows? Are these new tools and technologies actually making money for its users or are they just new-fangled ways to waste some time until the next cool thing comes along?

Newspapers and magazines are dying and trying to convert to digital models. The book publishing industry is trying to figure out how to profit from the latest electronic-reader trend. The movie, music, and television industries are having a bigger and bigger presence online. But has anyone really figured it out yet?

Here is the crux of the problem: how do people make money online? In the past, media have been created with easy to understand models for making profit. Use the printing press to make books and sell them. Use film to sell tickets to theaters showing the content to captive audiences. Use radio and television to sell advertising to reach the millions of people listening to and watching their programming, (or later sell subscriptions for cable and satellite content). But in New Media, online content is often given away for free. The problem becomes self-evident: if you build a lemonade stand only to give away your beverage for nothing, you won't be out there giving away lemonade for long, and after all is said and done, what will you have to show for your time and trouble?

My hero Harlan Ellison thinks it's lunacy for any writer to give away his words for free. Yet millions of people are posting their words on blogs, message boards, newsgroups, and other sites for all the world to read -- for free. There are those who argue that "free" is a dirty word and the root of all evil, keeping cyberspace from living up to its Ultimate Marketplace ideal.

But I see the Internet as more than just a moneymaking tool. It has democratized and in many ways revolutionized our culture and societies the world over. And I lean on the side of those who believe that "free content" certainly has a place in legitimate new business models. Free content in some areas can lead to revenue in other areas. Build an audience and voila, you have a marketplace. Use free content to build a brand, and once you have an audience who trusts you and enjoys what you have to offer, many of them will follow you to the next profit-generating level, whatever it may be.

In my case, I've been posting my words online on various sites for free for years. In some cases, the content stemmed from my paying day job (like my Celebrity Interviews). Other times, I used online forums to promote my offline gigs, like my acting productions or the projects I was trying to publicize. Free content is relative -- sometimes a free music track leads people to buy an entire album or a concert ticket or an artist's merchandise, sometimes a free trailer leads people to buy tickets for the full show, sometimes a free screening leads to enormously positive word of mouth that results in increased box office or ratings. Some people might think of it as the "drug dealer analogy" -- give a little bit for free and hook them to pay for more later.

In my case, I use this blog to share my ideas about topics I love, to build my brand if possible, to create a network of people with similar interests, and then hope for the best when I work on projects for profit, like screenplays or stageplays or printed books of fiction. Can this blog generate profit? There's potential for ad revenue or Kindle subscription sales, but I'm not holding my breath. I have no delusions -- I do this for fun, and look for profit elsewhere.

That doesn't mean we shouldn't look for ways to use these New Media tools to our advantage. The creative innovators will find ways to make it work. The dinosaurs who can't adapt will fade away, but the majority will thrive in the new environment that lies before us.


Peter said…
I agree with your views on this. Insofar as selling political ideas are concerned, readers go nuts over the daily rantings and posts of several bold but controversial writers. In a country* where democracy is seemingly eroding over the years and cronyism pervades national development, ideas are sold every day to the common folk! Like you, I prefer to keep my rantings for sharing purposes and to get a few laughs and comments out of my looney bunch of friends.