Business of Blogs


	Owning virtual communities: The business of media blogs JOUR 800, Fall 2004 Instructor: Prof Ray E Hiebert By Saswat Pattanayak "Blog readers need to see the blog-advertiser not as another PR-geyser, but as an ally, a comrade, somebody who has invested in a mind-set they care about. Bloggers are the ultimate intellectual entrepreneurs, history's largest and most powerful class of autonomous scribes. Blog passion, inventiveness and audience-grip guarantee that this medium will detonate a new commercial universe." ---Ad from the home page of Blogads. On the world wide web, owning the virtual space is a real business. A November 2004 eMarketer White Paper on online advertising in the US suggests growth rate of 28.8%, with an annual spending figure of $9.4 billion, a billion more than was spent in the Internet peak year of 2000 ($8.1 billion). At around the same time, a recent Nielsen Research on online journalism shows that a handful of media giants have come to dominate Internet journalism. Nearly 69% of the 20 most popular news Web sites are owned by one of the 20 biggest media companies. What does it all mean to the blog scene? From few amateur efforts to chronicle daily personal narratives online only five years back, blogs have become a serious vehicle today for propagation of ideas, exchange of information, networking of people and commercializing connections. Blogs, the fastest growing web phenomenon of this year, is the emerging marketplace for advertising and hence abound with ownership issues. Famously described as the free forum for virtual communities, blogs have been of late developing the vibrant industry traits of attracting revenues. Despite being acclaimed as an outcry against big media monopoly and providing for scopes of a participatory democracy where the aim is ideally to live life online with fellow members of the community without having to worry about the rents and the lease, some vastly inhibited changes in the economics of blogs have prompted this research. As a blogger myself I have often wondered if my ownership status itself is owned. The idea that I own something on the virtual world has always intrigued me to this end and I have not yet found any special relief. More than two-thirds of the blogs on the world wide web have been abandoned so far within the last four years. And surprisingly it may not have anything exclusively to do with ‘interests’, ‘motivation’ or any other psychological factors of the bloggers, as it might have to do with the economics of running a blog. Literature Review: With the blogging scene, since inception, as though change were the only constant, there have been changes in terms of technology, content, control and ownership. Whereas both technology and content have largely been managed by the users of blogs, the control and ownership issues have been issues of the beyond. One question emerges: who own and control the blogs? Of course the question will begin with the registrars, since each domain name which can have a blog feature needs to be registered first; and then I will address the blog systems industry, since without them, there can be no maintenance of blogs. a. The Domain Registrars: Only registrars accredited by the Internet Corporation for Assigned Names and Numbers (ICANN) are authorized to register .aero, .biz, .com, .coop, .info, .museum, .name, .net, .org, or .pro names. Some of these accredited registrars offer their services through resellers, which may provide assistance in completing the registration process. The registration contract, however, will be with the accredited registrar and that registrar will maintain all contact information. The reseller concept is popular since not all countries house the registrars. And in fact, ICANN is the non-profit corporation that is assuming responsibility from the U.S. Government for coordinating Internet technical functions, including the management of Internet domain name system. A blog can be part of an exclusive registered personal domain like saswat.com or paid/free membership facility as provided by blog websites like TheBlogCafe.com. Popular membership based public blog domains include typepad.com, blogging.com, blogspirit.com, and BlogIdentity.com. b. Blogging Platforms: Unlike websites which can be created on one’s own computer and stored, a blog is posted only via a subscribed service monitored through a provided platform. This also means that all data can be lost if the subscription is not kept alive. There are free or premium weblog software/systems (which refer to for-a-fee blogging providers that do not have free versions). Depending on the price one pays, one can blog on any of the three platforms, namely, hosted weblog providers which means they are dedicated blogging services; stand-alone weblog software--this is a type of blogging platform where the user needs to download and install weblog software in a free or paid web host in order to start blogging; and remote weblog systems. MindSay, TypePad, LiveJournal, Xanga and ModBlog as first category providers; WordPress, Movable Type, and Greymatter as the second; and Blogger.com, WebCrimson as belonging to the third type are companies which actually own the facilities to showcase the blogs. c. Listings and Directories: With hundreds of thousands of blogs, many of which are purely journalism blogs, not getting listed or featured on the search engines amounts to non-existence. Apart from the Blogrolls (the hyperlinking of different blog addresses on any site), there needs to be enrolment into blog directories such as Blogarama, Blogwise, Blogsearchengine and Eatonweb. And with a price, the listing features get better. d. The Rich Reach: The most untold story and yet highly influential one pertains to the fact that although the big media were once skeptical of the live journals as having any impact capability, they have now changed minds. Most of the big media in the world have their own blog posts, professional technical helps and journalists-to-turn-to-blogs. This poses a threat to existence of the numerous individual/community blogs formed purely on base of zeal. With the entry of the big media, there have been a tremendous increase in advertising segments and with the increase on stress on ads, big money is touted to spin the blog world around in near future. Business of blogs necessarily will be first affected by the regions where it is conducted. As I researched the overall registration status of the world wide web, I found that the business of the entire internet, not just blogs, are being conducted only in 28 countries of the world. The entire www are being managed by 370 registrant companies, out of which 268 are from the US and Canada; 29 from UK and Germany combined and rest 73 companies operate from the rest of the world. Likewise Internet supports only 53 languages in the world and an overwhelming majority of the registrants supported webhosts who offered English language platform. Whereas 301 registrants supported English language-based webhosts, the next highest support was for Spanish with 32 registrants. As much as 17 different languages could be catered to by only one webhost each in the world. Not surprisingly then, from a worldwide monthly audience of 452,406,072 who use Internet, in October 2004, the figures for the US alone was 256,218,092 users per month. The overtly hegemonic influence that English language and American registrants have over the www have direct repercussions on the blog scene. Most fonts, designs, layouts, and API (Application Programming Interface—the desktop software programs that let blogs be published) are in English. Consequently, most blogrolls depend on American blog hyperlinks. Most importantly, major geographical areas of human population have been left out of the entire blogging scene due to the limitations and conservative expansion. Since there has not been much academic researches on the business of blogs, I have taken help of many researches in the area of digital culture and it’s political- economical dimensions. In his book The New Media Monopoly (2004), Bagdikian says, “No imperial ruler in past history had multiple media channels that included television and satellite channels that can permeate entire societies with control sites and sounds.” With new economic realities of digital media convergence, few important issues emerge: i) Copyright: The media conglomerates control so much information and their media products bring in such high revenues that they fight the use of home computers to reproduce commercial recordings and copyrighting other digital material. There are limits on what constitutes copyright violation though. Recently the Supreme Court rejected a suit brought on by the toy makers who own copyright on the Barbie Doll against a song group because their lyrics was an interpretation of Barbie. Essentially, the toy maker company found it an offence to have the lyricist describe Barbie as a “bimbo”. The Supreme Court opined that the satire of a commonly known object is not violation of copyright. ii) Freedom of expression: This raises a fine line of argument about the freedom that online scribes can enjoy. Although, Gillmor (2004) assumes bloggers enjoy exclusive right to disseminate and distribute information freely, there have been debates. In saswat.com, the blogger argues that the mere structure of blog makes it easier for the government to monitor, maintain the records of, and by tracing the community of hyperlink networks on the blogrolls, take action (or make a case for) against them. iii) Market economy: New York University’s Jay Rosen (2002) on his PressThink blog explains that the weblog comes out of the gift economy, whereas most (not all) of today’s journalism comes out of the market economy. Researching on how market economy will affect the online audience, McChesney (2000) affirms that the Telecommunication Act of 1996 establishes that the private sector will determine the US electronic media and digital communication. He cites how a transition of the www network took shape from a government operation to a commercial service. And with the policies in place the Internet is hardly intended to provide wide spread public access or even to be a “public service” alternative to the commercialized wave. iv) Media conglomeration: Blogs will be affected by the way media conglomeration take shape, although, currently there are exclusive blog sites, the likelihood of them being merged with big companies who already are the big media is very high. On 4th Dcember, 2004, Microsoft itself has produced a blog platform simply because it could foresee a distinct set of challenges on it’s way to portal hegemony. In another instance, Blogger.com, the most popular blog platform, has already been sold to Google, a company famously known to track down preferences of it’s users, be through searches or emails. As McChesney’s research in “Rich Media Poor Democracy” points as to how capitalism quashes competition and promotes monopoly, there are signs of mergers and acquisitions in the online media scene now, which will well propel for a uniform private dictum on the pricing for maintaining and sustaining of the sites in future. v) E-commerce on blogs: From e-commerce of software, books, music, videos, and tickets for sports and entertainment events, the focus now has shifted to ecommerce of blogs. As Castells (1998) says of Internet, it has become a point of confrontation for both political right and the political left. And no wonder even the progressive blogs have now to depend on the advertisements of the right-wing industries too, for their survival. The well-meaning bloggers, apart from facing challenges on ‘copyright’ front, to being tracked down on ‘security’ apprehensions, will also likely to ‘pay or perish’ when the time comes to manage their identities on the virtual world. As the virtual world continues to have a real price, from being managed by the Government at one time to now being owned by few corporate giants, it is well worth waiting for the next few years to gauge the future of bloggers. Taking another byte on the argument, In “Cyberfutures”, Jay Kinney says that although originally funded by government sources, the internet has now decentralized, and its cooperative structure has been ironically the closest thing to a functioning large-scale anarchist society that human culture has yet seen. While the offline society-at-large seems bogged down in a bewildering swamp of regulation, litigation, legislative gridlock and intrusive social engineering, the relatively blank canvass of the Net has encouraged visionaries to project their dreams of a new political order. This order, often known as grassroots journalism remains pretty rarefied. Kinney argues that in any event, whether one is seized with electronic optimism or pessimism, it is best to remember that the politics that we bring to cyberspace is only half the picture. The politics that the burgeoning technology is enacting upon us as it spreads its tendrils everywhere looms larger still. Winston (1998) comments, “From the late 80’s on, and despite the illusion of independence, which had surrounded the enterprise almost from the outset, it was inevitable that this tax-funded and government-managed asset would be handed over to the private sector.” In 1995 the US national Science Foundation (NSF) handed over the backbone and management of the system to the private telecommunication giants, Sprint, Ameritech and Pacific Bell which became the gatekeepers of the principal access points. “Those who seriously believed they were in a brave new world of free and democratic communications were simply ignoring the reality of the situation.” Williams (2001) in his essay “Selling off cyberspace” cites the merger between the internet service provider AOL and the US media conglomerate Time Warner on 10th January 2000 involving a $190 billion take over. In a report, Washington Post suggested “by spreading its tentacles into content and taking on the Time brand name, AOL will likely be able to expand its global reach (Dugan and Cha 2000).” The director of corporate communications for AOL Europe, Matt Peacock makes a similar point. “AOL is a mass market product. The global brand for consumers.” Clearly the commercial logic of the deal is impeccable, Williams argues, since AOL has access to the massive content resources of the Time publishing empire and the film, music and television of CNN, Warner Bros., Time-Warner Cable, and much more. However the news of the merger was not universally popular. Bulletin boards on the Web were crammed with complaints from internet users who saw the deal as a blow to the web’s freedom from US corporate dominance. Likewise, the Economist (1999) commented on the merger of Viacom and CBS calling it as a “part of the five year long restructuring of the industry, involving world’s all big media companies. They are turning into outfits that produce content and distribute it through as many channels as possible. So ‘Rugrats’, Viacom’s gang of babies with attitudes started life as a cartoon Nickelodeon cable channel, has been turned into a film (made by Paramount, Viacom’s Hollywood studio), a book (published by Simon & Schuster, Viacom’s publisher) and a Web site, and has been sold on chocolates, pyjamas and God-knows-what through Viacom’s merchandising arm. These revenue streams make money and also promote the ‘Rugrats’ brand.” The same article also pointed to the advertising statistics - $5.5 billion in national television advertising revenue, young audiences on MTV and Nickelodeon complemented by CBS’s older audience profile, and CBS’s extensive radio and billboard businesses – and concluded, “No media company’s advertising salesmen will be able to offer their customers a wider choice.” The American trade magazine Variety also observed that the new giant will have “ a formidable presence” as both companies have “expressed interest in spinning out their Internet businesses into separate publicly traded companies” (Guardian/Editor, 1999). Post-industrialists like Daniel Bell in The End of Ideology (1960) argue that with cybernetics and other new technologies, there would be increasing importance of planning, education and knowledge-based economic development rather than any indulgence with economic class issues. Countering him, in Late Capitalism, Ernest Mandel argues that there have been three fundamental movements in capitalism, each one marking a dialectical expansion over the previous stage: market capitalism, monopoly capitalism and late capitalism. He links the appearance of these stages to Kondratieff’s famous theory of “Long Waves”--successive, rhythmic episodes of growth and stagnation that supposedly dominated the two centuries of western history. In each wave, surges in technological innovation are precipitated by temporary increases in the rate of profit, after a protracted period of underinvestment. Corresponding to the three phases of capitalism are three “general revolutions in technology”—steam-driven machinery of the 1840s, electric and combustion motors of the 1890s, and from 1940’s on, the ‘third technological revolution’ of nuclear power and computerization. Nick Dyer-Witheford in Cyber Marx (1999) discusses the analysis of Mandel as direct confrontation with the first expression of post-industrial theory, categorically rejecting any idea that the new economic centrality of science and technological knowledge marks some unprecedented historical epoch. Mandel argues that “Late capitalism, far from representing a ‘post-industrial society’, ….. appears as a period in which all branches of economy are fully industrialized for the first time.” Specifically citing Bell’s work as an example of prevalent theories of ‘technological rationalism’, he declares that “belief in the omnipotence of technology is the specific form of bourgeois ideology in late capitalism’: “This ideology proclaims the ability of the existing social order gradually to eliminate all chances of crisis, to find a ‘technical’ solution to all its contradictions, to integrate rebellious social classes and to avoid political explosions.” Refuting Mandel, Dyer-Witheford argues the assumption that capitalism will find solution to its contradictions using technology is spurious. On the contrary, he says such innovations only bring closer its inevitable collapse. Capitalism’s collapse may not seem inevitable now, but its relationship with democracy appears strained. As Chomsky opines (1993), “Personally, I'm in favor of democracy, which means that the central institutions of society have to be under popular control. Now, under capitalism, we can't have democracy by definition. Capitalism is a system in which the central institutions of society are in principle under autocratic control.” Today’s new media may well be under autocratic control of US governmental regulations. And hence it becomes pertinent to revisit them just when the freedom of access and freedom from control in the ‘blogosphere’ is celebrated. Schiller (1969) in his essay on The social use of Technology said, “Operating in a market economy and measuring performance by incoming revenue, broadcasting’s internal dynamics, like those of other industrial sectors, move inevitably toward economic concentration.” Same principles can be said true of the online media’s internal dynamics too, well after 30 years. Future Research and Concluding Discussion: From a playground of ideas to a battlefield for survival, blogs have been declared as the single most searched term online for 2004. It will be interesting to watch if the searches have been done in order to democratize the virtual community or they are an attempt to woo the participants to turn into consumers. Although historically vindicated that corporate houses stop at nothing to expand an economic imperialism using all the power and authority vested in them, my research will focus on the audience who this time around may take it with a pinch of salt. As a blogger myself, I feel the audience online are unlike anything we have ever witnessed before. On the blog scene, the audience really is audience no more, within few minutes of posting their posts. They themselves turn into active messages, come the reactions. The table is a circular one this time and there is no saying who will dominate, if at all and for how long. Any attempt to thwart this new found understanding of revolving positions of audience-message dynamics might meet with resistance of unseen magnitude. Despite attempts from the corporate moguls who understandably turn their profit interests towards this half a billion members of online community, the blog scene which is providing for the biggest ever platform for active mass communication, may well have different course in store for resolving the debate between the profit sphere and public sphere. Reference: Bagdikian, B. (2004). The new media monopoly, Boston: Beacon Press Bell, D. (1960). The End of Ideology, New York: Free Press Dyer-Witheford, N. (1999) Cyber-Marx, Urbana: University of Illinois Press Gillmor, D. (2004). We the media, CA: O’Reilly Gramsci, A. (1971). Prison notebooks, London: Lawrence and Wishart Hudson, D. (1997). Rewired, Indiana: Macmillan Lax, S. (2001). Access denied in the information age, New York: Palgrave Markham, A. (1998). Life online, Walnut Creek, CA: Altamira McChesney, R. (1999). Rich media poor democracy, Urbana: University of Illinois Press Powazek, D. (2002). Design for community, Indiana: New Riders Rao, S. & Klopfenstein, B. (eds.) (2002). Cyberpath to development in Asia, Westport, CT: Praeger Rheingold, H. (2002). Smart mobs, Cambridge, MA: Basic Books Sardar, Z. & Ravetz, J. (1996). Cyberfutures, New York: NYU Press Schiller, H. (1969). Mass communications and American empire, New York: Augustus Kelley Winston, B. (1998) Media Technology and Society: a History from the Telegraph to the Internet. London: Routledge. Saswat Pattanayak blog@saswat.com	BLOG it?