The (evil?) genius of Nick Denton

Interesting post on RADAR online about Nick Denton cutting pay rates for Gawker Media bloggers. I posted a comment which I’ll share below.

Hey Choire,

Some notes on your story from one of Nick’s top three Frienemies.

1. Despite this change in pay Gawker is very, very competitive in terms of not only blogging jobs, but MSM jobs. Most full-time folks at Gawker are probably making 3-5k a month/36-60k a year, and some are in the 60-100k range. That’s a very BIG number for folks working from home in the journalism/editorial space, many of whom are just out of school. Most folks make 20-35k out of school. Not telling you anything you don’t know obviously. It makes sense that the rate will rise and fall with Gawker’s RPM.

2. The five bucks for every 1,000 permalink page views (i.e. NOT the homepage, which is 50-70% of the traffic) is probably the break even point for Denton/Gawker (i.e. their RPM). So, there is no downside to giving 100% of that money away to his bloggers because it only drives more folks to the homepage/builds the brands. Denton is very, very smart in this regard.

3. Forcing folks into this model has lowered the “human capital” costs at Gawker dramatically. Nick doesn’t have to fire folks, they fire themselves. Nick doesn’t have to give people raises, they give them to themselves. This is a very significant savings for Nick. How many full-time editorial managers are there at Gawker? Are there any since Lock left?! What’s the ratio, one manager for every 50 bloggers?

4. Gawker has eliminated the need for marketing based on this model. The marketing is now built into each editor’s cognitive process. Again, genius.

5. Denton has less stress in his life. That’s the main point of this. Denton doesn’t like to talk much as we both know, and the last people he wants to talk to are the folks working for him. If he must talk to those folks that last thing he wants to talk about is their pay. So, if you look at Gawker as the ultimate life-style business Denton has achieved his goal: money, power, status, and no management overhead. Genius.

6. The downside? Insane amounts of inlinking in posts (one Valleywag post I just looked at had a half dozen links to earlier stories is a big one. Abuse of the “after the jump” device to the point of absurdity, and finally the selection of stories based on their diggability and SEO ability. Denton doesn’t care about this obviously… it’s a network built on gossip, personal attacks, and porn. Why would gaming the system matter more than those things?

Anyway, just thought I’d share.

best jason