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The sad economics of being famous on the internet

229 points| prostoalex | 10 years ago |fusion.net

154 comments

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[+] wutbrodo|10 years ago|reply
I don't mean to sound heartless, but can anyone explain how the economics of these new Internet-enabled distribution channels are "sad"? Don't get me wrong, I've found poverty and lack of economic opportunity to be very sad, for far longer than it's been fashionable to do so, but that's not really what the article's talking about.

> Every other week, Tonjes, 29, debates getting another job but wonders how she’d have the time to keep up her three channels on top of a 9-to-5.

Maybe keep up two channels? or one? Before the Internet, this story would have been a person stuck in a crappy job who doesn't get to indulge their passion for music _at all_, since they would get _zero_ dollars for it (barring the enormously low chance of getting a major-label record deal, an option which still technically exists). The low barriers to entry for YouTube/Instagram/etc are the other side of the coin for lower income per subscriber than traditional gated channels like getting signed at a record company.

TL;DR: Someone being unable to afford their groceries is what's actually sad, but this isn't an article about poverty and lack of a safety net. Low-barrier, low-gatekeeper distribution channels like YT or Instagram _mitigate_ this problem, not create it. Calling the economics of being Internet-famous sad is missing the point by a mile.

[+] kriro|10 years ago|reply
"""Van Gogh didn’t have to shill for Audible.com to pissed-off fans of his art."""

Pretty sure many artist of that day had to paint wives/daughters of rich folks that they'd rather not have painted to get by. And most artists that sell for millions today were pretty poor unless they had a random rich person and were their "pet artist".

I'll sound pretty heartless but the post sounds entitled. There is no grantee of riches just because you're "famous". Actually turning that fame into money is a skill and not something that happens automatically. If you think it's unfair and you deserve more because you have so many fans...charge them directly and not through indirect means like adds, branding or product placement and see how many stick around.

"""The most Allison and I have made combined on one deal is $6,000, and 30 percent of that went to our multichannel network"""

And despite that they started a company to make it a full time gig?

I also don't buy the implied sentiment that telling the truth about being more or less busto despite all the followers is seen as whining. Sure by some but you don't want those as followers. Transparency is usually valued very much in communities.

[+] vinceguidry|10 years ago|reply
From Wikipedia:

He moved in November 1885 to Antwerp and rented a small room above a paint dealer's shop in the Rue des Images (Lange Beeldekensstraat).[69] He had little money and ate poorly, preferring to spend the money Theo sent on painting materials and models. Bread, coffee, and tobacco were his staple intake. In February 1886, he wrote to Theo saying that he could only remember eating six hot meals since May of the previous year. His teeth became loose and painful.[70] While in Antwerp, he applied himself to the study of color theory and spent time in museums, particularly studying the work of Peter Paul Rubens, gaining encouragement to broaden his palette to carmine, cobalt, and emerald green. He bought Japanese Ukiyo-e woodcuts in the docklands, and incorporated their style into the background of some of his paintings.[71] While in Antwerp, Van Gogh began to drink absinthe heavily.[72] He was treated by Dr. Amadeus Cavenaile, whose practice was near the docklands,[note 9] possibly for syphilis;[note 10] the treatment of alum irrigation and sitz baths was jotted down by Van Gogh in one of his notebooks.[73] Despite his rejection of academic teaching, he took the higher-level admission exams at the Academy of Fine Arts in Antwerp, and, in January 1886, matriculated in painting and drawing. For most of February, he was ill and run down by overwork, a poor diet, and excessive smoking.

Once Van Gogh broke through and gained some success, he shot himself after two years.

Yes, it's tough to make it on YouTube, but comparing yourself to famous painters isn't going to win any sympathy.

[+] blisterpeanuts|10 years ago|reply
I didn't detect entitlement in the article. It seemed to me that she was just describing the cold economics of being a vlogger.

Thousands of people see you on social media and many of them mistakenly assume you're making a decent living. They're so ignorant.

What's more, it's those opinionated viewers with their snarky comments about selling out who are entitled. They expect free, adless entertainment by selfless, sharing Internet personalities.

I'm grateful to this vlogger for having the courage to speak out on a painful and embarrassing topic. It's given me a lot to think about.

[+] aws_ls|10 years ago|reply
What a negative comment, to a detailed an insightful article! Just because she mentions Van Gogh, you pick on it, ignoring her later qualifiers.

Rather, this long post should be seen as a critique of the limitations of channels like YouTube. Such platforms are supposed to cater to long tail and empower them, but clearly they fall short.

Rather than criticizing the long tail artists for feeling entitled, it can also be seen as, that YouTube like platforms could solve this problem in a better way. Perhaps something like reddit tipping using bitcoin (I know this sounds a bit futuristic).

Clearly Ad based model are lacking and not paying enough.

Summary: If artists in the earlier centuries suffered and lived in misery, it does not mean that the current lot should also live the same way. Not in the age of Internet and cyber currencies.

edit: minor correction

[+] an0nym1ty|10 years ago|reply
The difference that the article is trying to highlight is the contrast between fame and economic security. Van Gogh wasn't famous while he was alive, so it's a straw-man argument. The modern Internet Star, however, is quite known.
[+] yen223|10 years ago|reply
"I also don't buy the implied sentiment that telling the truth about being more or less busto despite all the followers is seen as whining. Sure by some but you don't want those as followers. Transparency is usually valued very much in communities."

Rather ironic, considering the rest of the comment.

[+] drzaiusapelord|10 years ago|reply
>I'll sound pretty heartless but the post sounds entitled. There is no grantee of riches just because you're "famous".

I don't recognize any of these people. I think calling them famous is a stretch. Having impressive youtube numbers, well, isn't that impressive outside of youtube. I see millions of views on crap like cat videos or terrible comedy or whatever. If someone is getting regular high numbers that means he or she is competitive with a cat yawning video or someone doing tasteless race comedy (two things recently forwarded to me). I think these people need to realize that things are much more competitive outside their little worlds and they simply aren't talented enough to make it outside of their little echo chambers.

Also, a pet peeve of mine is the phrase "internet famous." These people are best sub-sub-genre famous or whatever. There is no singular internet culture. Its a lot of different cultures connected by tcp/ip.

There's something about entertainment that's just awful. The unbelievable egos involved, the entitlement, the lack of criticism, the fanboys/girls telling them they're awesome, etc. I imagine this all leads to some pretty sour attitudes like the one quoted. From a financial perspective 70k followers isn't a lot. Its not going to pay out. Even if each of those people gave you a dollar, which they wont - hell they're probably running ad block, its a measly $70k. For "real" famous people that's a rounding error.

[+] j4kp07|10 years ago|reply
The author's demographic audience is likely 12-15 year-old kids. This is why she cannot find any patreons. They don't even have a credit card to make a donation.
[+] profinger|10 years ago|reply
I'm with you! First off, authenticity is king in today's world. Second? This article screams entitlement. Well said!
[+] dhimes|10 years ago|reply
Pretty sure many artist of that day had to paint wives/daughters of rich folks that they'd rather not have painted to get by. And most artists that sell for millions today were pretty poor unless they had a random rich person and were their "pet artist".

Probably why people picture Jesus as a European white guy.

[+] Animats|10 years ago|reply
That's normal. In 2009, there were five million bands on Myspace. Some of which didn't suck. Maybe five hundred of them broke even.

If you've spent any time in LA, you've met actress/model/waitress types. Walk-on parts in a few movies, some commercial work, no real money.

Authors have the same problem. A decade ago, there were people who thought blogging was a career. That's so dead. The Huffington Post is now an Aol content farm, with content-farm type rates.

Fame leading to riches was an artifact of expensive distribution. That's so over.

[+] majani|10 years ago|reply
I wouldn't say fame leading to riches is over. It just follows an extreme long tail curve where less than 10% of the ones who get fame get all the good money, and the other 90% get scraps. Come to think of it, that's just how most businesses are.
[+] VLM|10 years ago|reply
Could you model it as a logical fallacy?

All super rich people are famous. Trump, Bush family, Walton family, etc. Rich, therefore you're famous.

In logical fallacy land, all famous people are therefore rich.

And youtube people are psuedo-famous (lets be realistic, 99% to 99.9% of the population don't care about them) therefore they must be rich.

Via the miracle of hollywood accounting, I distinctly remember William Shatner (or was it Leonard Nimoy) temporarily living in a van down by the river in the 70s in between trek and later revenue sources. In the hollywood PR era they were all rich even when they were not, in the YT era it can't be covered up anymore.

[+] dayon|10 years ago|reply
Wow. That's one of the most eye-opening articles I've read. I admit to having no idea how difficult it is, at least for some social media stars, to get by on e-fame.

The take-aways for me are:

1. If you become famous on social media, understand that it might not make you enough money to survive, paradoxically with more fame leading to possibly less income.

2. If you must make videos, vlogs, blogs, or whatever else online, do something that you want to do for its own sake. Make something that in itself is valuable. Don't make a song because you think it'll make you money or a branded informative video because you think it'll net you an audience and therefore income. Create something great for the sake of the greatness. That way, you can't really lose either way. Because, it seems, either way, you're going to lose.

[+] jerf|10 years ago|reply
I see Patreon got a single dismissive handwave, but, err, why? I mean, yes, I saw their putative reason, but it makes no sense to me. Why don't they sign up for it, tell their fans the truth they just told Fusion.net, and let the chips fall where they may? Worst case scenario is that it doesn't work.

Heck, lose half your fans, .5% of the remainder pays you a couple bucks a month... that probably would count as a huge win.

I have actually watched a couple of my Patreon recipients go from bending their art in various ways for money (nasty ads on the site, etc.) to just making the art. The piper must always be paid, but a wide, amorphous crowd of Patreon supporters individually paying in just a couple of bucks a month, all of whom have sampled your free wares and pretty much know exactly what they're getting is probably just about the best boss you could imagine. (Modulo perhaps having to deal with the occasional person who may stomp off loudly taking their money with them, but I haven't seen that yet, and that's where the "width" comes in; if one person stomps away with their 2$/month, well... whoop-de-do. and all of my patreon supportees that are keeping up their end of the deal are seeing slow-but-steady patron growth. Slow-but-steady growing subscription revenue starts to add up!)

[+] graeme|10 years ago|reply
I'm in a niche where people are interested for 3-8 months, then they go away and a new bunch emerges. It's based on a cyclical test – people stop paying attention once they take the test.

Do you think this would work for Patreon? I have a site where people are extremely appreciative of the volume of free work I have online. Probably some would sign up for a bit.

My only concern about testing it would be if the number was embarrassingly low in case I'm wrong about who would support it (sub $500). Though I suppose I could just close it if that happened.

[+] pmlnr|10 years ago|reply
I'd highly suggest Flattr instead, though that needs a little more push unfortunately, but unlike Patreon, Flattr can support any source of creation ( including even blogs ).
[+] mozumder|10 years ago|reply
A big problem these people face is their inability to actually sell ad inventory. They have the viewership to get them rich. A million views at $10/CPM for video views is a good $10,000 at a 100% fill rate. If they produce just one of these videos per month, that can get them a nice salary. And they probably do several of these videos per week.

These people really need ad salesmen to turn their channels into real businesses. They're not going to have the time to sell ads themselves.

There are a lot of issues behind selling ads (just because you have a billion views, doesn't mean you're useful to advertisers), but going to a site like sellercrowd.com should get them some leads on salespeople and techniques.

[+] dangoor|10 years ago|reply
I think CGP Grey is an interesting counterpoint. I think he said that his YouTube channel is something like #700 in terms of subscribers, so he's not up at the top of the food chain.

And yet, he gets paid $13.5k per video:

http://graphtreon.com/top-patreon-creators

with "only" 5100 patrons. He's also on two successful podcasts that doubtless net him a few thousand more per month.

He's also gone out of his way to make sure that he's not visibly famous (he doesn't appear in his videos), which is an interesting contrast with the people in this article.

If I had to guess the biggest difference between CGP Grey and the people discussed in this article, I would guess that CGP Grey had a plan and optimized for things that can actually make a living for him. He talks a bit about this on the Cortex podcast.

[+] vinceguidry|10 years ago|reply
To make money directly from your audience, your audience has to have money. The one parallel I saw in all of the article's examples is that they're all catering to young kids.

I bet someone could make a tidy fortune coming up with a monetization strategy for these artists. My guess is that targeting parents would do the trick.

[+] n72|10 years ago|reply
There seems to be the implicit assumption in the post that if one is famous then one should be earning significant money somehow. This is a false assumption.

Moreover, perhaps if no one is paying for the content, then it's not worth paying for.

[+] fisherjeff|10 years ago|reply
I think a reasonable, but also apparently false, assumption would be that if you invest significant amounts of time, energy and money into putting out a product consumed by hundreds of thousands of people, you should be able to make at least a living wage.
[+] rotw|10 years ago|reply
That's blatantly not true, people on the internet have become massive cheapskates due to the easy availability of everything. Since Napster, piracy has flourished and continues to do so, and most often the most-pirated products correspond strongly to what's most popular in the market.
[+] gedrap|10 years ago|reply
I understand the sentiment that if you work hard you should get paid a proportional amount of money. But, well, welcome to real life. There are things in life that pays the bills and others that don't, no matter how hard you work at it, therefore, you have to decide how much time and resources you can afford to spend on it. It seems like for these people, they are making a trade off in terms of income and self-realization balance.

I feel a bit bad about this slightly cynical comment but, well, that's what I think. It would be absolutely amazing if we all could make a living from what we enjoy.

On another note, I might have missed it in the article but I didn't see the author talking about the target audience? Shouldn't it make a huge difference in terms of CPM and therefore revenue?

Because I'd imagine that advertisers are willing to pay totally different amounts of money if your average subscriber is in late 20s or 30s, from the USA, UK or Canada and with middle or higher level of income, compared to just a bunch of high schoolers who have little spending power?

[+] jfoutz|10 years ago|reply
That's not really how it works though. First "hard" work isn't really relevant at all. Effective work, that's huge. Second, (but perhaps a variation) quality matters a lot. Since the internet lets everyone talk to everyone (mostly) you get this power law effect. The best take the lion's share of the money. Everyone else struggles.

it's a tournament. the very best, or at least most popular, take home millions. Everyone else is bush league and take home pretty much nothing.

[+] cousin_it|10 years ago|reply
You have 100K "fans" and no money? That's crazy. Why not beg for donations? Be upfront about your financial situation, figure out how much you need per month (without side jobs), and announce that you've set up a donation ticker. If you don't make enough in any given month, apologize to fans and tell them that creating free content isn't sustainable for you.
[+] sp332|10 years ago|reply
Yeah, that's what I couldn't get. If they're not paying you, those 100,000 people aren't customers, they're just strangers. They do absolutely nothing for you.
[+] pmlnr|10 years ago|reply
This would probably be the best and only working approach for creators these days.

( Sidenote: flattr.com was supposed to be addressing this but from the consumer side. )

[+] Swizec|10 years ago|reply
Fame is a marketing channel. The best money comes if it's a marketing channel for a service that you sell.

This has always been the case and is why movie stars become producers, why music stars start labels, and why sports stars start promotion companies and clothing lines.

In other words: fame is a means to an end, not an end.

[+] kiba|10 years ago|reply
Seemed to me a communication mismatch.

Youtubers try to act all perfect according to an image because they believe that what the viewers want. So they don't communicate their money trouble.

Viewers got this distorted notion that they're rich because of subscribers numbers due to said zero communication. And they acted spoiled when they do one of their sponsored videos.

[+] profinger|10 years ago|reply
50 cent supposedly recently had a similar problem. If you try to act rich people will think you are rich.

I am aware that his situation is still confusing as to the actual facts but I am speaking more in an analogy here confirming your sentiment.

[+] tunesmith|10 years ago|reply
Clearly they should start talking about money - if more you tubers and musicians and artists and what have you talked about what they are and aren't making, maybe it would start to put more of a dent in the self-entitled feelings that a lot of fans have.

The big problem with all of this though is that when artists wise up and stop trying to chase the dollars that aren't there, they stop producing as much creatively, and the fans don't realize what they are missing.

More than a few times I've wished that the millions of fans out there would suddenly wake up with a much more evolved sense of taste, willing to reject the art that is a waste of time, and willing to pay for the art that is actually worth their time.

[+] anon4|10 years ago|reply
No, people would just close the tab the moment they started talking about money.
[+] hxn|10 years ago|reply
It's similar with websites. As a developer, I find it easy to build things people want. My websites get millions of pageviews every month. Yet, I make less then $200 per month from Adsense. No idea how high this could get with better monetization or what the path to betterm monetization would be.
[+] dade_|10 years ago|reply
Is it that strange? I don't have a clue who these people are. 70,000 followers on the Internet is not that notable, especially since no one knows if a follower is a person, a robot or a corporate SM account. Where is the story of the people with millions of followers that can't make money? Also, being famous isn't going to make you money unless there is business smarts involved. Working as a waitress, well she probably needs to do some networking. I remember meeting Dave Moffat, once famous, still has fans, working as a waiter. Really super nice guy, not smart, very unaware of business, and no clue how to monetize. If I had a million followers, what I would do...
[+] rgejman|10 years ago|reply
How is this different than the traditional arts and entertainment fields? Most singers, song writers, painters, sculptors, writers, etc also struggle their whole life to make a living. Just because your art is digital and you can reach hundreds of thousands of people at the click of a button doesn't mean that you will become rich overnight. Sure we need new revenue models for content on the Internet--but my prediction is that they will lead to a lot fewer people watching content (much less paying for it). Not to mention that if your fan base is comprised of 13 year olds who need to ask their parents for a credit card every time, you can't make much money off of them.
[+] sp332|10 years ago|reply
Famous ones though? It doesn't take 100,000 fans for a musician to make a living.
[+] jbb555|10 years ago|reply
Here is the thing. These people produce something of interest to people at the price of 'free'. If their 'product' was worth anything then they could charge for it, but then of course nobody would pay and they wouldn't be 'famous'.

So you can't get rich if you have to give your 'product' away? Not really a big surprise is it?

[+] kiba|10 years ago|reply
If they don't ask straight out for money, they're not going to get it.

If you don't explain the situation to your subscribers, how are they going to be understanding?

So you put up this 'persona' on youtube. You said you 'struggled' but now you're not allowed to talk about your problem anymore.

So, if you end up doing sponsored videos to make a living and some subscribers decide not to subscribe any longer because you're 'selling out'. Well, I guess they're not really a subscriber like you thought would be.

[+] pbhjpbhj|10 years ago|reply
>If their 'product' was worth anything then they could charge for it //

I don't think this necessarily follow. I've watched YouTube videos that were as entertaining as TV shows where in the latter's case onscreen & production workers are getting paid. It's not that the content isn't valuable it's that supply is vast and so the price is depressed to roughly "well I'll put up with a couple of add" (near zero).

Having worth and being saleable are not directly comparable measures. Air is of effectively infinite worth to humans but you can't usually sell it.

[+] InclinedPlane|10 years ago|reply
Except for the people who do get rich.

Besides which, a lot of times the difference between scraping by and becoming a millionaire can sometimes be a good business manager. Knowing what to do and how best to do it, and keep up with it, can make orders of magnitude difference in monetization. And that's true in any business, in any industry.

[+] ggambetta|10 years ago|reply
They all seem to think of their YouTube channel as the content, and the ads as their revenue channel.

But how about upselling?

They could see YouTube as free marketing, teaser content, for whatever they're actually selling. Depending on what they do, it could be a how-to book, a video tutorial on DVD, 1:1 coaching, etc.

[+] braythwayt|10 years ago|reply
I consider myself fortunate that I like my day job more than I like writing words. Otherwise I would feel much of the same depression.

When I go to conferences or tech meetups, people tell me how much this essay or that book changed their life, and it's wonderful, but the revenues from everything put together wouldn't have paid for a van or a spot by the river for the eleven years that I've been writing.

Being internet-obscure is a wonderful and rewarding hobby, if you can afford a hobby. But for me, the rewards are in the writing and in the feeling that I'm contributing a little bit to helping people enjoy programming.

Which is a lot like other hobbies, where part of the social thing is helping other people enter the hobby and enjoy it.

[+] matchagaucho|10 years ago|reply
Pewdiepie's post-production skills are off the charts; coupled with content that people genuinely want to consume.

Internet increases the quantity of content, but quality of content drives compensation.