Are Content Businesses a Fool’s Endeavor?

I guess it really does suck to be a writer …

It’s pretty clear that this isn’t a road to riches. Traditional publications don’t pay hefty salaries, and it’s difficult to break into them. Freelance writing provides some opportunities for a solid living, if you know how to manage your personal business effectively, but you have to work at it. Starting your own business seems to be the only way to hit it big, but this isn’t exactly news. It’s one of the few ways one can generate real wealth. For writers, however, even this angle may be inherently constrained.

Two recent news stories got my attention and made me think about this.

The first was AOL’s acquisition of TechCrunch [Disclosure: I write for several AOL blogs]. The hot tech blog, ranked second in the Technorati 100, was reported to have sold for around $40 million. That’s not a bad payday, but it pales in comparison to the efforts of entrepreneurs such as Bill Gates and Steve Jobs. It looks likely that the founders of Facebook and Twitter, which move content rather than produce it, will see much higher valuations than Michael Arrington & Co.

The other story that caught my eye was the long profile of Nick Denton in the most recent issue of the New Yorker. The most recent valuation for the Gawker network of blogs, based on a Denton share buyback, was $30 million, which probably makes sense with revenues of up to $20 million. Again, his share of a sale would likely result in a rather comfortable living, but it’s hardly the stuff of which empires are made.

So, that brings me back: does it make sense to get into this business?

It’s a tough one. There’s no shortage of writers and bloggers – not to mention blogs – on the market, and it’s hard to find a space worth entering that isn’t crowded. New tech advancements and other societal changes, of course, will open new niches, but they will become crowded quickly, too.

Maybe you don’t get into this line of work to get wealthy (I assure you, I didn’t), but that’s not what we’re talking about here: this is about financial potential. And the ceiling seems painfully low.

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