Blogonomics: The Gawker Media Pay Scheme

Gawker Media has moved to a pay-for-traffic business model, and Valleywag’s Paul Boutin has the full memo. Essentially, Gawker Media writers will now be paid in any given month the greater of two numbers: either their base pay, or the number of times their articles have been viewed, multiplied by their site’s "pageview rate" (as determined every quarter).

Gawker’s Noah Robischon, in the memo, spins this as a way for Gawker "to dispense pay increases automatically," without writers having to curry favor with individual editors. And in an interview in December, outgoing Gawker editor Choire Sicha declared himself happy with this scheme:

I think I’m one of the few who’s really in favor of it, essentially. Conceptually what paying people for their traffic does is it puts income in the hands of the worker; it puts control of the income, in some slightly messy way, in the hands of the people actually doing the writing. I think that’s actually kind of a huge advance.

"Messy" is right, given management’s ability to change pageview rates at whim. But even Robischon admits this system isn’t perfect.

For one thing, it essentially marks the official death of the Gawker Media blog as something you can read by reloading the home page every so often. Since home-page pageviews don’t count towards individual writers’ pageview counts, everything depends on driving readers to individual story pages.

But given how rare it is for a new pay scheme to be made public in such detail, it’s worth examining the economics here.

For one thing, the relationship between base pay and bonuses is exactly the opposite of what it is at most companies. Generally speaking, people with higher salaries get higher bonuses. At Gawker Media, however, it’s the other way around: ceteris paribus, the lower your base pay, the higher your bonus is going to be, since you have to "earn out" your base pay before you get a penny in bonus pay. Consider this anecdote from Robischon:

Four sites are already using the new bonus system (Gawker, Wonkette, Gizmodo and Defamer). One guest editor on Wonkette landed a huge exclusive and walked away with an extra $3k in his paycheck.

I reckon that Robischon is referring to this post, which has received over 380,000 pageviews so far. It’s worth noting that the "guest editor" didn’t even have posting privileges: he’s not credited in the normal byline space but rather at the foot of the post, as "Princess Sparkle Pony". (Which means that his base pay is very low and might even be zero, thereby artificially increasing his bonus.) What’s more, the post is a fortuitous one, a result of the fact that Mr Pony has known the source of the exclusive for "several years". Clearly this is not the kind of thing that your average Gawker Media employee can expect to produce on a regular basis.

In contrast, Gawker is meant to be a news site, and Denton is looking to poach newspaper reporters at competitive salaries. My feeling is that those reporters won’t be able to expect much in the way of bonuses for some time after they’re hired, just because their base pay is going to be high enough (definitely more than $3,000 a month, in any event) that they won’t be able to earn it out.

On the other hand, long-standing Gawker Media employees are in a much better position:

You will be eligible for a bonus based on the number of pageviews your posts receive each month. This total includes any pageview on any story with your byline that was read during the month, even if the story is months or years old.

This is music to the ears of anybody who’s been writing on sites like Lifehacker or Gridskipper for some time – those posts can remain fresh for years. On the other hand, it’s unlikely to be much use to Gawker writers, and not only because there aren’t any longstanding Gawker writers. And more generally, this pay scheme makes it harder to join Gawker – since new writers don’t have an archive of old stories generating page views – and also (marginally) harder to leave it once you’ve been there for some time.

At least two things remain to be seen: whether the new pay scheme will increase the amount of salaciousness at the expense of the sites’ broader credibility, and whether the new pay scheme will adequately reward the kind of old-fashioned shoe-leather journalism that Denton wants to encourage at Gawker. One thing I’ve noticed in my years blogging is that your most popular posts are never your best posts, and that it’s pretty much impossible to predict which posts are going to catch on and get lots of pageviews. The new Gawker pay scheme, then, might well end up simply rewarding the lucky, rather than the good.