When Old Media Buys a Community

By | October 8, 2007

MSNBC, owned by MSN and NBC, has bought Newsvine, a sort of citizen journalism, blogging and news-sharing site. But who stands to lose from the deal, and what does it tell us about the equity of Web 2.0?

One commenter on the page that announces the news hits the nail firmly on the head:

In the end I feel dejected, sad and I guess just a little like we should have seen this one coming. What, pray tell is going to happen to OUR huge sums of ad revenue? I mean you guys are making mad loot out of this deal, what about our money?

The deal was cash, but terms were not disclosed.

It’s one of the unresolved paradoxes of Web 2.0 (and citizen journalism): How do you reward those who make a website like Newsvine what it is? Or at least, how do you avoid making them feel hopelessly exploited?

This from Calvin Tang, a co-founder of Newsvine:

I personally would like to thank all Newsvine users who have helped make Newsvine what it is – the most vibrant and active community of users on the digital news media landscape. In addition to being one of the most powerful and unique publishing platforms on the web – the open dialogues, the free and creative expression of ideas and the genuine manner in which all of you participate on the site are some of the foremost reasons that msnbc.com found Newsvine to be an attractive company to partner with.

To be fair, Tang does point to the possibility of “an adjustment to the way contributors are compensated based on suggestions from users.” It’s not clear what this is: At the moment anyone with their own “column” on Newsvine gets 90% of ad revenue derived from visitors to that page. And all content is owned by the person who creates it.

Newsvine is actually hugely popular among those who use it: about 1.2 million unique visitors per month, according to Read/Write Web, and growing at an average rate of 46% per quarter. The site, R/WW says, gets about 80,000 comments and 250,000 votes a month. That’s pretty good traffic in a couple of years.

But still there’s the nagging feeling that money is being made on the backs of others. If all those producing the work were interested only in wider exposure, then the MSNBC deal is good — lots of opportunities for their writings to be read by a wider audience.

From the comments a lot of Newsvine users feel a sense of loyalty and protectiveness towards the site and its founders. And although it’s obvious that the best exit strategy for a site like this is to be bought out by a bigger player, probably one in old media, the illusion that something like Newsvine is an antidote to old media is an important one to maintain; how many, otherwise, would expend effort and time contributing for free if they felt the primary goal of the site was to get bought out?

Money is probably of little consequence to most of those using Newsvine. They’re more interested in the satisfaction that comes from “owning” a community. But inevitably money changes the equation: it is that very community, not the site per se, that has attracted MSNBC’s dollars. Should not the community, therefore, be entitled to some of that money?

Of course, the community itself, by not being party to the discussions with MSNBC nor beholden to the deal, can just up sticks and leave if it doesn’t like the outcome. And that’s where the other illusion kicks in: MSNBC can’t buy the community, although it may feel it has. It can buy the site where that community has built its camp. Make the wrong moves, not make enough moves, or fail to spread the wealth, and it may wake up one morning to find the camp has faded away in the night.

Newsvine – Msnbc.com Acquires Newsvine

7 thoughts on “When Old Media Buys a Community

  1. Calvin Tang

    Hello, and thank you for your thoughts on msnbc.com’s acquisition of Newsvine.

    To answer your question, let me pose another question: Do you think that all YouTube users should have received a part of the $1.65 billion that Google paid for the company? What about all the MySpace users?

    In fact, is it typical for companies to pay users for the content and communities they create? We do pay our users, based on the amount of readership they generate by contributing to our site. The other two sites mentioned above both depend on user generated content and their respective communities. Yet, neither of them compensates people for creating value.

    Just food for thought. Feel free to voice any other questions you may have on my Newsvine column, and thank you for your thoughts.

    Best regards,

    Calvin Tang

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  4. Jeremy Wagstaff

    Calvin, thanks for taking the time to post a response. True, you do pay your creators, as I mentioned.

    And it’s a fair point that the same question applies to all content-based communities, but I’d argue here Newsvine is a little different to YouTube and MySpace. The former is clearly a shop-window for video content (no one is going to put content on YouTube expecting anything more than more eyeballs, as far as I know) and the latter is either a shop window for musicians or just a modern day GeoCities — glorified homepages. Neither is really a community in the sense of those involved feeling a sense of ownership of the whole, as you’ve (successfully) managed at Newsvine.

    Neither, also, purports to be what Newsvine is, a site aimed primarily at enabling users to create content that competes head on with sites that pay their users for content, namely journalists.

    I realise that’s not all Newsvine is. But the original content that Newsvine is most proud of is exactly that. So in a sense, it could be argued, your competitive advantage is that you’re creating a product without paying the creator.

    I’m not suggesting that you should pay those people. They added content fully understanding that the payment they would receive would be limited to advertising revenue. But the sale of Newsvine appears to have precipitated a questioning among at least a few of those creators that that original agreement may not have been in their best interests, so it inevitably raises questions about the future relationship between those community members and the new MSNBC Newsvine.


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