Looks like Newsvine is now jumping into the revenue share model but taking it a step further:
You’ll collect 90% of the earnings from your own domain (yourname.newsvine.com). The other 10% goes to the person who referred you to start writing here. Wondering why you don’t keep all 100%? The answer is: we want you to keep over 100%. By writing, saving links, and referring your friends, you’ll be able to benefit more than you would by writing your own column alone. For example, if you refer 5 friends who sign up and have about as much readership as you do, then you’ll be receiving:
90% + 10% + 10% + 10% + 10% + 10% = 140%.
Sounds like a pyramid scheme to me! (sarcasm)…
In all seriousness this breaks down the tragedy of user generated content. Why should users contribute content to a site and not see any return on investment.
Simpy does the same thing of course and it would be nice hear Otis’ thoughts on how this is working out. I don’t think anyone has written a review of how this has worked in the long run.
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Trackback on Apr 3rd, 2006 at 10:58 am
Winds of the Web – 04/03/06
Interesting thoughts, notes, and comments from around the Web – Kevin Burton is (sarcastically) thinking that the Newsvine revenue share model is a pyramid scheme. Those work, don’t they? Cool, sign me up. He asks about how the Simpy experiment…
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April 3, 2006 at 3:49 am
But, they didn’t say how they will generate revenue from your writing in the first place.
April 3, 2006 at 9:22 am
It’s funny how Calacanis says something and people assume it is news. That page you linked to, and all of the information on it, has been around since the private alpha several months ago. This isn’t new at all. The affiliate program has been around since day one. Day negative one hundred even.
As someone on Calacanis’ site correctly pointed out, multi-level marketing (aka pyramids) require many things, but the most basic is *multi levels*! This is a simple affiliate program, not unlike the one which is even in place at Google. Refer someone to AdSense and get a bonus yourself. Pretty simple really. The concept at Newsvine is that when you add value to the community, you should receive value in return. How well will it work long-term? We’ll see.
April 3, 2006 at 9:23 am
By the way, I have two items in my feedreader. “Newsvine is Not a Pyramid scheme” and “Newsvine is Now a Pyramid Scheme”. URL says “not” so I’ll assume you meant that one. :)
April 3, 2006 at 11:15 am
Hello, I’d like to clarify the revenue sharing aspect of Newsvine. We have been clear about the 90/10 split since prior to the Alpha test site. The reason we offer this form of revenue sharing is that a) you add value, we compensate you for your efforts, and b) bringing another productive contributor into the community is something of tremendous value, so we want to reward you for that as well.
Since this system of referrals and revenue sharing only goes one level deep, we think it does not represent a pyramid-like model. You should be rewarded for telling a smart friend about the Vine, but not necessarily for someone s/he brings (and so on). Also, by bringing someone into Newsvine by way of an invitation (and collecting the other 10% of revenues they generate), you are vouching for them and can be held accountable for the actions of your invitees (i.e., your account would suffer negative consequences if the majority of the users you invite turn out to be spammers).
Revenue will be generated by ads placed on users’ columns and article pages (as well as the rest of the site). Users will keep 90% of the ad revenue generated by their own pages (including their column).
I hope this helps.
best regards,
Calvin Tang
Co-founder, Newsvine
April 3, 2006 at 3:35 pm
Also… for the record guys I should point out that I wasn’t *literally* saying that you were a pyramid scheme… I was joking (hence the sarcasm in parens).
I just think rev sharing is interesting so I linked to you…
Thanks for the clarification. I think its a good idea.
April 4, 2006 at 3:14 pm
Kevin, the Simpy + AdSense deal is working quite well, from what I can tell. I’m not racking how much money Simpy users who are making use of it are making. Obviously, the amounts are directly proportional to Simpy’s traffic and the number of pages where ads are shown. The traffic is growing despite Alexa’s funny charts, and only a few pages carry ads currently.