Tyler Cowen is an academic economist, author of books, and prolific blogger. His blog, Marginal Revolution, sees about 42,000 pageviews per day and has a loyal following. I have no advanced insight into Cowen’s personal finances, but I suspect that a very small fraction of his income stems directly from the ads on his blog; rather, the blog is essentially a loss leader, which Cowen uses to advance his career in other ways. This is a perfectly reasonable business model, and I have no doubt Cowen is doing just fine financially. But I’m not sure it’s the best business model for Cowen.
My intuition is that Cowen’s blog creats more economic surplus than his teaching, lectures and books combined. Cowen captures almost none of this revenue. Suppose Cowen were to post the following one day:
I have immensely enjoyed writing this blog these past years and would like to continue to do so. However, it’s very time-consuming and I’ve decided to devote more time to other activities. Writing on this blog will cease in two months time.
I am willing to reconsider my decision. I recognize that this blog probably creates much consumer surplus for loyal readers, and that many readers would probably be willing to pay for its continuation. However, if I am to continue writing it, I want it to be freely available to everyone. Thus, I’ll make the following offer: if, within the next two months, readers pledge a combined $200,000, I will continue to write this blog for one year. If, after two months, that goal has not been met, all pledges will be returned, and this blog will end.
The $200k figure is arbitrary, but I think it’s pretty reasonable it would be hit–10,000 loyal readers times $20 pledge would do it, as would a wide assortment of combinations. And $200k is a pretty sizable chunk of cheese for an economist, judging by this Scott Sumner post. The free-rider problem might take effect, but since there’s a real threat of losing something of value, and a lock-in mechanism to prevent people from not getting value from their pledge, it seems like it could work.