Tech Companies Profit While Writers Starve

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Digital media companies are suddenly worried about declining ad revenue, and the venture capitalists funding these companies have also turned off the faucet of cash as they realize that success stories like BuzzFeed and Mashable are not the unicorns everyone thought they were.

Instead, the big winners have been the technology companies like Google and Facebook that have suckled ad revenue away from content companies and now account for 85 cents of every dollar spent in online advertising.

Nicole Cliffe, Editor and Co-Founder of The Toast, responded on Twitter by pointing out that while traffic is up, revenue has fallen, even with a redesign intended to attract higher paying advertisers.

The biggest losers have of course been writers who continue to see their pay decline. Lincoln Michel of Electric Literature added that the problem for publishers is a double-edged sword. Readers complain about advertising or paywalls, but also complain when writers aren’t paid:

There might still be hope. Online publishers have seen their staffs begin to unionize with websites like Gawker and VICE adopting union contracts while other properties like Huffington Post are negotiating. Unions have meant pay increases, but whether this is sustainable as ad revenues decline and venture capital disappears remains to be seen.


Ian MacAllen is the Rumpus Deputy Editor and founder of English Kills Review an online literary magazine focused on books, authors, and New York City. His writing has appeared in Little Fiction, Vol 1 Brooklyn, Joyland Magazine, Chicago Review of Books, Fiction Advocate, and elsewhere. He holds a Master’s Degree in English from Rutgers University and lives in Brooklyn. He tweets @IanMacAllen and is online at IanMacAllen.com. More from this author →