AOL Buys Huffington Post: Can You Spell B-A-C-K-P-A-Y?

By Way of NWU President Larry Goldbetter <> Newsletter

The National Writers Union is launching a campaign to raise the pay scale for online content writers. If there was any doubt as to the need for such a campaign, look no further than the recent purchase of the Huffington Post by AOL for a cool $315 million.

In an excellent Op-Ed piece in the LA Times (2/9) Tim Rutten writes, “To grasp [HuffPo’s] business model, though, you need to picture a galley rowed by slaves and commanded by pirates. Given the fact that its founder, Huffington, reportedly will walk away from this acquisition with a personal profit of as much as $100 million, it makes all the Post’s raging against Wall Street plutocrats, crony capitalism and the Bush and Obama administrations’ insensitivities to the middle class and the unemployed a bit much.”

That $315 million sales price and the $100 million personal profit has been built on unpaid labor. Yes, unpaid labor. The worst part is, Huffington is not the only one, or even the biggest. The Big Three “content farms” are owned by AOL (Patch), Yahoo, and Demand Media. Demand Media last December had an IPO that valued the company at $1.5 billion and boasts of having 10,000 freelancers to whom they pay a penny-per-word. You read that right, a penny-per-word. What’s more, Demand Media has contracts with the San Francisco Chronicle and the National Football League, among others. For their part, HuffPo will feel right at home with AOL, where PATCH contributors earn $50 an article … and less.

The new world of electronic journalism makes it much easier to get published. Yet, it’s also made it much harder for harder for writers to make a living. Websites keep their finances secret.  They encourage writers to submit content with pleas of poverty or calls to civic commitment. Writers are understandably confused. These sites are making money and preaching the civic good, but they are unwilling to pay fair wages.

That is why it is critical for NWU to profile these sites – their backers, practices and finances – so we know with whom we’re dealing. While, thousands of journalists have been tossed out of newspaper, TV and radio news rooms over the past decade, writers find themselves pushed into below minimum wage positions when they work for these online sweatshops.

It’s not just writers and editors who will pay, but journalism and those who consume it. To quote Rutten again, the content farm “may start with exploiting reporters and editors, but it inevitably ends up exploiting its audience.”

AOL’s purchase of the Huffington Post should set off alarms as the content farm, or electronic sweatshop, just got bigger. This is a big step down an already well traveled road. We are gathering the forces for a fight. If you work on a content farm or know someone who does, get in touch. While the owners count their millions, those forced to work for free are organizing.

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