Residual earning is far better than fixed-fee work
I have a day job producing websites for a UK broadcaster. It's decent enough work, and I could be doing far worse things with my life. But lately I've been thinking about the traditional job model in the UK (and elsewhere), and whether the convention of working until you retire is particularly effective or healthy. I suspect not.
In the TV and film industry, a residual is a payment made to the creator for subsequent showings of a piece of work. They're quite often paid for TV reruns as a form of royalty payment. The actors get a small cut, but the best deals are had by the people who created the concepts (characters or series) in the first place.
In the UK, for example, the estate of Terry Nation receives money each time the Daleks appear on Doctor Who. Mark Burnett, who created The Apprentice in America, gets paid from the BBC version. Ricky Gervais and Stephen Merchant, meanwhile, get a kickback for every episode of the US version of The Office, which has made them far, far wealthier than the BBC ever did.
I began wondering if a parallel could be drawn with other fields of work, namely online content creation.
Model A, Model B
Think of a random jobbing profession, be it, say, gardening, removals, sales or services. Chances are that it'll involve client-based work that always needs to continue: once a job is done, you get paid and it's time to move on to the next one. You may be on a regular salary, but the same principle applies.
This happens even at the highest levels, where companies have to keep moving forward to keep their shareholders happy, or else they're out on their ear. People in these jobs need to constantly look to the next sale, the next client, the next job - resting on laurels simply isn't an option. I'll call these Model A professions.
Model B involves making money from residual income. As far as I can see, if it works it's the best of both worlds. And if we look at it in relation to working online, you can be self-employed, so you needn't worry about your next job coming from somewhere, yet you can also have an arm's-length yet mutually-beneficial relationship with some of the biggest players on the web: Google, Apple, Amazon, eBay and so on.
Once a page is created on the web, providing people visit it and there are ads or products on it, it'll make money. It may not be very much, but combined with dozen, hundreds or even thousands of pages across a range of websites it'll soon mount up. This can continue as long as you pay your hosting bills and your page remains popular. As a Model B worker you can make money as you sleep.
In my working hours, I'm a Model A worker. In my free time, I'm Model B.
Model B and the long tail
Then there's the long tail effect. A page you wrote and forgot about can still generate visitors for months and years to come. If it's part of a bigger site which is ranked highly, it'll still continue to appear in search results, and if the content remains relevant visitors will come.
The net effect of this is that there's great value in online archives, particularly if they're built up over time. Traditional newspapers have realised this, which is why publications such as the Guardian and the Times were so quick to give away their content online - they still get paid by advertisers for page views, and having a worldwide audience and content with an unlimited lifespan is far better than a daily paper with a limited print run.
Unfortunately the writers of these newspapers are Model A workers. Once they've filed an article, it's done. They get paid for it, they move on to the next one, and so on ad infinitum. The residual income from the online archives, meanwhile, is far more likely to go to the media company itself, to remunerate the directors for being so far sighted.
Tags: making money