Attention Alchemy: Making Money on Web3 News

The arcane process of turning views into revenues.

Turning attention into cash is an arcane process. Most assume that advertising—a few banner ads and the occasional newsletter shoutout—is sufficient to feed something as hungry for white-collar labor as a media organization. It’s more nuanced than that. 

In the subsequent sections, I break down the main revenue models in crypto media: advertising, subscriptions, live events, deal flow, serial financing, and junk tokens. For simplicity’s sake, most of my analysis is based on crypto news organizations, as that’s what I best understand. However, these models are generally applicable to other types of media.

Media is an Inhospitable Environment

But first, some context on the media industry. Not only is the process of generating revenue arcane, it is also a miserable business. Margins are low. Most media organizations break even or plain hemorrhage money. Barriers to entry are low. Anybody can spin up a blog or channel and play expert. Costs are high. Scaling content production is directly a function of employing an ever-growing number of fickle and expensive knowledge workers.

It is no wonder that crypto media is littered with the carcasses of failed or failing companies. This inhospitable environment is the reason why media companies have tried just about everything to make a buck.

Advertising

Even in ancient times when people got their information from sheets of wood pulp dyed in soy, ad placements existed. It is the most straight-forward of the revenue models and works as follows—get attention in bulk and misdirect some of it to companies hawking their wares.

These advertisements can come in many different shapes and sizes. Web banners, press releases, sponsored content, affiliate buttons, and so on. There are two main methods to finding advertisers: automated ad networks and manual outreach by sales team.

Automated Placements

For automated placements such as web banners Google Adsense is typically the intermediary, though other providers do exist. These providers connect media organizations with companies buying advertising and take a fee.

These ad networks also automatically optimize the type of ads served to maximize revenue. Based on how many people accidentally click on the ads while they’re reading or watching, the model will continue to learn to serve ads that are ever more annoying and even easier to click on accidentally. So, if you ever see an advertisement gyrating and popping out of your phone in 5-D touting something like a gambling website (the highest bidder for your attention) that’s why.

Direct Sales

The more ambitious approach to selling advertising is through dedicated sales teams. Everything except for banner ads and press releases require some sort of manual sales process, though all types of advertising can be sold for higher rates if sold directly to buyers. Usually, sales teams are composed of the most charismatic and conventionally attractive professionals the host company can muster.

These professionals are given the task of carpet-bombing leaked email lists and hanging out at conferences. There, they wait in ambush. When an overworked marketing manager for some no-name startup comes bumbling along, they pounce.

Said overworked marketing manager is responsible for increasing his no-name startup’s quarter-over-quarter active users by 12.47%. That way, his no-name startup can milk more money from indiscriminate VCs (vulture capitalists), who in turn, can milk more money from compulsive online gamblers.

Since these no-name startups wish to appear noteworthy to catch the attention of VCs, they’re willing to pay top dollar to place their brand in close proximity to a reputable media organization. Thus, the news companies that hire the greatest number of people who sound smart on Twitter, make the fewest obvious factual errors, and spend the most on slick websites can command the highest prices for direct sale ads.

Subscriptions

Although subscriptions may seem like one of the most sensible options for funding a media organization, in reality, it is perhaps one of the least viable, at least for news. That said, one of the big advantages of subscriptions is that the added cost to service each additional subscriber is close to zero. Whether a media organization has ten or ten million subscribers matters not, the cost is the same to service all of them. If done correctly, this can mean big bucks.

There are three main classifications of media subscriptions: better content, parasocial content, and research content.

Better Content

The reasoning behind offering a ‘premium’ content subscription is that consumers are tired of content that sucks. Following that line of reasoning, if a media company offers content that doesn’t suck as much, people would be willing to pay a small fee for it! 

Unfortunately, nobody is willing to pay for better news. All news websites offer pretty much the same content with different packaging. To make matters worse, nobody likes to read anymore. But that’s a bigger issue to unpack.

Media organizations are experts at discreetly plagiarizing one another. They all look at the same sources and produce the same stories with slightly different headlines. If one organization gets a scoop, then a bigger news outlet will just cite them and siphon their traffic anyway. 

The problem is so pervasive that even if the original source is probably junk, there is such a hurry to publish that most news organizations won’t even bother checking if the news is real. The advent of generative AI, which is the most skillful of plagiarists, make this issue even more pernicious.

News is a commodity. Among Web3 news organizations, it is a race to the bottom to cover the same content faster and more cheaply. As a result, most consumers of news are not willing to pay a single penny for better-written and sourced content. (Probably because your competitors will rewrite your article with ChatGPT and spend no more than $3.50 editing and fact-checking it before offering it to their audience for free.)

Parasocial Content

Influencers have found a clever way around the plagiarism problem. It is actually really hard to steal someone’s face and image, Invasion of the Body Snatchers style, and plagiarize it for a gain. If you are a moderately attractive woman, or a man who is exceptional at producing hackneyed blog posts and podcasts, then you can monetize your content in a different way. 

People who are invested in crypto don’t have friends—except during the three months of peak crypto bull market, when everyone wants to be your friend. Under ordinary circumstances, normal folks think people who are into crypto are whackjobs. Yet, people who are interested in crypto tend to periodically have lots of disposable income, and they dislike not having any friends.

Therefore it is sometimes worthwhile for people who are into crypto to pay someone—like Ben Armstrong, Anthony Pompliano, or Rachel Siegel—to pretend to be their friend. Then, these lonely crypto addicts can hang out on Discord with these celebrities and read their well-written newsletters and listen to their very smart sounding podcasts and not feel so lonely. Win-win.

News organizations, too, can take advantage of lonely crypto investors. In the business, this is called “community building.” Unless someone has a diagnosis from the DSM-V, most people cannot, and probably should not, develop an emotional connection with a cold, heartless media organization. 

Media companies can get around this problem by using a front person. Ideally someone that is white-passing. Someone like a Larry Cermak, or a Camila Russo, or a Ryan Sean Adams. These charismatic people could plausibly be your friend, at least at a distance. They personify the media brand and make its products more relatable, which can seriously help sell subscriptions.

Research Content

The most difficult type of paid content to offer is research. By combining facts, figures, and observations in ways that are inscrutable, it is possible to create content that is difficult for other media companies to rip off discreetly. 

Usually, this kind of content is focused on allegedly helping people choose less-bad investments. Or, it attempts to decipher the bizarre workings of the industry and the people in them (glorified gossip). 

Most of the time, the research has no value but is sufficiently baffling that people believe that it works. The best example of this are the influencers touting technical analysis-based ‘research’ and data. Most academic studies looking at technical analysis indicate that it doesn’t work. But men got jealous that women were finding so much joy in astrology, so men invented TradingView.

Occasionally, the research does have value. But valuable research has a fatal flaw. If it truly was valuable over the long-term, then the research outfit may as well stop selling subscriptions and invest in the opportunities themselves. As I’ll talk about in another newsletter, all roads in crypto lead to vulture capitalism.

The other problem with research is that it is time-consuming and expensive to produce. Organizations going down this monetization route have to keep lots of expensive smart people on the dole. Keeping researchers loyal for more than a year is also a problem for media companies. If they’re any good, these smart people are prone to getting poached by various types of companies engaging in vulture capitalism.

Another big problem for media companies is that the sale of subscriptions, especially research subscriptions, is more or less proportional to crypto market prices. The same goes for web traffic. All of these relationships point in the same direction: This relationship results in revenue flows that make Web3 media organizations especially vulnerable to the market.

When a news organization is selling lots of research subscriptions, they usually think they should hire more expensive smart people to produce even more research so they can make even more money. Then, the news organization has a rude awakening when prices drop and subscriptions stop selling.

Suddenly, the big newscorp is left with a bunch of smart people scratching their heads trying to figure out why the heck they’re losing money.

Conferences and Live Events

One of the most reliable ways to build a sustainable media business is by hosting conferences. Even though most crypto enthusiasts are unwilling to pay $5 a month for a news subscription, many of them are willing to pay $500 or more to party and gossip for a weekend.

Media organizations are uniquely positioned to host these kinds of events. People in crypto are wary of being sold too much uninvestable garbage, and rightfully so. It is surprisingly difficult to tell legitimate companies apart from outright scams without expending considerable effort. As such, the most experienced crypto investors have given up trying to tell the two apart, in an effort to conserve valuable brainpower for partying, and simply buy everything they happen across.

Luckily, media organizations are decent gatekeepers. After evaluating enough press releases, journalists develop an intuition for discerning uninvestable garbage from borderline-investable garbage. So a media organization will make its journalists do some cursory filtering to make sure there aren’t too many charlatans promoting themselves at conferences.

People also tend to trust media organizations because they don’t have anything more to sell them. Other than the conference ticket itself, the only other thing for a media organization to sell is a news subscription that the person would never buy anyway.

Usually, these conferences are designed around a series of talks and panels. The best way to get commoners to buy tickets is to try and get the crypto-celebrities with the most mainstream clout to speak. The golden goose is Vitalik Buterin, but conferences will settle with a B-tier celebrity like Michael Saylor, Francis Suarez, or Brad Garlinghouse barring that. 

Most people are happy to speak because it makes them seem more credible when they’re endorsed by a reputable media company. Though, there certainly are speakers with social anxiety, like Buterin, that require more coaxing to speak at conferences.

Then, between talks, there are a series of booths where crypto companies will attempt to sell attendees and each other various half-baked products. Conferences make big money selling these booth spots. 

Conferences also make big money convincing these same companies that a ‘sponsorship,’ which essentially means the conference will put the company’s logo on banners cluttered with other logos in various hard-to-see places around the conference, is an effective use of marketing dollars. These sponsorships cost anywhere from $5,000 to $100,000+. 

Who Actually Attends?

The curious thing about these conferences is that nobody who works in crypto actually attends the conference. I’d say half of them don’t even buy a ticket. They already know that the speakers will reuse the same talks from the last conference everyone attended. Nor are these veterans interested in getting wheedled by marketing interns tasked with selling half-baked products in the trade booth gamut between talks.

Where the wheeling and dealing happens is at side-events adjacent to the conference. These are parties hosted by crypto companies and vulture capital firms looking to get the attention of influencers and newly-wealthy marks. These are the parties where people trade convoluted investment ideas, swap allocations in seed-stage deals, and share insider information on what’s really happening inside of utterly opaque crypto startups. But I’ll have to save the details on that for another newsletter.

What’s Up Next

Advertising, subscriptions, and live events are the three ‘legitimate’ ways that Web3 companies make money. In my next issue, I will cover the more unsavory ways that media companies make money—including deal flow, serial financing, and junk tokens. In my third and final issue on media monetization, I will showcase crypto media companies that exemplify the different revenue models through some home-made case studies.

I’ll see you next time.

With humility,
Mitchell Moos

P.S. Just like every other human I’m a sucker for praise. If you found this newsletter thought-provoking hit that like button and share it with a friend. It doesn’t cost you anything and it would make my day.

Bonus Section for Movie Geeks

First published in 1954, The Body Snatchers by Jack Finney spawned four big screen adaptations, the most famous of which is the 1956 film Invasion of the Body Snatchers. The film was selected in 1994 for preservation in the Library of Congress because of its cultural significance.

The film’s storyline follows an alien invasion of a fictitious California town. Plant spores fall from space and grow into large seed pods. These pods produce visually identical copies of humans, except these copies are devoid of all human emotion. Once mature, the copies seek out the original humans they copied to make sure they vanish.

The crypto mind virus is much like these spores from outer space. One day, you will wake up and notice that your loved ones have lost all interest in their hobbies and family. Then, they start asking you about “hard money,” “decentralization,” and “doggie coin.”

I’m sorry to tell you, but at that point it is already too late to save them. Any show of emotion on your part will only reveal to the alien invaders that your body is still virgin and unsnatched.