Of course you need extreme cred and significant access to industry decision makers, a very tall order (but Lou, knowing Lou, may pull it off)

As indicated above I did share with folks how much I made on my blog, and in the same breath told them that if they got into blogging hoping to make some money on it, they were going to be sorely disappointed. My day job is running a company that does high-end internet strategy and design for Fortune 500 companies, so I know a thing or two about the Web, and the only viable revenue model for 99.999999% of blogs is a combination of advertising and affiliate fees. Those very few folks in the wine world that can charge money for access to their blogs or web sites can only do that because BEFORE they had those sites, they built up tens of thousands of readers and were already “market makers” with their scores.

At the moment, there is incredible downward pressure on online advertising rates, known as CPMs which are the basic unit of currency in online advertising. CPM stands for Cost Per “Mega” or Cost Per Thousand impressions. It’s what any advertiser will pay for having their ad seen 1000 times on any site. At the moment, only a very few properties on the internet get rates above $25. The average, especially in this economy is rapidly dropping to around $10. A little math will tell you that at a $10 CPM rate if the average web viewer looks at 2 pages on a site, in order to make, say $75k a year, a blogger would have to have 312,500 unique visits per month, or north of 10k visits per day. The most popular wine blogs on the internet are below half that at the moment (perhaps with the exception of Eric Asimov’s blog which benefits from the NYT readership), and the competition for eyeballs is getting even more fierce.

If that 10k readers per day seems even somewhat attainable, let me pour a little more rain on the parade. Getting $10 CPMs for a wine web site is near impossible because the audience is not highly valued by the market, and the main people who want to advertise to readers (big beverage companies) don’t know jack about the internet and internet advertising for the most part.

Wine bloggers have few options for getting ads on their sites unless they are extremely savvy technically, and so generally must relie on ad networks to serve ads. The average CPM that these networks offer those bloggers: $0.75 – $1.50.

There may be some alternative revenue streams appearing in the near future for wine blogs but they will concentrate on the top blogs that have both street cred and high readership, and even they will probably not be enough to allow a wine blogger to support themselves just on wine blogging alone.

Keep those day jobs folks.

Your post was thought-provoking and it had me contemplating the topic quite a bit this weekend.

I am in total agreement with you that pay-for-access content is not going to work for bloggers, or only for those bloggers with serious cred and significant value-add. An example (sort of), is Jancis Robinson’s pay-for-access Purple Pages, which includes on on-line version of the Oxford Companion and a forum that is frequented by significant wine experts (MWs, etc.) – even Jancis’ writing is not enough.

What we don’t yet know is what kind of new revenue streams may develop for on-line websites like blogs, even outside of just being associated with blog writing or video content, which could result in the possibility of larger revenue-making for bloggers – that’s the part that will ensure that ride ahead is interesting and probably wildly unpredictable.