Big Blogger Pay Cuts At b5Media

by Michael Arrington on October 2, 2008

Toronto based b5Media is changing the way it pays bloggers in itshundreds-strong blog network, according to an email memo sent out to partners by CEO Jeremy Wright and copied below.

Gone are guaranteed payments of “$100-$200/month” plus bonuses for traffic. In its place are much smaller guaranteed payments plus monthly bonuses for “press coverage you or your blog gets, exclusive interviews you land and growth of your blog.” Blogs can also get a quarterly bonus based on a scoring system.

The traffic bonus system was over-rewarding bloggers, says Wright. The new system will likely result in a big pay cut, but Wright says it’s necessary to align incentives:

I’m sure by now you’ve run your blog through the system above and realized that (with a handful of exceptions), due to the change to Omniture as a stats package, your pay will go down. For some it will go down significantly. Obviously this isn’t the intent of the new pay system, it was just the flaw in the previous stats package. For the last two years, b5 has been effectively paying bloggers 2-3x more in traffic bonuses than they were actually getting. While, again, this isn’t a blogger’s fault, neither is the new pay system about “cutting pay”. Any reduction in pay is due almost exclusively to the reality of using an inaccurate pay system in the past vs an industry standard third-party audited system going forward.

While this is certainly not good news for the already low paid bloggers in the b5Media network, it isn’t necessarily a sign that the company itself is failing. Rumor is that b5Media has raised a new round of financing and will be announcing it soon. In April, we reported that merger discussions with Technorati fell through at the last minute.