Wowio, which had such a promising start, is not looking so good anymore. After making significant (and much grumbled-about) changes in their contract structure earlier this year and being acquired by fellow media company Platinum, Wowio is now three weeks late paying its authors and artists what they are owed. This is the second quarter in a row that their author payments have been substantially late.
Not that most authors are necessarily owed very much anymore. T. Campbell, writer for webcomics "Penny and Aggie" and "Fans," stated that his revenue has dropped by 97.3% since the new contract terms went into effect; other creators are reporting similar fall-offs, and many are jumping ship. For authors whose only source of income is advertising and other revenues from their work, this delay in payment can come as a heavy financial blow.
Keeping Silent on Advertising
Wowio is also being mum about how much money it is taking in from advertising on its new "page preview" function, which forms part of the basis for that payment in the first place. According to an article in Comic Book Resources,
"When I asked my contact at Wowio about the current ad rate as recently as last week, she said that the final number is calculated at the end of the quarter," [Bill Williams of Lone Star Press] said. "I could not even get a hint at the CPM [advertising cost per thousand page impressions] for the ads on the pages viewed."
"I read the new contracts and immediately realized it was a bad deal for creators and authors not to know what rate their page views were generating," [writer] D.J. Coffman said. "Especially bad for the webcomic authors publishing collections there, because the preview idea was basically competing with their own archives and advertising on their own sites."
Even artists who were formerly among Platinum and Wowio’s biggest boosters are being turned off by their behavior. D.J. Coffman, who offered his work through Wowio and formerly helped promote it at conventions, has had plenty of bad things to say about its business practices lately—taking Wowio to task for such poor decisions as spending more money on fancy dinners than on artists’ booths at the Chicago Comicon.
Return of the Dot-Com Era
The CBR article suggests Wowio’s behavior follows a pattern seen often during the dot-com boom and bust—the "if you build it, they will come" philosophy of paying out venture capital now in the hope that you can find a source of income to make it back later.
From the outset, Wowio paid for free downloads even of books that had no advertising sponsors, when what they perhaps should have done was charge a small fee for unsponsored works. As a result of this (and, perhaps, of too many expensive convention dinners), they are now having trouble paying their authors and artists on time.
This problem also affected Themestream, the paid-blogging site for which I wrote back in the dot-com era, and Talkshoe, the paid-podcasting site that hosts my shows. Themestream went bankrupt and folded, and Talkshoe recently stopped paying its podcast hosts, in both cases due to a critical lack of advertisers to support those payments. You would think that start-ups would have learned better by now.
By being late with its payments (not to mention considerably decreasing their size), Wowio is alienating the creative talent that is responsible for its product—and starting a vicious cycle. The more creators leave, the less Wowio can afford to pay the ones who are left. Unless Platinum and Wowio can get their act together, there may not be many quarters left in which late payment will be a concern.
This also calls into doubt the future of ad-sponsored e-books and other downloadable media. If you cannot get enough advertising revenue to support it, how can you afford to make your product free?
Related: Other Wowio coverage at TeleRead.