Re: FW: <nettime> rhizome: burn rate

[Mark Tribe <mt@rhizome.org>]

On January 19, Ted Byfield wrote:

>one thing that hasn't come up in this discussion is history -- that is,
>the history of rhizome. for various reasons, i viewed this all from a safe
>and 100% uninvolved distance, so my memory is probably off when it comes
>to details. mark tribe and/or other rhizomatics are free to correct me, of
>course.
>
>mark and a few others 'founded' rhizome soon after he moved from berlin to
>NYC, in the spring of '96. i'm not exactly sure what founding rhizome
>actually involved, other than running a mailing list or two.

rhizome started on feb 1 1996 as a mailing list, generously hosted by 
desk.nl (thanks to walter van der cruijsen). i was still living in berlin 
at the time. i moved to new york in march 1996 and began work on the web 
site. the idea was to build a web-based archive for the email discussion.

>on those lists, there was quite a bit of kvetching about the lack of state
>support for the arts in the US, which led people to suggest some sort of
>one-for-all, all-for-one collectivization. out of that, through the
>machinations of mark and a few others, was borne a dotcom by the name of
>stockobjects, which set out to take these vague ramblings and turn them
>into a business. the 'model' was sumarized in a WiReD article thus:
>
>     Artists initially submit their work under either an exclusive
>     or nonexclusive agreement, and get no money until sale. The
>     exclusive model entitles the artist to 50 percent of the roy-
>     alties when an object is purchased, but the nonexclusive op-
>     tion offers only 25 percent - which, at US$25 for a stock
>     photo, could be negligible.
>
>     Users can sift through the site's library according to cri-
>     teria such as subject matter or rubrics like "Dreams" and
>     "Competition." For a $100 starting fee, subscribers could
>     pay from $25 for a simple image to $120 or higher for ani-
>     mations and applets. Non-subscribers pay double the price,
>     but [COO Garnet] Heraman is quick to note that all pricing
>     is tentative until they can "explore what pricing is pos-
>     sible" after the launch.
>
>stockobjects got some funding; a WiReD article from sept 97 mentions
>$500K, but i remember hearing much higher figures (~$8M rings a bell, but
>i can't back that up).

total funding for stockobjects was about $2m over four years (1996-2000).

>anyway, with the establishment of stock- objects,
>rhizome mutated from a mailing list into a full-fledged in- house *tax
>shelter*. that was when it began actually hiring people.

rhizome was never a tax shelter for stockobjects. rhizome and stockobjects 
were separate business units of one company. members of the rhizome 
community (among others) served as suppliers of stock animations, applets 
and graphics for stockobjects, a new media stock library. these digital 
objects were then licensed to commercial web developers for a fee. the 
suppliers got part of the fee. i still think it was a good idea, but it 
never really took off. stockobjects folded in 2000.

>dotcoms being what they were, stockobjects' finances began to fray, and
>through a messy process mark separated from stockobjects and, i think,
>took rhizome with him.

the process wasn't so messy. in early 1998, adaweb and word both got shut 
down by their corporate parents. i was getting pressure to either shut 
rhizome down, turn it into a more commercial publication for web designers 
(something like web monkey) or spin it off. i felt that we were doing 
something worth-while, so i chose to spin rhizome off as a nonprofit. we 
created a new nonprofit entity called rhizome.org and rachel went with it. 
for most of 1998, rachel was the sole employee of rhizome.org. our total 
budget for that year was under $30,000. it was a very tough time for 
rhizome.org. our office was a desk in the back of postmasters gallery. for 
part of the summer,  rachel and alex camped out at the thing (thanks, 
wolfgang!). in 1999, i left stockobjects and became rhizome's full-time 
executive director. i focused on developing new programs (such as the 
artbase) and on fundraising. we grew fairly quickly from that point on.

>various rhizomatics took to wagging their fingers
>and earnestly hectoring people about how 'it's rhizome dot *ORG* now,
>*NOT* rhizome dot *COM*...' as if people hadn't chuckled at the choice of
>'.com' to begin with.
>
>anyway, i suppose a lot has happened since then, but it's hard to imagine
>what the hell rhizome could possibly have done to justify burning through
>$307,000 in fiscal year 2000-2001 and, even more astonishingly, $444,000
>in FY 2001-2002.

our costs are actually relatively low for a new york-based nonprofit arts 
organization of our size (i.e. range of programs, number of people served, 
etc.). below are actual expenses for a few other ny-based nonprofit arts orgs:

the kitchen spent $1,646,312 in 2001
creative time spent $965,967 in 2001
artists space spent $721,110 in 1999
bomb magazine spent $556,476 in 2001
turbulence spent $138,329 in 2000

it is difficult to compare since unlike rhizome some of these orgs have 
physical spaces or print publications while others offer fewer programs. 
all of these organizations do a lot with very little. my point is that 
rhizome is in the ballpark. our funds are spent very carefully, very 
efficiently and very effectively.

>and i'm not sure i'd en- tirely believe what various
>rhizomatics say: for example, francis whang (director of technology) talks
>about 'massive hosting fees,' but the FY 2000 tax forms say hosting cost
>$5,568 that year. and sinced rhizome's been trying to sell people on
>rhizome as a host- ing service, clearly they view this as, as the saying
>goes, 'a pro- fit center.'

the hosting fees on the budget are all related to the hosting of the 
rhizome.org web site--not our new hosting service. our hosting costs aren't 
that high, considering our traffic: currently around $1,000/month. we could 
find cheaper hosting, but we feel it is important to maintain close to 100% 
up time, to have frequent and redundant offsite backups, etc.

>that cost may well have gone up since then, but
>i'd be very surprised indeed if it's outstripped legal fees, which were
>FIVE TIMES that figure in the same year. crikey.

our legal fees are all in-kind expenses, meaning they are provided for 
free. they appear on the budget in accordance with standard accounting 
practices.

#  distributed via <nettime>: no commercial use without permission
#  <nettime> is a moderated mailing list for net criticism,
#  collaborative text filtering and cultural politics of the nets
#  more info: majordomo@bbs.thing.net and "info nettime-l" in the msg body
#  archive: http://www.nettime.org contact: nettime@bbs.thing.net