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Applying a Music Business Model To a Blog

kdawson posted more than 5 years ago | from the try-anything dept.

Businesses 43

An anonymous reader writes "Many of you may be familiar with Mike Masnick, from the site Techdirt. Beyond just chronicling tech stories for years, he's also been following various music and media industry business models as well. While he's usually among the first (like Slashdot) to express dismay at silly activities from the recording industry, lately he's been cataloging numerous success stories, like business models from Trent Reznor, Amanda Palmer, and Josh Freese. Mike and Techdirt are now taking things a step further, and wondering what would happen if they took the lessons from those success stories and applied it to a media publication: their own Techdirt. The result is 'Connect with Fans + Reason to Buy.' Check out the very special offer for the RIAA."

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who can afford that? (5, Insightful)

alain94040 (785132) | more than 5 years ago | (#28774905)

Some monetization techniques make sense (charging $5 for a premium account), but I'm shocked by this one:

Techdirt Reviews Your Business Plan, only $5,000. Describe your business, and what you're trying to accomplish... We'll run it as a case on the Insight Community

There are better ways to crowdsource a business idea [fairsoftware.net] . At least you'll get unbiased feedback (caveat: I'm one of the founders).

To everyone starting out there: conserve your cash, don't spend it on any of those "magical programs" or consultants that promise you the moon.

What almost makes more sense, if you really want to pick the brains of the TechDirt guys is to fork the $1,000 for spending one day with them (even tough I think it's only worth maybe $200).

Re:who can afford that? (2, Insightful)

Trepidity (597) | more than 5 years ago | (#28775205)

That part in particular seems more like a middleman role, proposing that Techdirt, with its built-in connections to fans, platform for distribution and marketing of its content, and so on, sell that access to people who want their material (like a proposed business plan) distributed through that network. That's analogous to what traditional record labels, book publishers, and movie studios do, more than it resembles Trent Reznor selling his own products directly to fans without a middleman.

Re:who can afford that? (1)

reiisi (1211052) | more than 5 years ago | (#28775747)

So, what you're saying is, "His business plan sucks and mine doesn't."?

Just kidding. Sort of. Loosen up. Competition makes the market larger for now.

Re:who can afford that? (2, Funny)

idontgno (624372) | more than 5 years ago | (#28775823)

There are better ways to crowdsource a business idea.

True. [slashdot.org] And we're free, and worth every penny.

What almost makes more sense, if you really want to pick the brains of the TechDirt guys is to fork the $1,000 for spending one day with them (even tough I think it's only worth maybe $200).

Meh. You monetize your business model, TechDirt monetizes its business model, but our abuse ^w advice is completely free.

Re: "Money for Nothin', Abuse for Free..." (1)

TaoPhoenix (980487) | more than 5 years ago | (#28780153)

What? I PAID hard cash a couple times to support my abuse fix unhindered by having to click-to-adblock ads!

Re:who can afford that? (0)

Anonymous Coward | more than 5 years ago | (#28777751)

Jesus, do you really have to spam your fucking fairsoftware this often on Slashdot?
http://www.google.com/search?q=site%3Aslashdot.org%20%22[fairsoftware.net]%22 [google.com] .

Re:who can afford that? (1)

Procasinator (1173621) | more than 5 years ago | (#28780549)

Most of them results are from sigs, so that search is probably exaggerating how often he does it.

RIAA model (4, Funny)

Hatta (162192) | more than 5 years ago | (#28774959)

Here I thought he would be suing his readers.

Re:RIAA model (0)

Anonymous Coward | more than 5 years ago | (#28775301)

I thought the exact same thing, reading the title at first glance... like suing its readers (and non-readers) for getting information from other places rather than his.

Re:RIAA model (1)

rxvt-unicode (1556405) | more than 5 years ago | (#28776343)

He's at step one, charge up the nose, step two is "WHY DO I HAVE NO CUSTOMERS" Commence suing non-customers, and requiring souls for payment.

Re:RIAA model (1)

EchaniDrgn (1039374) | more than 5 years ago | (#28776527)

requiring souls for payment.

And Kittens! Don't forget the kittens.

Re:RIAA model (1)

sorak (246725) | more than 5 years ago | (#28782623)

Here I thought he would be suing his readers.

I thought he was going to stop paying his writers.

Bad idea (1)

DoofusOfDeath (636671) | more than 5 years ago | (#28775081)

Applying a Music Business Model To a Blog

Sue everyone who links to it? BRILLIANT!!!

Re:Bad idea (1)

W2k (540424) | more than 5 years ago | (#28775161)

I believe the 2004 olympics already tried that [jayallen.org] .

Re:Bad idea (3, Insightful)

OMEGA Power (651936) | more than 5 years ago | (#28775235)

Why only people who link to it?

A true student of the RIAA would just start suing people at random and offering them the chance to "settle" for less then the cost of defending themselves at trial.

Re:Bad idea (2, Funny)

DoofusOfDeath (636671) | more than 5 years ago | (#28775339)

Why only people who link to it?

A true student of the RIAA would just start suing people at random and offering them the chance to "settle" for less then the cost of defending themselves at trial.

No, a true student of the RIAA would sue you for this current discussion. And then get a judge to slap you with a gag ord----

Easy Applying Of Music Business Model To a Blog (1, Funny)

Anonymous Coward | more than 5 years ago | (#28775299)

Unfortunately, it's the music business model where your agent steals all your royalties and money.

Change we can believe in! (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28775377)

YES WE CAN!!!!!! [google.com]
.
.
.
.
.
.
.
continue to issue signing statements, even though we criticized the former administration for doing so.

Oh Really? (1)

notarockstar1979 (1521239) | more than 5 years ago | (#28775379)

1. Connect with fans
2. Reason to buy
3. Profit!!

Crap, he figured out number 2!

Nothing to See Here (0)

Anonymous Coward | more than 5 years ago | (#28775743)

Move along people.

offer? begging to be bribed? (1)

reiisi (1211052) | more than 5 years ago | (#28775811)

I think they should have added three more zeros. At a hundred million, the RIAA might come calling. Not to pay the money, but to try to bargain and bluster the price down.

The offer I'd have given is to sue them for reading the site without permission.

Their problem: Balancing the pricing! (2, Interesting)

Hurricane78 (562437) | more than 5 years ago | (#28775961)

The idea in itself is great, and what I always said. The only problem is, that their prices are not from this world.

They absolutely and without discussion need some proper pre-buyer pricing acceptance feedback.

What I recommend, is asking the user, what he would like to pay. And only showing the price you want, after they chose their price. Then when their pricing is above it, you say that they can get it cheaper, and when it is below it, you say that you're sorry, but that you do not want do give that away for that price.
This way you get instant feedback and a free survey. Also people feel involved.

Then you change the prices to the value, where "price * people who want to buy at that price" is maximized, and send anyone who did not buy but might now, a little note about the change in price. Make it clear that the price fell because of their feedback.

Ok, the only problem with this would be, that it could be manipulated, because the people could give more than one vote, or might not be honest in the first place.

Anyone got a real solution for this? (I bet there is a solution that you learn when you study economics & co. Which I never did.)

Free Content? (5, Insightful)

NeRMe (159557) | more than 5 years ago | (#28776067)

I'm familiar with Mr. Masnick and I've seen him speak about his "Connect with Fans + Reason to Buy" model for musicians. It seemed to make sense. He even attempted to squash the perception that this model only works for established musicians. I was sort of buying his mantra of having music be free and having it act as a loss leader. I'm a musician myself, so this is was all very pertinent.

Recently, my brother visited from New Zealand. He's a professional record producer and sound engineer, and he's very interested in questions like this as well.

I told him about this talk I had just seen and asked him what he thought. He thought that it was ridiculous to be a musician and have your primary product, the art that you create, be free, and try to make money off of things such as t-shirts and dinner nights with fans. He pointed out that people do in fact pay for music online, even when using a site such as ThePirateBay. They pay their ISPs every month. They are will to pay for this content. He called this the "swindle of the century".

See, this stuff matters very much for him. He's not a brand that he can sell to fans. He's a brand that he sells to record labels and musicians. He can't survive off of selling t-shirts with his face plastered on them. This model doesn't get him payed and depends on a functional industry to operate. Contrary to popular belief, it is not any easier to get a great sounding recording than it was 25 years ago. Great recordings and mixes still take a lot of talent, and that talent doesn't come cheap. How is a burgeoning young band or artist supposed to get studio and mixing time? $12,000 would be a budget recording and mixing session, good enough for maybe an EP. You can be sure that Radiohead and NIN are spending a lot more than that.

Take a look at Time Warner or AT&T's broadband advertisements. They've got tiered prices, based on bandwidth. Both have similar columned designs showing what plan works for you. Both have "Downloading music." Whose music, dare I ask? Listen, I know this opens up a huge can of worms, because Time Warner and AT&T both pay their own upstream providers, but you get my point. People are not getting music for free. They are paying for it, only the artists or the owners of the content don't see a dime.

I remember when I first heard about ESPN360.com. It made me slightly furious. A website that only works for certain ISPs? Well, that goes against the whole free love on the Internet thing, right? But it just clicked for me. This actually makes sense. ESPN nailed it on the head. They are forcing ISPs to pay for the content, while leaving it free for the end user. This would work brilliantly for music.

Imagine if the RIAA decided to make an ESPN360-like service. All music, for free. The catch? Your ISP is paying the bill. You can't tell me that the consumer wouldn't use this service and not pick a local ISP that offered it, even if at first it cost a little bit more than some other provider.

I know there are TONS of holes in these lines of though, but the madness has got to stop. People are paying for all of this content but it is not getting to the people that actually make the content.

Re:Free Content? (4, Insightful)

Leviathant (558659) | more than 5 years ago | (#28777679)

When a band saves up enough to pay for a producer and sound engineer, they can hire your brother. Bands and artists don't need studio time and mixing time the way they used to - you can handle a LOT of that yourself at a fraction of the cost, thanks to inexpensive recording hardware and software. Won't sound as good as a well practiced producer? Some of my favorite music sounds like balls from an engineering standpoint. In fact, as bands get more and more budget and afford better production, more often than not, the actual quality of the music goes downhill anyway.

As far as record labels getting a cut of ISP fees, that's a bogus argument. When I pay for DRM-free MP3s from Amazon, the label gets MORE than their fair cut, same as it ever was. They've been making money hand over foot, and rather than reinvesting it into researching decent business models, they pocketed the money, financed their own lavish lifestyles.

Yes, I pay for my internet connection. Websites pay their hosting bills. No one deserves a cut of that unless they're providing me with an extra service. That whining sound that comes out of buggy-whip vendors, I'm sorry, the established music industry, that's the sound of an overinflated sense of entitlement being emitted by greedy, short-sighted people out of touch with reality.

You're upset about ESPN360? I don't even know what that is, but apparently ESPN has their thinking caps on where the RIAA sat on their thumbs.

Re:Free Content? (2, Interesting)

Moridin42 (219670) | more than 5 years ago | (#28777793)

Your brother is a producer and an engineer. No kidding he can't sell tshirts to fans. He isn't the musician. Musicians market to fans. Or they would, if the record label they signed with didn't agree to do that part for them. Your brother, as a recording engineer, markets himself to musicians, not fans. The fact that he can't make money from fans is entirely pointless. He isn't supposed to make money from fans. His work is done for the artists, and his pay should be negotiated with the artists. Artists can opt to either pay people like your brother for their specialty and expertise, or they learn to do it themselves. Or, they're cute girls, and they talk some recording geek into doing it.

If they're a new band, they can sacrifice and save to be able to afford a quality professional. They can find/develop their own sound engineers. They can become their own engineers. Pretty much the options that bands have always had. Only now its easier to do an adequate job with some software you can run on your home machine. Will it be Reznor level of quality? Well .. no. But new bands aren't likely to hit that mark, anyway. And it won't have anything to do with the recording engineer they choose, if you catch my meaning.

ESPN360 isn't free to the end user. The cost of the service is merely distributed to all the ISP's customers. Even if you couldn't care less about sports, you pay. If you want to go that route, you can start paying me for .. well .. nothing that you'd want, I'd imagine. But since you're not concerned with that sort of requirement for a business transaction, I'm okay with it too. We'll even bury it in the fees for your ISP. Or your property taxes. Or whatever. Something you already pay for, so that it'll be "free to you" too.

Re:Free Content? (3, Insightful)

lennier (44736) | more than 5 years ago | (#28777893)

"He pointed out that people do in fact pay for music online, even when using a site such as ThePirateBay. They pay their ISPs every month. They are will to pay for this content. He called this the "swindle of the century". "

Your brother's argument restated, in the 1970s, when cassette tapes first arose:

"People DO pay for music. They pay their power utility, their hi-fi manufacturers, their living room lounge chair manufacturers, their carpet installers, their landlord/mortgage company, their supermarket... so we should add a 'music bill' to all of these.

Or maybe just your electrical power company - they're the prime culprit. When you think about it, paying for electricity without paying a music licence is outright theft!"

The problem is that an ISP isn't selling a content licence; they're just selling the service of moving bits, and they shouldn't care what those bits represent. And as the copyright industry has long been at pains to grind into us, bits are not licences.

If you're going to roll bits in WITH content licences, then the price for equivalent Internet service is going to go way up. We'll all have to have mandatory long-term subscriptions to iTunes, or the equivalent. (In which case, if you want to go that route, funding it through taxes might be a sensible proposition; since what you would have created would be a natural monopoly, to which efficiencies of scale and fairness/equal access would need to apply, and a national government seems like the best institution created to address such issues.)

"I know there are TONS of holes in these lines of though, but the madness has got to stop. People are paying for all of this content but it is not getting to the people that actually make the content."

No, they're not paying for the content at present, so nobody's actually being 'swindled'. That's the whole problem. Consumers (and servers; nobody's getting a free bandwidth ride) are merely paying the marginal cost of *distributing* that content, which is near-zero, and makes no discrimination between 'free' and 'copy-restricted' content. What is wanted is a system that somehow funds the much bigger *creation* cost of content (at least for certain types of capital-heavy content like studio recordings; webcomics and funny blog posts might have distribution costs that actually outweigh their creation costs), preferably without setting up an industrialised, automated prison-state system to ensure compliance with your Mandatory Monthly Potential Happiness Bill.

Re:Free Content? (0)

Anonymous Coward | more than 5 years ago | (#28778239)

Why do people keep wanting to turn the internet into television? Tv is horrible. And you are the first argument I've heard for turning the internet into cable television, which is so much more evil.

I don't pay for ESPN360 crap, and I'm glad. I don't use it. I wouldn't may for music access from my ISP because again, I would not frigging use it.

I kind of like this whole anachronistic "I'll buy your album and go see your concert and buy the tshirt" model. I saw Trent Reznor twice this year, bought tshirts and am still buying his albums whenever they are released.

Anyway, the internet is not a medium to push a product. it is not the foundation upon which to build your business. It is a communications medium, You can do that if you wish, but don't change the internet to fit your business model. You will fuck up the internet, just like the powers that be fucked up TV.

Re:Free Content? (1)

vadim_t (324782) | more than 5 years ago | (#28778693)

I sent an email to my ISP, and ESPN as well, saying that if I ever find my ISP is paying for ESPN or anything of that kind, I'll be switching to another one.

I DO NOT WANT this business model. It effectively means I'm paying for something, whether I want it or not, even if I find it a pointless waste of time. If this gets started, you'll end up with fees for 20 other things, whether you want them or not.

I want one thing only: an internet connection. If I need anything else I want to choose which of the available services to go with myself.

Re:Free Content? (1)

xarragon (944172) | more than 5 years ago | (#28779327)

I can only agree completely.

Re:Free Content? (1)

Waccoon (1186667) | more than 5 years ago | (#28778909)

So, the Internet would be like cable? Given the rise of broadband, that's about the most ironic thing I've heard all month.

Re:Free Content? (1)

migla (1099771) | more than 5 years ago | (#28779543)

I have a pie-in-the-sky solution that will solve musiciands and sound engineers problems (and very many other peoples problems too): "Basic income".

http://en.wikipedia.org/wiki/Basic_income [wikipedia.org]

In short: Just give people enough for basics. Then those who love music, for example, can do what they like and know, even if they don't get paid enough from music alone. Those who just want to slack off in the couch and do nothing, could do that.

The question is if enough people would like to have a better life than the bare necessities for the world to go round, so to speak. I think so.

Re:Free Content? (1)

Scroatzilla (672804) | more than 5 years ago | (#28784217)

Your brother, in a professional sense, really only depends on his talent and not the music business model. His talent (and subsequent reputation) is his primary product; he gets paid to make music sound good. If nobody buys the songs that he engineers and produces, it is no skin off of his back because he was already paid to make it sound good. So it seems like he is merely towing the industry line without giving this free music model its due consideration.

When he started out, did he charge everyone $12,000 for engineering and producing music? Or, did he work cheaply (or even free) in order to get his work out there for people to listen to?

If he-- out of the gate-- started commanding thousands of dollars, then I commend him and the rest of this post is invalid. I suspect, though, that he worked cheaply to have stuff for others to hear. This built his reputation that now allows him to command more money and to make a living.

It is the same with musicians-- they must generate interest before they can even consider making any real money with music. Since putting music online is so cheap, why shouldn't an unknown band make songs that nobody ever heard of freely available? Do you buy songs without hearing them first?* Are you a fan of bands whose music you have never heard?

The point is that cost is no longer a significant factor in the ability of independent musicians to record and make their music available; it is only a matter of time before we start seeing a lucrative non-music-industry route to success emerge from this situation. If I were an industry person, I would scoff at the notion of free music, too, because the status quo would be the foundation of my living.

* Technically, if you buy a CD, you probably do; but for this discussion, I'm referring to online music.

Re:Free Content? (1)

Frantactical Fruke (226841) | more than 5 years ago | (#28796113)

Mind, by that logic the porn industry would be entitled to a much bigger share. I buy a hundred CDs a year, underground music, though, and I do not download non-free music. I would be pretty pissed off at a RIAA tax on my net connection - especially as none of the independent musicians I listen to would get a dime of that.

do we yet understand what we're applying? (3, Insightful)

Trepidity (597) | more than 5 years ago | (#28776095)

I'm not sure we understand yet what the new music business models are, at least not well enough to start applying them to other fields. We have a few examples of things that seem to work, and some blog-based argumentation about why they work, and how those can be generalized. Is saying "let's do that, but for blogs now" really anything more than a really hand-wavy argument that we do New Economy Stuff? Blogs are already pretty much by definition participating in some variety of new-ish economic model. What specifically are they taking from the music business? Just selling shirts directly to consumers is not it; websites have done that forever.

Presumably it means something like, "from observing this experimental phase in the music industry, we've learned some important general lessons about economic activity in the early 21st century, and useful things to do and avoid". But what are those lessons? And are they anything not super-generic, like "sell shirts and stuff"?

Even if Techdirt hasn't given that explanation, I'm curious if anyone knows of a good one. The only book-length discussion of recent music-industry developments (that isn't already dated) that I know of is Ripped: How the Wired Generation Revolutionized Music [amazon.com] (came out about 2 months ago), which is a reasonable historical summary of the past 10 years, with a bit of analysis. It's not exactly a distillation of lessons suitable for universal application, though; more of a history just collecting the facts about what's gone on, mixed in with a little bit of breathless tech-hype (as the title suggests; it's got good content beyond that, though, fortunately). Anyone know of any other informative/insightful books (or articles) in this area?

Re:do we yet understand what we're applying? (0)

Anonymous Coward | more than 5 years ago | (#28778585)

There's quite a few articles out there actually - but the issue is that they're journal articles, many are not free to access, and some of 'em are just plain hard to read. I found the following interesting reading however:

http://ssrn.com/abstract=1337914
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.104.2565&rep=rep1&type=pdf
http://www.milkeninstitute.org/publications/review/2007_7/50-66MR35.pdf
http://ideas.repec.org/p/eui/euiwps/eco2009-04.html
http://www.hbs.edu/research/pdf/09-132.pdf

It's about a book's worth of documents, does that count?

That Amanda Palmer (1)

paiute (550198) | more than 5 years ago | (#28777483)

aka the Eight-Foot Bride

Feels a little bit slashvertismenty... (1)

DavidKlemke (1048264) | more than 5 years ago | (#28777677)

Whilst I like the basic idea the whole article seems dedicated to peddling his wares. Sure he's giving away the basic concepts and some implementation details away but the primary focus of the article is to drive sales to his new income avenue. I would've understood if he built another business based on the concept (that would've shown it works for smaller outfits as well) but from what I can tell he's basically using the Techdirt name to peddle wares on his readership.

Maybe I'm just jealous because I can't monetize anything I've done on the Internet..... :)

Why just music? (1)

sn00pers (1005173) | more than 5 years ago | (#28777971)

I think everyone that thinks music should be given away for free and should only be allowed to make money from t-shirts and trinkets should consider this model for themselves. How about your boss doesn't have to pay you. And instead you can sell T-shirts and other goods at your work to make money. It's only fair right? Connect with your customer. Give them your services for free and try to make your money outside of your work.

Re:Why just music? (1)

tlhIngan (30335) | more than 5 years ago | (#28778331)

I think everyone that thinks music should be given away for free and should only be allowed to make money from t-shirts and trinkets should consider this model for themselves. How about your boss doesn't have to pay you. And instead you can sell T-shirts and other goods at your work to make money. It's only fair right? Connect with your customer. Give them your services for free and try to make your money outside of your work.

This model works for items that have a near-zero marginal distribution cost, i.e., "intellectual property". If you make widgets which cost money to make and money to distribute, this obviously doesn't work. But for things like books, software, pictures/paintings, audio, etc., it's a potential business model that works, and people give away stuff all the time.

And it has been shown that it does work. People seem to give away software, even whole operating systems for free, including source code. Yet companies like Red Hat seem to be doing well enough, even though their product has a free competitor. Companies like IBM, Apple, RedHat, Novell and others hire people that "give their stuff away". These people seem to have gotten others to buy their "trinkets" enough to make it their main stay of their business.

Heck, Apple hires FreeBSD developers, gives away WebKit to the point where it's used in competitor's products (Chrome for desktop, Nokia cellphones, Android-based cellphones), yet they also sell a closed-source OS and hardware, that competes against other OSes and hardware. Perhaps Apple has figured out the "Connect with Fans" part and "Reason to Buy".

Applying a Music Business Model To a Blog?!?!?!? (1)

eiapoce (1049910) | more than 5 years ago | (#28779643)

Applying a Music Business Model To a Blog

Sue your visitors and then complain about declining page views?

as a musician... (1)

caestles.thejus (1603463) | more than 5 years ago | (#28782277)

As a musician [caestles.com] , my commentary may be biased, but the idea that business models of the music industry can be applied to blogging seems to ignore the reason for these new models.

prior to the recording industry's genesis, no amount of production wizardry or robust business planning allowed a musician to make a living. it came down to the musician's skill (minstrels, epic poets, etc). the barriers towards content distribution erected by the industry (costs of replication and production, legal control over further replication and transmission, etc) introduced new business models. These models worked amazingly well and transformed the concept of musicianship into a lucrative field.

recently, the barriers have become more permeable due to advances in technology (home recording, lossless replication, etc) . As these barriers disappear, the strength of a musician's success may once again rest in their skill.

blogging, on the other hand, is an industry without barriers to content distribution already. it is more like what the music industry will be or was rather than what it is.

in my opinion, the transient music industry business models would not represent a viable model for bloggers.

anyone have a different view?

I would... (1)

Idiomatick (976696) | more than 5 years ago | (#28782397)

I was going to buy it but they didn't have a paypal option. :(

StumbleUpon or other 'web 2.0' sites (1)

Headcase88 (828620) | more than 5 years ago | (#28787329)

One technique I thought would be effective (at least for getting people who are willing to pay for something they can get for free), would be for sites like StumbleUpon to accept donations, and then (after keeping a tiny cut for admin purposes) split your donation evenly across sites you gave a thumbs up. Or something. Just some sort of model where a big site takes a lump sum from you and splits it up. Maybe that sounds too much like PayPal? But more web 2.0ish.
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