Opinion

Felix Salmon

Why is Seeking Alpha paying its contributors?

By Felix Salmon
January 16, 2011

Seeking Alpha has finally started paying its contributors — but I’m not convinced that this is a welcome development.

CEO David Jackson announced “three new initiatives” this morning: revenue sharing, a new leaderboard system, and access to statistics. The big news is the first one, which goes by the name of the Premium Partnership Program:

We can now share meaningful revenue with contributors: You’ll earn $10 for every thousand page views to articles which are published by Seeking Alpha and given to us exclusively (i.e. they don’t appear for free elsewhere on the Web).

Elsewhere, in the FAQ, we’re told that “top articles garner 10s of thousands of pageviews, so if you’re writing compelling articles, the potential to earn significant income is very real”.

I don’t think this can really be taken at face value. Seeking Alpha’s contributors are sophisticated financial investors and professionals: their idea of “significant income” is likely to be at least a couple of thousand dollars a month or so. But the chances of them getting anywhere near that are very slim indeed.

Thanks to the new stats, I can now see just how many pageviews I’m getting on Seeking Alpha: over the past year, I’ve ranged from a low of 30,589 in November to a high of 68,390 in May. On average, I’ve been getting just under 48,000 pageviews per month. Which means that if I gave every single one of my blog entries to Seeking Alpha exclusively, then I’d still be earning on average less than $500 a month. And I’m a full-time blogger, unlike most Seeking Alpha contributors.

If I contributed only some of articles for exclusive status, of course, my income would be much lower. Over the past year, exactly one of my posts — this one, on Warren Buffett — generated more than 10,000 pageviews. Put that single entry aside, and a very successful post for any given Seeking Alpha contributor looks as though it generates 4,000 pageviews or so — enough for a whopping $40 check.

And I’m near the very top of the Seeking Alpha contributor list. As part of the revamp they got rid of the “SA 100″, their list of Seeking Alpha contributors with the most followers. My 59,027 followers were enough to put me in tenth place on the list; top place went to Roger Nusbaum, with 84,758.

Jackson says that the revamped leaderboard is a function of the fact that “the number of followers a person has on Seeking Alpha doesn’t necessarily equate to reader engagement or influence”, and that “in contrast, the number of people who read your articles is a direct measure of reader engagement and thus your influence”. But the new leaderboard nowhere lists the top contributors by overall pageviews, instead listing only the most-read authors in narrow fields like “IPO Analysis” or “Dividend ETFs”. I doubt that many if any of those kind of posts result in over 10,000 pageviews.

Meanwhile, Jackson’s letter and the FAQ both leave out the most important part of the new system. To find that, you need to carefully read the terms and conditions:

By indicating an article is Premium when you submit it to the Seeking Alpha Premium Partner Program you agree to make Seeking Alpha Ltd your exclusive publisher for that article should it be accepted to the Premium Partners Program and you are granting a worldwide, irrevocable, perpetual, transferable, fully-paid up (subject to required payments hereunder), exclusive license to make any use of the articles and the derivative works of the article, to publish it and make it available it in any way it wishes, and to generate income from it.

In other words, Seeking Alpha here isn’t really paying per pageview at all. (If it were, it would pay contributors of all articles, not just exclusive articles.) What’s really happening is that Seeking Alpha is buying premium content, at zero up-front cost, which it can then resell in any way it likes and for as much money as it likes, with none of those revenues being shared with the author.

This is reminiscent of the evil goings-on at Forbes. I can easily imagine that Forbes magazine, or Forbes.com, or any number of other media outlets, might be interested in republishing the most popular content on Seeking Alpha. But up until now, Seeking Alpha hasn’t had the right to sell or license their content. With this new program, they can do just that, and keep all of the proceeds for themselves.

I don’t have access to Seeking Alpha’s internal metrics, but my guess is that on average they’re ultimately going to be paying roughly $10 per article for this premium content — that’s on a par with what content farms like Demand Media pay, but Seeking Alpha’s material, of course, is much higher quality.

I’m very suspicious, then, of what Seeking Alpha is doing here, and whether it’s really being transparent and honest. Jackson told Joseph Tartakoff that an average entry on Seeking Alpha gets between 3,000 and 4,000 page views, but I simply can’t believe that’s true:  Seeking Alpha published about 600 of my articles between February and December of 2010, which generated about 500,000 pageviews in total. That averages out to less than 1,000 pageviews per article, despite the fact that I have over 50,000 Seeking Alpha users following me. (It’ll be fascinating to see whether they publish this one, and if so how many pageviews it ends up getting.)

In any case, my advice to anybody thinking of taking part in this new Seeking Alpha program is to just say no. So long as you stay outside the program and retain the copyright to your material, you can sell it or repurpose it or do anything you like with it. The minute you contribute a piece under Seeking Alpha’s “premium” terms and conditions, however, you lose all rights to it whatsoever — note the word “exclusive” in the agreement. I’ve sold magazine pieces for thousands of dollars where I haven’t given up exclusive rights. You should never give up exclusive rights for a pathetic payment of $10 or so.

Update: Jackson responds in the comments, calling this “a bit of a crazy conspiracy theory”, saying that SA has “no content syndication business”, and adding that if such a business were to emerge, then “we’d share those income streams with the contributors”. He also implies that since my posts “typically aren’t actionable”, they’re likely to get fewer pageviews than most. I’ll believe that — and the idea that the program “will likely put some highly talented people in full-time business” — when I see anybody else’s figures, or when I see an overall pageview league table.

Jackson’s comment raises more questions than it answers, however. If SA isn’t in the content syndication business, then why is it insisting on being granted “a worldwide, irrevocable, perpetual, transferable, exclusive license” to the work before paying $10 per thousand pageviews? And why indeed is it insisting on exclusivity at all? By doing so, SA is forcing its contributors to make a hard decision: earn money from their posts, or have a full archive of their work available on their own site. If you want the latter, you can’t have the former.

Seeking Alpha is in the business of helping its contributors make financial decisions, which makes Jackson’s follow-up comment even odder: he says he didn’t publish this post on SA because it “isn’t in any way actionable”. Of course it is: it helps SA contributors decide whether or not to take Jackson up on his offer. It’s arguably the most actionable thing I’ve ever written for the SA audience. My guess is that Jackson just doesn’t want to give any publicity at all to the small print he inserted into the terms and conditions.

Update 2: Since posting this, I’ve heard from a few other Seeking Alpha publishers, all of whom have total pageview counts roughly in line with my own. One of them was Barry Graubart of Alacra Pulse Check, who posted his own analysis of the news here, and whose content is very much “actionable”. He got 186,654 pageviews from 58 posts over the past 90 days: if he gave all of his posts exclusively to SA, that would work out at a monthly income of $631. What’s more, just one of his posts — “10 High Dividend Stocks for 2011″ — accounted for 36,353 pageviews, or roughly 20% of the total. You can see why Josh Brown reckons that under SA’s new model, we should “expect a tidal wave of ’7 Stocks for an Election Year’-type schlock”.

More interestingly, Seeking Alpha has taken the meat of my criticism to heart, and have edited their terms and conditions. They now read as follows:

By indicating an article is Premium when you submit it to the Seeking Alpha Premium Partner Program you agree to make Seeking Alpha Ltd your exclusive publisher for that article should it be accepted to the Premium Partners Program and you are granting a worldwide, irrevocable, perpetual, transferable, fully-paid up (subject to required payments hereunder), exclusive license to make any use of the articles and the derivative works of the article, for free use on a website.

They’ve added the qualifier “for free use on a website”, and subtracted “to publish it and make it available it in any way it wishes, and to generate income from it”. Those are substantive changes, which address most of my ethical issues with the scheme. I still think it’s invidious to ask people to stop publishing their own material if they want to make money from Seeking Alpha; I would be much happier if they allowed that material to be published with some kind of time delay.

But I can see two reasons why they’ve gone down this route. The first is that most of their contributors — people like me and Barry, or successful fund managers — won’t take them up on their exclusivity offer, and therefore they won’t need to pay us. And the second is that this is an SEO play: they reckon that they’ll do better in Google searches if they have their content exclusively.

This is a dangerous path to take for Seeking Alpha. The “premium” contributors will learn fast to write listicles and other link-bait if they want to make decent money, the overall quality of the site will therefore decline, and the smart content will become harder to find. Is that a price worth paying, for added pageviews? I think not, but Jackson clearly thinks otherwise.

Update 3: Seeking Alpha’s Eli Hoffmann leaves a detailed comment below, saying much more than David Jackson has about the program and the thinking behind it. It’s well worth reading the whole thing, but here’s the bit where he tries to explain why SA is asking for exclusivity:

Why ask for exclusivity? None of us knows how all of this plays out, but we’ve put an offer out there for our contributors that we hope will resonate with many of them: Park your financial identity on SA. Help us make this the most awesome investing site on the free web, and we’ll make sure you share in our success.

I’m not sure that Seeking Alpha is the place that anybody would want to park their financial identity, given that it has layers of editing that people often dislike,  that the degree of information that people can give about themselves is limited, and that all SA pages will always promote SA first and contributors second. But we’ll see, I guess.

Comments
15 comments so far | RSS Comments RSS

Thanks for the advice Felix. BTW According to Google Analytics, which I’m told tends to under-estimate, the most popular article on my personal blog is this – http://www.ianfraser.org/re-examining-hb os/ so far it’s had about 7,000 page views.

Posted by IanFraser | Report as abusive
 

Seeking Alpha is paying in response to the fact that many of their better and more prolific contributors have realized that the SA platform is more like a guppy pool and not necessary for those who’ve learned to attract enough visitors to their own URLs.

It’s the same conundrum faced by a middle-of-the-road talent agent in Hollywood – if they do a great job, their actor client will be vaulted into the upper echelon and as a result, not require the small-time services of that agent anymore.

Posted by ReformedBroker | Report as abusive
 

Thanks for this little bit of news.It presents me, at least, with a conundrum. I attract little traffic to my site yet SA picks most of the business posts I write and they get lots of comments though I haven’t tracked the actual page views. Earning a few bucks wouldn’t offend me given that I’m a recreational blogger (at least it would help defer some of the costs of maintaining the site). I agree that giving them an exclusive license is a bit over the top but at the same time why not get paid a few pennies?

Fascinating how this whole thing evolves,isn’t it?

Posted by TomLindmark | Report as abusive
 

Hi Felix,

This is a bit of a crazy conspiracy theory. All Seeking Alpha’s revenues from articles come from ads on our site – which is the income being shared with contributors. We have no content syndication business. In fact, in the past, whenever someone has offered to pay for syndication for an article, we’ve passed the entire payment on to the contributor. If we decide to move into the content syndication business or subscription-based content business, I have no doubt we’d share those income streams with the contributors as well.

Your theory about getting a valuable long term license for zero up front cost also doesn’t make sense. Financial commentary is very real time, and therefore has a relatively short shelf life. Nobody wants to syndicate month-old articles.

Most important, we don’t believe in locking contributors into contracts, so the program is designed to allow contributors to choose on an article-by-article basis whether to give us exclusivity and earn income without making any forward commitments. Contributors can submit articles to us and stop at any time – for example if they think we’re making money from their articles in a way which isn’t being shared with them.

On the issue of how many page views and how much income to expect, remember that readers of Seeking Alpha come for actionable investment ideas about stocks, ETFs and portfolio strategy and asset allocation. So contributors shouldn’t extrapolate from the type of articles you write (which typically aren’t actionable and don’t surface on quote pages for stocks or ETFs) to their own. Contributors can check their own stats now, test the program, and see the results for themselves.

This program will likely put some highly talented people in full-time business. However, most of our contributors don’t aspire to work as full-time bloggers, but would probably welcome meaningful supplemental income. As Roger Nusbaum just wrote:

“One goal of the blogging is to have it create a viable, auxiliary income. You’ve probably gleaned that I am very conservative financially in terms of savings rate and how risk is taken. My primary job pays a fine wage but the idea of a second source of income, in my case the writing, being sufficient to pay the bills is very appealing as a fallback should something unforeseeable ever happen.”

Roger, as you know, is a professional money manager, and his blog is about money management. Here’s his full post: http://randomroger.blogspot.com/2011/01/ sunday-morning-coffee_16.html

Best Regards,
David

Posted by DavidJackson | Report as abusive
 

Monday 9am and it doesn’t look like you’ve made it to SA with this one yet, Salmon.

http://seekingalpha.com/author/felix-sal mon

Probably just due to it being MLK day…..

Posted by ottorock | Report as abusive
 

You’re right – we didn’t publish it, but for a different reason: the article isn’t in any way actionable for investors.

But in case you think we’re biased, I did personally re-tweet this

@ZeroHedge: Seeking Alpha just cut about 30% of its valuation over the weekend

:-)

Posted by DavidJackson | Report as abusive
 

I am a Seeking Alfa contributor. Have been for two years now and I am appreciative for that opportunity. The idea that they are now offering to pay for my efforts is a sweetener that will bring about some changes in the blog world.

I wrote a piece on 12/28 about my thoughts for 2011. It got 2,100 reads at SA, so it would have been worth about 20 bucks. Better than a sharp stick in they eye, but not a paycheck that changes much. Would it be worth it to me to consider the SA deal? Absolutely not. The other numbers:

Zero Hedge ran the piece. I got 20,200 reads and 237 comments. As a wanna be writer this is very nice to see. That this many made a comment means to me that I hit a nerve or two. Exactly what I hope with every piece I write.

Several other re bloggers/emags copied it/stole it or just used it without permission. Another 8k reads from that. This pisses me off, but there is not much that can be done about it. If it’s “out there” it will be copied.

The E-edition of the Wall Street Journal picked up the piece and lumped it with 12 other “must reads”. This has not happened to me before. The exposure is great, and to be honest, every once in a while an ego boost is not such a bad thing…

The WSJ linked to my blogspot address. So I broke some records at my own site. A total of 12,400 reads (prior high 5,700). I have AdSense on my page and this one story generated $31 in revenue.

As a result of the article (and the link from the WSJ) I have been invited on two radio talk shows. This is what I hope for every time a write. The chance for some kind out “breakout”.

SA pays me $20 or I get:

-40k readers that I would not have gotten.
-250 comments that I thrive on.
-$31 in my pocket.
-An opportunity of getting a link in the WSJ. (Admittedly small)
-A shot with the radio shows that I would not have had without the WSJ link.

Not a hard choice for me.
bk

Posted by Krasting | Report as abusive
 

Hi Felix,

I’m glad the change to our Terms & Conditions satisfies your ethical qualms. Thank you for pointing it out; it was a case of overzealous legal wording. Our intent has always been to allow contributors to earn cash in exchange for “free web” exclusivity; we have not asked for any other kind of exclusivity, including allowing contributors to host their content on “for-pay” subscription sites.

I also appreciate you trying to poke holes in the program. While I’m sure it has flaws, and we will work to address those flaws as we perceive them, I don’t believe those you cite in your updated version are relevant:

1) ** We’re asking for exclusivity because we know most of our contributors won’t take us up on it. ** WADR, this is absurd. We would LOVE for all of our contributors to take us up on this. No one forced us to roll this out, and I think it caught quite a few people by surprise. We actually have very ambitious internal goals of what percentage of our articles we’d like to be exclusive by year-end.

I understand that the amount of money involved based on current pageviews is far from a full-time income. I also recognize that for many “professional bloggers,” our proposition probably doesn’t make fiscal sense, at least at this stage (see below). But professional bloggers are not the majority of our contributors.

I also believe that this initiative (and many others we’re working on) will allow us to grow our audience over time, meaningfully. That means that people who develop a dedicated following on SA stand to earn more money over time – I hope much more. Could this emerge into a full-time-plus income for really smart and engaging authors? I truly hope so.

Anecdotally, when discussing this with a number of people ahead of the rollout, I found that some of the smartest people were also most enthusiastic about this.

One extremely intelligent and engaging author (who does not currently submit to SA told me (paraphrasing)):

“I think this is totally game-changing. I am paid by the article now, the same as all other contributors, and that frustrates me, because I know that my articles are consistently more profitable for the company. What writers care most about is writing something that people are interested to read. No one wants to write things that no one reads, even if it’s great. So a meritocracy that allows authors to earn money based on audience engagement is something that is likely to appeal to authors – especially the best ones.”

2) ** This is all about SEO. ** That is certainly one consideration, but it’s not particularly high on our strategic list. It’s about making SA the bar-none best site to read about, discuss, and research investment ideas and news. And it’s about creating an environment in which we feel we have a much stronger organic relationship with our contributors (those for whom this appeals); one in which they’re enthusiastic about being SA contributors, and one in which they feel SA is trying really hard to make our partnership profitable for both sides.

So why ask for exclusivity? None of us knows how all of this plays out, but we’ve put an offer out there for our contributors that we hope will resonate with many of them: Park your financial identity on SA. Help us make this the most awesome investing site on the free web, and we’ll make sure you share in our success.

3) This will result in contributors linkspamming us to drive traffic to their websites; a million posts that start with the number 10. I think this is where SA’s unique editorially-driven business model allows us to go where others can’t. We don’t post a single opinion article to our main site that has not been approved by our editors. Clearly this initiative presents us with a number of editorial challenges, including these two. But that’s why we hire smart editors; to set our agenda and make sure we’re raising the bar on quality and not lowering it.

As you can probably tell, I’m quite enthusiastic about this initiative. In business everything is ultimately a bet. You want to be sure you’re betting on projects that have a reasonable probability of success, and that have the potential to be game-changing for your business if they succeed. I think the Premium Partnership Program satisfies those conditions.

Posted by EliHoffmann | Report as abusive
 

Hi Felix, I am a SA contributor and was ranked around 70th in the top 100 before the list was removed (Scott’s Investments). For my most popular “actionable” articles, it could be a tough decision. Below are the 30 day stats for my most popular articles and as you can see, the most popular articles with an “action” tilt could be worth my time to make exclusive to SA (I would currently need at least 9-10k pageviews to make it worthwhile).

However, there is a significant question/issue which I don’t think anyone has addressed: How will authors know which articles have 10-20k+ pageview potential? When SA features them on the mainpage or in their “Must Read Articles” email, pageviews skyrocket. Author have no prior knowledge as to whether this will occur and could have a major impact on our decision to make an article exclusive. The uncertainty will in all likelihood lead me to not grant exclusivity to any article.

26,265 11 High Yield Stocks to Consider Now
9,565 Highest Yielding, Highest Momentum Dividend Champions
9,476 11 High Yield Stocks With Staying Power
8,013 Ranking the 2011 Dividend Aristocrats
5,289 10 Top Ranked Dividend Champions
4,292 11 High Yield Stocks to Consider Now
3,874 31 Low Volatility, Dividend Growth Stocks
3,452 Evaluating 2010′s Top Stocks Two Ways
2,869 11 High Yield Dividend Champions With Staying Power
2,607 10 Small Cap Stocks With Positive Earnings Surprises
1,242 Highest Yielding, Highest Momentum Dividend Champions
1,030 ETF Portfolio Update: December

Posted by Scottsinvest | Report as abusive
 

Felix, Prior to the change in the leader boards, I was somewhere near #50 (around 6,200 followers). I looked at my statistics and came away underwhelmed with the prospect of selling my best work for the implied amounts. My most popular article (http://bit.ly/98zBVg) and a very actionable one at that, generated 8,142 page views and would have earned $81.42 if the premium program existed at the time.

Over the past year, all of my articles generated a total of 336,000 page views. Had they all been under the premium program, that’s $3,360 for selling exclusive rights to hundreds of actionable original ideas.

As you mentioned in your article, a “meaningful amount” of money for professional investors contributing to Seeking Alpha is a heck of a lot more than a few thousand dollars for that kind of volume of work.

The non-exclusive model provides exposure for the authors, content for Seeking Alpha, and permits the author to retain all rights to the work. There is no way I would trade that for a few thousand dollars a year, it’s not even a close call.

I am afraid that the type of author who *would* be excited about this type of revenue is exactly *not* the kind of author who is going to write meaningful investment articles. To the extent that the new program crowds out better work, the overall site quality could surely decline.

I don’t mean this to be overly negative but I think there are serious flaws in the way the program was designed. Having said that, I did submit a “test” article into the program yesterday just to see how the process works. They have done some nice work on their submission process and author feedback on publications, so all is not negative.

Ravi Nagarajan

Posted by RaviNagarajan | Report as abusive
 

Well, it has become clear what has happened.

Google has been targeting spamming content farms that recycle/copy content from other sources.

http://googleblog.blogspot.com/2011/01/g oogle-search-and-search-engine-spam.html

What seems particularly disingenuous of Seeking Alpha is trying to square these 2 facts:

1) Seeking Alpha has an editing team that essentially approves content. That is, it deems the writer worthy — somewhat of a trusted source.

2) Despite considering the author worthy, it inserts a ‘No Follow’ html tag within all posts. This means that nothing that an author writes will be credited in Googles search algorithm other than to Seeking Alpha. No links or words will count.

So basically, Seeking Alpha uses the editing team to deem someone worthy — but not worthy enough to allow outgoing links.

Most financial bloggers are clueless when it comes to Search Engine Optimization and fail to understand the ‘No Follow’ — Seeking Alpha will claim this is to stop ‘comment spam’ — that is, people posting links within comment sections for spamdexing purposes. But actually, nofollow applies to the authors article as well.

By the way, Demand Media (DMD) just went public and uses a model that pays writers $10 per story. This way, the site gets original content that it can then try to monetize with advertising. Magically, during the Demand Media IPO roadshow, Seeking Alpha made this move to $10…

You can see what is going on here — Seeking Alpha didn’t do this so that authors could make money, they HAD to do it to adjust to the realities of the world — that ‘content farms’ are getting a free ride to advertising dollars for content that actually belongs to the writers.

Posted by GlobalObserver | Report as abusive
 

Felix,

Your argument is flawed in two ways.

1. A new website couldn’t get ranked in Google when they share their content with any of the reputable websites such as Seeking Alpha. For example check out the following article:

http://www.insidermonkey.com/blog/2010/1 2/03/7-stocks-insiders-are-buying-like-c razy/

We published this article on out website on December 3rd and we republished it on SA on December 4th. When you search the title of the article SA article ranks #1, our article isn’t even among the top 10 results. So sharing our article with anyone actually costs us in terms of Google visitors.

2. The same SA article had 69,500 visitors since its publication. If they were paying at the time, we would have received $700 for a single article. When Seeking Alpha told you that an average article gets about 4000 pageviews, they weren’t lying. Forty dollars per article isn’t a bad deal and it is much better than sharing your content non-exclusively with them.

Insider Monkey

Posted by InsiderMonkey | Report as abusive
 

Hello Insider Monkey,

I don’t think your comment is entirely accurate. You say that “sharing your article with anyone actually costs you in terms of Google visitors.”

I think this defies all business logic and common sense.

It may be so that when you published your article on SA, your own article didn’t appear in the search engines. This one is obvious why. You’re competing with yourself.

In this case, obviously the article on SA would come up first since it’s a much more reputable site then yours. However, if you published the article only on your site, I’m certain you would have seen better rankings. Why? (There’s no other competition.)

You may think that $700 for that one article is a good deal. However, what you fail to realize is what more you could have gotten if you utilized other distribution channels.

Posted by kawola17 | Report as abusive
 

Hello Insider Monkey,

I don’t think your comment is entirely accurate. You say that “sharing your article with anyone actually costs you in terms of Google visitors.”

I think this defies all business logic and common sense.

It may be so that when you published your article on SA, your own article didn’t appear in the search engines. This one is obvious why. You’re competing with yourself.

In this case, obviously the article on SA would come up first since it’s a much more reputable site then yours. However, if you published the article only on your site, I’m certain you would have seen better rankings. Why? (There’s no other competition.)

You may think that $700 for that one article is a good deal. However, what you fail to realize is what more you could have gotten if you utilized other distribution channels.

Posted by kawola17 | Report as abusive
 

SA’s agreement may not be worthwhile for someone with their own blog and thousands of followers, but for someone who is just starting out and trying to write articles for fun, the monetary incentive is great. It allows me to share my ideas and get modest compensation while doing so. Sure, the compensation is roughly equal to or less than minimum wage, but since I’m doing it for fun, that’s not a huge issue. I certainly think that I get a lot more views on SA than I would by starting my own investment blog and trying to drum up followers that way.

Posted by kirisame | Report as abusive
 

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