Should Seeking Alpha’s authors start getting paid?

January 18, 2011
new premium program:

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Kid Dynamite emails with a question about whether he should sign up for Seeking Alpha’s new premium program:

Here’s my problem – I put tons of effort and agita into my blog – both on my blogspot site and responding to moronic incorrect comments on the Seeking Alpha versions of my posts. I can’t stand when a troll posts incorrect stuff in the comments – I can’t help but correct it. But it’s about the least rewarding activity I know of.

Anyway, I make nothing from my blog. I get about 1500 hits a day on my site, although the SA version of my recent JP Morgan silver post got 22k hits total. My point is that if I’ve been doing this blog thing for a while, I feel like I’m “known” in the blog community, and yet I still can’t monetize it… So if I could make $200 a month on SA, I almost feel like that would be worth it – since I’m already doing it for free! On the other hand, that means I don’t publish it on “my” blog, etc etc.

KD here has put his finger on one of the more invidious aspects of the Seeking Alpha program: something is always attractive, relative to nothing, and for that reason a lot of SA’s contributors will sign up. But before doing so, they should stop and think, a while, about what exactly they’re doing and why.

For one thing, KD won’t be able to “park his financial identity on SA”, as Seeking Alpha’s Eli Hoffmann wants him to do. Or if he does, his identity is going to change dramatically. He’s managed 11 posts on his blog so far this year; of those, just two have made it on to Seeking Alpha. Some of the posts which didn’t make it are clearly not financial at all; others, like this one on what counts as insider trading, clearly are financial in nature. Either way, the KD that we know and love from his blog is a much less fleshed-out, and much less interesting, person on Seeking Alpha. Remember Josh Brown on eclecticism:

Your audience will connect with you more when you become a human being with interests outside financial matters. My blog, for example, has a nice following amongst hip hop fans, people with good senses of humor and pop culture junkies. Ritholtz gets a lot of engineering/science/technology/auto enthusiasts on The Big Picture. Paul Kedrosky’s readers are weather man groupies and amateur cartographers at Infectious Greed. Felix Salmon probably has an audience that skews toward those who are interested in finance and also the way the press covers finance. And also etiquette. Tyler Durden’s readership is made up of highly inquisitive and intelligent market participants, and a little overlap with the anarchy hobbyist demo. You get the idea.

This kind of thing gets lost when you’re shuffled in among the 4,000 other contributors at Seeking Alpha. And in any case it’s not easy to follow individuals on SA the way you can in the blogosphere, not least because SA insists on truncating its RSS feeds.

Hoffman says that Seeking Alpha wants to “make sure we’re raising the bar on quality and not lowering it” when it comes to editorial quality — which necessarily will mean a large number of contributions which end up not getting published. If your natural home on the internet is your own blog, then that’s no problem. But if your main identity is your Seeking Alpha identity, then that means you’re constantly at the mercy of a group of anonymous editors with rules and guidelines you may well disagree with. Your blog stops being your blog and starts being their blog; you, in turn, become a paid contractor, and you don’t get paid unless and until you meet their standards. This is not blogging, as it’s commonly understood. It’s freelance journalism, and the pay rate, looked at that way, is peanuts. (Freelance journalists are certainly badly paid, but they should still get more than $200 a month.)

In other words, when a Seeking Alpha contributor ponders whether or not to take the company up on its offer, they should do more than compare something with nothing: they should compare life as a freelance journalist to their current life, with their own blog, where they can say whatever they like. The first time that a contributor writes a time-sensitive article about a stock, and the article gets rejected, and then it’s too late to publish it elsewhere — well, that’s the point at which it starts to become a lot more obvious what the downside to the new deal really is.

As for the money, well, if blogging for free wasn’t worth it, then you wouldn’t be doing it. People get a lot of value out of blogging, and that value appears in a multitude of different ways. Investors, in particular, tend to value the discipline involved in thinking through their thoughts clearly, and then writing them down and having a permanent record of exactly what they thought when. It’s a great way to stop deluding yourself about why you did what you did — and it’s much less valuable if you’re subconsciously trying to write a post which lots of Seeking Alpha readers will click on and comment on. Most of my readers, I think, could quite easily make a couple of hundred dollars by writing a blog entitled “10 Reasons Why GLD is Going to $50 This Year” and giving it exclusively to Seeking Alpha. Pretty soon, it becomes a game: how many pageviews can I get? And the honesty inherent in blogging is lost.

Hoffmann, like Henry Blodget, purports to believe that a pay-per-pageview system is a meritocracy, where the best posts get the most money. I think that’s trivially false, and in fact I’m quite sure that if you ask any SA contributor whether their best post is the one at the top of their most-read league table, they’ll say it isn’t. By blogging for money, you automatically introduce a conflict of interest: unless your only aim in blogging is to be clicked on by lots of Seeking Alpha readers, you’re going to have duelling incentives whenever you write anything for the site.

There are lots of ways for Seeking Alpha readers to monetize their blogs which don’t involve selling ads against their posts. Some are looking for the kind of exposure which will get them a job offer. Others money managers looking for investors willing to entrust money to them. Others are working out ideas for a forthcoming book in real time, while also building up a good reputation. Bruce Krasting is a good example, and left a comment on my blog:

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.

Your mileage will certainly vary, of course. Some people, like Krasting, love getting lots of comments; others, like KD, are much more conflicted about them. Personally, I read all the comments here on, but I don’t read my comments on Seeking Alpha because I find the signal-to-noise ratio far too low. But in any case, if you give a piece exclusively to Seeking Alpha, then the chances of a “breakout” are significantly reduced. Seeking Alpha has a lot of readers who are investors, or executives; it has many fewer who are in the media industry and can offer things like book deals or radio interviews.

KD is certainly well respected in the blogosphere: that’s why he got to spend an hour on the phone with a senior Treasury official, discussing the finer points of Treasury’s exit from AIG. Would that conversation have happened had KD published his AIG analysis only on SA? It’s entirely possible. On the other hand, it might well not have happened, since Treasury was happy talking to him, the blogger who was known to them, rather than to whoever-it-was that wrote a certain post on SA.

Here’s KD’s bio on Seeking Alpha:

Kid Dynamite (pseudonym) spent 8 years as a trader at a major Wall Street investment bank. from June 1999 thru April 2005 he specialized in portfolio trading, and from May 2005 thru November 2007 he was the head trader for an internal hedge fund on the buy side of the same firm. Kid Dynamite managed a multi-billion dollar merger arbitrage portfolio, and continued to implement portfolio trading related strategies as well.

His blog has a fair amount of poker content, often revolving around how he lost a few hundred dollars gambling in Vegas. (Hence the name of the blog.) This is not someone for which a couple of hundred dollars a month will make any difference to his lifestyle at all. On the other hand, this is someone who loves his freedom — to write and travel and think what he wants. I can’t imagine that signing up for SA’s premium program would be a good idea for him. And in general I find it hard to think of someone for whom it would be a good idea. Maybe an impoverished finance student, or someone in India for whom $200 is real money.

Not everybody has turned SA down: Roger Nusbaum has decided to give them a couple of exclusive posts per week. “My primary job pays a fine wage,” he writes, “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.”

I’ll take this opportunity to ask Roger to publish, at some point when it becomes clear, just how much he’s making from SA. He’s their top contributor, and he’ll surely be their biggest earner too. If it turns out that Roger really is able to pay his bills off his SA income, then I’ll be impressed (or maybe he just has much smaller bills than I do). But for the time being, I think the base-case expectation is that SA will provide little more than pocket money, and that if you don’t need the money, there are good reasons not to take it.


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