Seeking Alpha Bets Big on Premium Content

In a surprising Sunday afternoon announcement, Seeking Alpha founder and CEO, David Jackson, revealed several new initiatives that will dramatically revolutionize the content creation landscape at the highly-regarded investment research site.

The most critical was the announcement that, for the first time in the site’s history, it will pay its contributors for the exclusive content they create for Seeking Alpha. For years, contributors have submitted and published articles on Seeking Alpha to increase their online exposure, develop their personal and professional brand, and drive traffic and leads to their businesses. However, not all contributors have business to drive leads to, and Seeking Alpha is now confident it can share “meaningful revenue” with its writers as an additional incentive.

Contributors will receive $10.00USD for every thousand pageviews, and payments will be distributed quarterly. Any of the site’s 4,000 contributors may choose not to keep their content exclusive to Seeking Alpha, and the site will  continue publish their non-exclusive articles in the same manner it always has. (Full program details here.)

Seeking Alpha

This announcement prompted an obvious question: why would Seeking Alpha pay for content that it used to obtain and publish for free? The site has long been praised in many circles for its high-quality content and well-respected army of contributors. This reputation has been converted into more than 630,000 registered users and 40,000 comments a month. But is this audience enough to sustain the business in this new model?

With a stated average of 2,500 to 20,000 pageviews for each article on Seeking Alpha, the site will be shelling out an average of $25 to $200 per article. Even with the premium rates the site has been able to charge advertisers and the prolonged payment cycles that reduce overhead, that is a significant capital outlay for an uncertain return.

The argument for Seeking Alpha‘s bet is that by investing heavily in its valued contributors, the site is building mutually beneficial relationships that drive reciprocal traffic and continue to develop the reputation of the site and its contributors.

New content creation and distribution systems are often met with skepticism and criticism – especially when it involves paying for content that used to be obtained for free. Incentivized crowdsourced content almost always carries the risk of decreasing quality as quantity increases. VentureBeat also noted that pageview-driven financial incentives may encourage link bait and sensationalism, decreasing the value of the premium content that has built a highly sought-after audience at Seeking Alpha.

To combat this undesirable transition, Seeking Alpha announced a coinciding rollout of an expanded community ranking and contributor reputation system that qualifies writers based on a number of reader engagement metrics.

The long-tail content model often relies on fixed-fee payments and the cumulative value of evergreen content to produce sustainable returns. Pieces of content with longer usable lives have greater lifetime values, so after the fixed cost is covered, the returns are astronomical on quality content created in this model. However, the predictive and reactive nature of Seeking Alpha content largely prohibits the site from utilizing this fixed payment model.

Long Tail

Some of the fundamentals-based articles on Seeking Alpha covering general investment techniques and strategies may have longer life cycles and greater lifetime values, but the high daily turnover of the majority of investment and trading related content virtually eliminates the value of this strategy. Revenue sharing allows Seeking Alpha to compensate its contributors for the content they create while minimizing the risk of paying for content that has become obsolete before the fixed cost has been covered.

After more than a year of exponential user and pageview growth, Seeking Alpha is betting “all-in” that the quality of its content won’t decrease as submissions shoot through the roof, ensuring advertisers will still pay premium rates to advertise on the site.

Will Seeking Alpha’s new strategy succeed? Share your thoughts in a comment below.

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About Michael Dossett

Inactive since Sept. 2011

Posted on January 16, 2011, in Uncategorized and tagged , , , , . Bookmark the permalink. Leave a comment.

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