Why Two Sites Decided To Start Paying Their Writers

FTC Blog Payola

We hear all the time about sites debating whether to charge consumers for content but whether to pay people to create that content is something they’re also tinkering with. If you needed any proof, there were two examples this week. Seeking Alpha and Bleacher Report, two sites that have long offered contributors intangibles, like “exposure” and a “premium audience,” instead of cash, both said they will begin to pay some writers for the first time.

The two sites have much in common, in addition to their reticence until now to pay writers. Both target specific niches — sports for Bleacher Report and finance for Seeking Alpha. And both sites had insisted they were thriving under their existing models. Bleacher Report claims more than 16 million unique monthly visitors a month, making it the web’s fifth most popular sports destination, while Seeking Alpha’s traffic has nearly doubled over the last year and the site now gets 3.4 million unique visitors a month.

Neither site has much — if any — issue with low-quality content since, in the case of the Bleacher Report, authors need to apply before they can post, while Seeking Alpha vets all submissions before they go up.

So, why are they now paying?

It is likely their success to date that is driving them to now pay contributors. Seeking Alpha raised $7 million in a funding round a year ago, which it used to build out a sales team — a move that CEO David Jackson says means the company can share “meaningful” revenue with contributors for the first time. Bleacher Report’s announcement, meanwhile, came less than a month after the company raised $10.5 million in its own round.

Both sites hope that by paying authors they will be able to more quickly accomplish specific goals. Bleacher Report says it wants to drive deeper coverage of particular teams and specific coverage areas, while Seeking Alpha hopes it will attract more submissions from contributors who are not professional money managers and might otherwise start their own blogs. It should also fend off any possible competition from so-called content farms that also want niche content and are paying for it. Seeking Alpha, for instance, is offering writers $10 per 1,000 page views, significantly more than the $1.40 per 1,000 page views the Yahoo (NSDQ: YHOO) Contributor Network offers writers who complete specific assignments for Yahoo Finance. Bleacher Report has not said how much it will pay, although others sport sites — like SB Nation — already pay bloggers.

The risk for both sites is also limited. Seeking Alpha, is paying a fixed rate per thousand page views, so it should benefit if contributors’ posts take off. And, since its editorial team selects submissions for posting it should be able to control traffic bait — if need be (Jackson says the company’s editorial team is completely independent from its business operations). Bleacher Report, meanwhile, is only paying contributors who write about specific areas, which it will be able to control.

Jackson says that in “2011 people will start recognizing that the most valuable members of a community online should get value for what they’re contributing online” but the cases of Bleacher Report and Seeking Alpha seem so similar that it’s hard to view this as a broader trend. It’s unlikely, for instance, that less well-funded sites will rush to pay contributors for content. And as for the biggest player of all that arguably has this model — the Huffington Post — it’s likely in a league of its own since the audience it offers its contributors is now so large and its coverage is so much broader.

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