“The funny thing about all these frothy millions and billions piling up? Most of the value was created by people working free.”
-David Carr, writing about HuffPo, Twitter, and Facebook
I have been meaning to address this issue for some time; It started with Seeking Alpha, then moved to RGE and Business Insider, before ending with my rejections to offers from Huffington Post and The Daily Beast. All are firms whose business model is to sell advertising on farmed content acquired for free (or nearly free). Carr’s article this morning — At Media Companies, a Nation of Serfs — finally forced me to publish my thoughts.
Over the past few years, numerous content sites have requested permission to rerun my original work. I have experimented with Seeking Alpha, Business Insider and RGE. In my experience (which could differ from yours) the benefits were de minimus.
Based on those experiences, I have said “Thanks, but no thanks” to requests from the Daily Beast and Huffington Post; I recently stopped publishing at Business Insider. And my experiences with Seeking Alpha were less than stellar, I stopped republishing content there several years ago.
Why? Because these are for-profit businesses, and as such, they seek to make a return on investment. They have convinced numerous professional Venture Capitalists to give them substantial piles of cash, with the promise they will seek an exit strategy — buyout or public offering — to generate a return for their equity investors and themselves — but not for their outside contributors.
You would not volunteer to work for free as a greeter at Wal-Mart, a barista at Starbucks or a fry cook at McDonalds — so why should you work for free at these content sites?
The short answer is The Dangle: A promise of rewards in the future for work performed now.
Ahhh, the dangle. In my career on Wall Street, I have discovered the dangle to be an effective way to get something for nothing from some sucker. It is a way for someone with the appearance of power and money to obtain goods and services for free, for a mere promise of future benefits. Early in my career, I fell for the dangle. No more.
In the present discussion, consider these various dangles made by content factories to me over the years:
1) You will get traffic back from the content site;
2) You’re building an audience;
3) You are enhancing your own personal brand;
4) You will raise your Google Page Rank
5) You are developing a reputation
In my experience, all of these are untrue.
Note that most of these promises are rather difficult to measure (except traffic) and all of these are even more difficult to attribute back to the content aggregator. In reality, these promise are illusory, the benefits IMHO never accrue to the blogger.
Do the math: I used to contribute to TheStreet.com (on a paid basis, they are NOT a content farm). But as that site got more popular, my columns got lost in a sea of words. Being part of a community was lost as TSCM scaled; I found a more immediate and useful community around the Big Picture. What is worse, the various aggregator sites have become so busy that to be seen or heard, one must scream — outrageous claims and ridiculous headlines — not outstanding content — are what garner page views there. No thanks.
About now, someone is typing an email saying “Hey Ritholtz, you have other people’s content in the Think Tank — aren’t you being a hypocrite?”
Actually, no. The Think Tank contributors are market professionals. They are friends and colleagues who already have a brand and reputation. And, these folks are financially independent. For the most part, they publish to Wall Street, not the public, and the Think Tank was originally conceived as a way to inject their ideas into the broader public debate. More importantly, the Think Tank is curated, meaning two or three pieces get published most days; not untold 100s.
If you currently “donate” your content to an aggregator, I suggest you should ask yourself the following questions:
1) Am I giving away content to a firm that received VC funding? What is their potential upside? What is mine?
2) Has the Dangle been met? Have the promises of benefits made to me occurred? Am I seeing substantial Traffic increase?
3) When I search for my own content on Google, is my site ranked below my own content republished by aggregators?
4) Is any enhancement to my brand or professional reputation coming from the aggregator’s site?
5) What benefits, if any, are accruing from republished content?
As I said, I did the math, and you should as well.
Don’t be a Serf.
At Media Companies, a Nation of Serfs
NYT February 13, 2011