Upcoming changes to the subscriptions business, payment plan for Seeking Alpha contributors in 2018 from an email sent this morning.
I want to share with you our growth plans for 2018, and changes we’ll be making in order to enable that growth.
Before I go into details, here are the three things I hope you will take away from this letter:
1) 2018 is going to be a huge growth year for Seeking Alpha subscription products
2) You will be rewarded for that success
3) We believe in freemium; growth in subscriptions will not destroy the exposure and engagement that free Seeking Alpha generates
In looking ahead to 2018, we see a huge growth opportunity in our subscription businesses (PRO and Marketplace), an area that we have under-monetized. Increasingly, consumers are willing to pay for quality content. This is especially true of equity research, where the difference between a poor decision and a smart decision can directly impact an investor’s bottom line.
To date, we have mostly monetized our content by selling advertising. In 2011, in order to ensure our success was aligned with yours, we made the decision to share revenues with contributors. Since then, we have paid out more than $15 million in content payments for “free Seeking Alpha,” something we are proud of.
But growth in subscription revenue is a game-changer in rewarding the value your research delivers to our readers.
You can already see this in the Investor Marketplace. More than 150 authors now offer paid research services through the Marketplace, where 11,000 subscribers pay $5.2 million/year to access their services, +$2.7M YTD. In other words, we now pay 150 Marketplace contributors more than we pay all the rest of our contributors.
We will continue to grow the Marketplace. At its current growth rate, Marketplace revenue will leapfrog $10M in ARR in 2018, and there’s much more we can still do to increase its growth trajectory.
We believe we can achieve a similar dynamic in PRO: off-the-charts growth that we share with the contributors who get us there.
Today, PRO is a small but powerful collection of some of our best single-stock (“primary ticker”) research. But based on our data, we’re giving too much away for free and retaining too little value for paying subscribers. Therefore, we intend to begin placing more primary-ticker articles behind the PRO paywall soon, making PRO an essential due-diligence tool for stock-pickers, and for idea-gen seekers.
To be clear: the real-time experience of Seeking Alpha will not change. Articles will still be available after publication to all readers for a certain number of days. This is when most of the reading and engagement happens. But we want to test how placing primary-ticker articles into a research library, as well as blocking primary-ticker articles from key due-diligence and idea-gen pages such as quote pages, affects PRO signups and retention.
In order to enable this, and to ensure we’re aligned with contributors, we are in the process of making two significant changes: 1) a change to our terms & conditions that gives us more flexibility to charge readers for content, and 2) a change to how we pay for article pageviews.
I have already explained Number 1): We are by far the leading U.S. platform for single-stock research, particularly in habitually under-covered micro-, small- and mid-caps. For PRO to be a must-have for professional investors, we need to be more aggressive about what users do and don’t get for free. Hence the change, and the tests we plan to run. In doing so, we will work carefully to strike the right balance that leaves contributors’ exposure and engagement intact (the ‘freemium’ model).
Number 2) is about ensuring that contributors share in our successes, particularly as we grow our subscription businesses. Today, article payment terms are a blunt tool. They fail to reward quality, which we believe best reflects what subscribers pay for. And they do not connect pageviews to article payments in a way that mirrors how advertisers pay us to reach our audience.
The key change to contributor payments, which we plan to launch in January, is the one most requested by contributors: we will introduce a quality score. Instead of treating all pageviews as equal, the new system will increase payments to articles/contributors with high quality scores and decrease payments to articles/contributors with poor quality scores. We expect quality scores will encompass both how valuable articles are to our subscription business and to our brand, as well as how effectively their “free” views can be monetized. The quality score will be a work-in-progress that we expect to evolve with time.
I’m very excited about this change. It’s clear that contributors care deeply about the quality of their research, and find the current system unsatisfying. Our aspiration, in partnership with you, is to continually raise the bar of high-quality investing content. Readers understand the value of quality, and have shown a willingness to pay for research that simply isn’t available elsewhere. In order to continue raising the bar, and reward authors who share their best work, it is critical that readers who benefit from your research pay directly for that benefit. And that we ensure that as PRO revenue grows, authors benefit from that growth in a way that correlates with the value they deliver.
To summarize, we’re changing our T&C and payments system to enable us to grow our subscriptions business, and changing our payment plan to ensure you share in that success. And we will do so in a way that leaves your exposure and engagement intact.
Later today, you’ll get an official email about the T&C changes. Please review them. We expect to deploy the change to the payment structure in time for January; and you will get more details before then.
Please share your questions and feedback with me via email. I will of course read any comments in the forum, but want to have a single avenue for feedback to ensure nothing gets missed.
Have a great week,