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I am developing an iOS app that provides educational content, created by professionals (teachers, professors, etc). New content will be added continuously. The number of content editors is limited (just a few people at the beginning).

My question is: how do I pay the content creators? I want them to be motivated to add new content often, but I am not in the situation to pay them a salary.

Paying them a percentage of sales is an option, but then how much? Of course, without content my app is worthless, but without the app the content can't be sold.

Any suggestion is appreciated.

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3 Answers

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I don't mean to imply you should take advantage of them, but don't underestimate the value of peoples personal desire for meaningless competition.

Maybe at first you should just reward people with "badges" and "digital trinkets", which see, to be common these days. Appeal to the teachers' natural desire to teach and share knowledge. Create a badge hierarchy system where they can earn status among their peers.

Over time create monetary rewards for top contributors or editors. If you pay something like a dollar for every submission you might just end up with the Mechanical Turk problem, where massive amounts of garbage are submitted in hopes of pay.

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Thanks for the answer, Brian. Sorry that I didn't make this clear in the question, but I have a limited number of "hand-picked" content creators. I was thinking around 3-4 editors, at least at the beginning. I don't think that a virtual badge system will be motivating. But this is a great suggestion for the future. Thanks! – drstupid Mar 14 '11 at 13:20
In your case then I would setup a scenario where you take the first $XXXX dollars of profit (to cover your initial costs), and then create a pool of money that is diverted from sales (30%? 50%?) which is divided among the content creators based on some ranking system (most submissions, most popular topics, etc.). – Brian Karas Mar 14 '11 at 13:41
Thanks! 30-50% sounds reasonable. I'm curious of other answers before accepting one. – drstupid Mar 14 '11 at 13:56
up vote 1 down vote

Its unclear to me how much quality assurance, support and service you are providing for buyers of the content and what value you are creating (besides distribution) for creators of the content. Given i don't understand if you would like to build a distribution channel, create a marketplace, or actually 'own' the IP related to the new content, rather than reinventing the wheel, would try to find the company that has the closest model to yours and make sure you are in the same ballpark.

  1. Marketplaces. If you evolve the business model to become a true marketplace, you might want to benchmark to ebay's take rate, which is about 7.8%, or think about the fee structures at ebay, getty, or etsy.

  2. Licensing. Maybe awkward for your industry, but you might structure deals differently to own or partially own the content's IP. For example, the gaming and pharma industry both structure deals with a combination of upfront payments, royalties and milestone payments to balance capital outlays with perceived risk/reward.

  3. Competition. And, of course, pay attention to companies that may do something similar: Callaway, Ruckus, or maybe Flatworld.

hope this helps.

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up vote 1 down vote

You can pay for piece of content i.e. standardize (approximately, of course) various types of content and set fixed prices for it.

This is popular model for paying for content (e.g. that's how Huffington Post/Engadget/TechCrunch are/were paying their editors for posts).

If you do that, the issue boils down to: does the price you can offer can attract content creators of satisfactory quality?

Your situation is unique but in general rule there are far more people out there capable of writing content for your app than there are apps they can write content for, so demand/supply is on your side and the examples I mentioned above tend to pay very little.

You mentioned that you want to limit pool of content creators to small pool of 4-5 but that might be a self-imposed limitation. In the model of paying per piece of content, your best strategy is to setup a reverse auction i.e. let people bid on the tasks you provide. The key for that is ability to clearly define what you expect to get as a final product.

This article http://www.kalzumeus.com/2010/07/17/seo-for-software-companies/ talks about how to outsource content creation (writing, in this example).

Paying a percentage of sales is a terrible idea. First, like you noticed, it's hard to determine the percentage.

Second, total percentage is fixed at 100%. The content presumably must be updated ad infinitum but once you give out all 100%, you have nothing left to offer.

Third, it provides anti-motivation (the income gets more tied to the overall success of the app than the effort of a single content creator which enables e.g. one bad apple to not do any work and profit indefinitely from your effort and efforts of other content creators).

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Thanks, Krzysztof. I was thinking of allocating a fixed percentage for content creators, i.e. 50% of monthly sales, let's say $100. This amount could be distributed to the creators according to their effort. If one of the content creators is responsible for 90% of content, he/she gets $90. So I would never give out all 100% of sales. But your other points are really interesting. Thanks – drstupid Mar 15 '11 at 7:46
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To provide some concrete data: according to readwriteweb.com/archives/… AOL's Weblogs Inc. paid $5 per article. – Krzysztof Kowalczyk Mar 16 '11 at 7:20

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