WordCount Q&A: Helium.com CEO Mark Ranalli

Mark Ranalli makes no excuses for Helium.com. The website he helped start in 2006 isn’t the New York Times and never will be, and that’s OK with Ranalli, who describes the venture as a pro-am writing platform, where like cream, the best writing rises to the top and is compensated accordingly.

One of a new breed of online publishers that some call content aggregators and others content mills, Helium.com has over a short time amassed 150,000 contributors – though according to published reports, only about 10,000 of those are regulars – 1 million articles and $17 million in venture capital funding. The Andover, Massachusetts, company has also signed content sharing deals with three community newspaper chains that pay its writers for original work and reprint rights. But the bulk of Helium writers earn money from click-through advertising according to a computer-based algorithm that takes into account reader interest in the subject matter and how highly articles are rated by other Helium writers, among other things. The company claims its writers had collectively earned more than $1 million by last May.

I recently interviewed Ranalli, Helium’s president and CEO, for a story on content aggregators for an upcoming issue of a national writers’ magazine (I’ll share the link when the story’s out this fall). Here’s what he had to say about the site’s publishing model, how writers make money on it and where he sees the publishing industry headed. I’ve edited our interview for length and clarity.

I call Helium a content aggregator for lack of a better term. What do you call it?
The industry hasn’t accepted a term. We think of Helium as a writing platform. The difference between how we view what we’re doing and how some professional writers view us is a mindset shift. Professional writers are used to looking for work from a publisher then getting paid for their work. We’re allowing the writer to go direct to the consumer. We help them monetize their work and collectively build something of value to all of them.

How does Helium work?
We have two core offerings. One is a publishing platform where anyone can write, improve their skills, build their digital persona and build relationships among other writers. Our members bring the content and operate as the editorial staff. They produce and evaluate the content and the best writers and articles are compensated. It’s a platform more like eBay than it is anything writers have seen before.

And the second way you’re making money?
That’s our marketplace, where the relationship is more like the traditional freelance model. Now that we have this huge writing community, we’ve been approached by thousands of publishers and they ask our writers to produce content for them based on their needs. If one wants a 500-word article on fly fishing destinations in Montana, they give us the specs and we’ve set up a marketplace where our writers can identify what assignments are available, and if they’re selected to do it they’re paid. Some publishers pay $300 an article. Some pay as little as $40 or $50.

Who are your publishing partners – Hearst is one, right?
Hearst uses us a couple ways. Content that exists on Helium.com is also available to our publishers as stock content. Many newspapers have advertorials and sections that don’t require unique, custom-written content. For instance, a local newspaper on Connecticut might be looking for an article on day hikes. We have a gallery of 1 million articles on Helium.com and one of them might be on that topic. Compensation depends. It could be $10 or $15 for one-time use of that article. The writer gets a byline and they retain the copyright so they can resell it again. It’s like a reprint fee. Today we’re working with 6 Hearst newspapers in Connecticut. That’s initially. The expectation is to roll out to other papers.

What types of stories do your publishing partners buy?
We’re not hard news, we’re features. Breaking news journalism, front page stuff is a very different kind of content creation and serves a different model than the travel section. Lead times are different. As a newspaper, you don’t need to have a full time staff writer to write the travel section. We’re not causing this, we’re providing a solution for it.

What other publishers are you working with?
We have a relationship with Community Newspaper Holdings and GateHouse Media. We’re working with some of the world’s largest most respective publishers, but the vast majority of Helium’s partners remain anonymous. If you were a consumer magazine, you wouldn’t necessarily want to signal what’s going to show up in next month’s magazine by (announcing a partnership with Helium). We’re also working with hundreds of long-tail publishers.

What types of people are Helium contributors?
Our members range from professionals in their fields to retirees who spent 35 years in marketing and now write about marketing. They’re J-schools students who are looking to build portfolios. They’re Harvard educated mothers of three. I think of it as a pro-am. It includes some hobbyists but also some professionals. A reason for professionals to write here is we’re a credible brand for allowing writers to build a digital persona. Just because you start a blog doesn’t mean anybody reads it. Helium promotes your content, we help with monetization, we pay you based on the value of that content. It’s a system.

So writing for Helium is an alternative to having a blog?
I liken blogging to screaming in the woods. Sixty-five percent of them are never read. People are out there trying to make it with a blog and not even their mothers are reading their stuff. Blogging is a wonderful concept. It’s indicative of the power of the Internet to go direct to the consumer, share your thoughts and not be forced to go through a filter. But filters are valuable. The editor of the New York Times is a great filter. Helium acts as a filter that allows everyone to participate. The writers become a collective rating system that filters for quality. Publishing a lot of bad content doesn’t do anyone any good. There are other things we do. Being cognizant of SEO, we make sure Helium is linked around the web. And we’re selling ads and generating revenue.

How much do Helium writers make?
In 2007 our top writer made $500 and in 2008 it was $5,000. That’s not pay-the-mortgage money. People aren’t spending 40 hours a week on Helium. But $5,000 is better than a stick in the eye. This year our top writer will be on track for close to $10,000. We have writers on the site who’ve done 25 articles and made hundreds of dollars. I’m sure there are people who’ve written 100 articles made nothing. The devil’s in the details. Anyone who invests their energy in Helium will have a good outcome. I don’t believe you could work 40 hours a week on Helium and replace a full-time salary. But the effort of the community is making Helium a better platform and that’s creating opportunity. This is a rising tide that lifts all boats.

Exactly how do Helium writers get paid?
It’s an algorithm based on a daily calculation of what content has been created and how your content is rated. Well-rated content earns more than poorly-rated content. The second part of the algorithm is the value of your content to advertisers. The third part is general interest in the subject matter. For example, we know personal finance as a section gets a lot of readers. It’s a recession, people want information on how to save money and invest. So we look at, can you monetize the general area of content, do people read it, and are you a good writer. Those factors go into how much you’re earning every day. We’ve been more sophisticated than just who clicked on an ad, which could cause click fraud and introduced other funny dynamics.

What’s your affiliation with the Society of Professional Journalists and National Press Club?
Today not all writing happens through the Washington Post or Time magazine. But these professional organizations didn’t know how to evaluate (unaffiliated) writers. Helium’s system sorts out who the good writers are, and we’d love to have the good ones apply for membership. So if you’re a starred writer on Helium, you can apply to the SPJ. Same with the National Press Club.

Who’s your competition: Associated Content? HubPages?
I view HubPages as more of a micropublisher. They build a system that’s every man for himself. You build your page, create it for SEO and it’s all about click throughs. Squidoo has that same model: lots of people, almost a blog aggregator. I don’t view them as competition. We’re more of a publisher or information resource.

At what stage of their life cycles are content aggregators?
They’re all toddlers. If you think about it, the entire web publishing model is in its infancy. About.com is one of the oldest, they’re 12 years old, now part of the New York Times. These businesses are an opportunity for writers. If you look at the percent of revenue a traditional publisher pays writers it’s typically 5 percent. Helium will be sharing a far greater percentage of revenue generated on the platform. If you believe these businesses will achieve the kind of scale of a professional publisher, the opportunity is there for writers to make a lot of money. But you gotta get here.