Have you ever wondered what happens to that expert network call you took part in a few months back? Well, it might have been recorded, repackaged, and resold multiple times – all without your knowledge. And your share of the profits? Quite possibly, a big fat zero.
Expert networks have historically relied on a model of facilitating 1:1 interactions between clients and consultants. This model has seen the industry grow into a $2 billion annual enterprise with significant profit margins.
Enter content libraries, disrupting this model by offering clients swifter, more cost-effective access to a myriad of viewpoints. Meanwhile, the networks get to sell the same piece of content multiple times over, boosting their profits further.
The advent of the content library model has sparked somewhat of an arms race among expert networks. This has resulted in significant fundraising rounds and acquisitions. Stream by AlphaSense and Tegus – two firms that have built their business around content libraries – have witnessed substantial expansion, while many large, traditional firms are now scrambling to develop their own equivalent offerings.
For the experts who create the content in these libraries, it should be boom times as well, right?
Wrong. Many are unaware that their deep insights and opinions are being resold multiple times. They are sometimes enticed to create valuable content for free, and as for landing more high-paying calls by giving away the best bits? Well, as the saying goes, why buy the cow when you get the milk for free?
Heads I win, tails you lose
The expert network industry represents a three-way relationship between clients, networks, and experts. Clients gain quick access to in-depth, raw insights they couldn’t acquire elsewhere. Experts, on the other hand, receive lucrative hourly rates for participating in stimulating conversations about subjects they are well-versed in, without any requisite preparation or follow-up.
Meanwhile, networks receive a substantial share of the profits for bridging the gap between the two parties, managing payments, and providing compliance tools. In its S-1 filing for a now-on-hold IPO, GLG reported an astonishing 73% gross margin, implying that the experts’ hourly rates are marked up by nearly 4X on average!
Enter content libraries once again, now enabling networks to drive margins even higher, in some cases to a staggering 100%. The irony? The experts, who form the backbone of these libraries, often receive nothing for their time and expertise.
Let’s consider my experience with Stream to illustrate how experts can be sidelined in this arrangement.
Stream invited me to participate in a recorded call on a subject in which I’m considered an expert. The conversation, they said, was meant to help me showcase my expertise to a group of Stream’s clients interested in the specific topic.
I endeavored to offer candid, detailed, and comprehensive insights during the hour-long call. It’s quite likely that the investors and analysts who listened found it valuable.
I’ve participated in similar live analyst calls with several other networks, such as Guidepoint. These calls involve multiple clients who listen in and ask questions. For such calls, I’ve been compensated between $800 and $1,000, as compared to my usual rate of $500 for a one-hour call.
Guess how much Stream paid me? Zero. No subsequent work emerged, nor was I provided with any updates. Could it be that Stream’s clients felt they’d sufficiently understood my insights?
As a result, I’ve turned down subsequent invitations from Stream to record additional unpaid analyst interviews.
Private conversations may not be private.
Content libraries also jeopardize your anonymity, potentially reducing the quality of information shared in expert network calls, and deterring some consultants from participating altogether.
Networks claim to scrub personally identifiable information, such as names and titles, from recordings and transcripts. Yet, given the wealth of information disclosed in a call, most experts can be identified with just a few Google or LinkedIn searches. How many recent former Chief Marketing Officers at a particular company are there on LinkedIn?
I’ve often observed that the insights gleaned from discussing management can prove to be the most valuable part of a client call. An insider’s perspective on a CEO and their team can divulge far more than a typical investor presentation or an earnings call could. During my career, I’ve had the fortune to be part of stellar teams, but I’ve also encountered a fair share of less than competent individuals, whether at former employers or amongst vendors and competitors.
The unvarnished assessment and practical examples of a management team’s competence (or the lack thereof) can often justify the cost of a call a thousand times over! However, I would be hesitant to share my candid feedback of management if my recorded and transcribed opinions could be freely accessed and distributed by anyone using platforms like Tegus or Stream.
Where do we go from here?
Content libraries enable clients to access more information more quickly and offer expert networks a lucrative new product. They shift the business model from selling one-to-one interactions to one-to-many. While this should be a win-win situation, it appears that experts are getting a raw deal, suffering from inadequate economics and transparency.
Remember, we, the experts, are the product. And we’re starting to take notice.
Experts need fair compensation, be it in the form of a larger upfront payment or performance-based compensation. If their content generates more revenue for the network, they should receive a larger share.
Transparency is another area requiring urgent improvement. Firms that avail calls through libraries must disclose to experts who has access to their content and what measures are in place to protect their privacy. In an ideal world, experts would have access to reports showing how often their recordings have been accessed. This could motivate them to create more content.
Content libraries have gained traction because they offer value to clients. Anything that grows the industry should increase opportunities for experts as well. GLG recently announced that its library of expert interview transcripts is now accessible to Bloomberg subscribers. Although experts don’t receive any additional compensation from this arrangement, the partnership has resulted in clients requesting to meet specific experts they found through the library.
Content libraries might be a jackpot for expert networks, but if experts continue to be left out, this success may be short-lived.