SIPA: You're speaking at the SIPA Conference on content licensing. How did that revenue area come about for you?
Bruce Brumberg, founder and editor-in-chief, myStockOptions.com. When we went live in June 2000, internet "business models"—if you could call them that in those days—were all about getting as much traffic as possible with the goal of either selling advertising or the company. We tried to be advertising supported, but financial firms we approached to be sponsors, such as JP Morgan Private Bank (now part of JP Morgan) told us that, "We really like your content more." So we decided to go the route of content licensing, which plays more to my strengths, too. Then licensing prospects started asking, "Why should we license your content when we can link to it for free?" So that's when the gates went up. In 2003 we moved to what is now known as the "freemium" membership model for our public site and haven't looked back.
You have a history with SIPA?
Yes, I was a member back when it was NEPA many years ago. I was a lawyer with a law firm in Boston for a few years and had an entrepreneur streak, growing up in a small business family. I launched Brumberg Publications back in 1986, making this my 30th year in business and was a member of NEPA back then. In 2000 we started myStockPlan.com, Inc, with myStockOptions.com our most successful website.
What is your company's strength?
We make complex legal and tax concepts understandable to people who do not enjoy reading the securities laws or the Internal Revenue Code. We also have a narrow niche: content on equity compensation, such as stock options, restricted stock, employee stock purchase plans (ESPPs), and other types of employee stock plans. We have a big following for our tax, financial planning, and life events content.
I see a couple websites listed for you.
Our main revenue comes from myStockOptions.com. Our two main revenue streams are the paid memberships to our public site at the Premium and Pro level and the licensing of content to financial firms. As part of your paid membership, you get the Learning Center with self-study courses for CE credits, special tools, access to all our content, and other benefits. As for licensing, financial institutions like Fidelity or Schwab also need content for specialized sites and email newsletters they have for employee stock plan clients. They may want to build an educational center—part of that content will come from us. We also do custom publishing where we're hired by financial institutions to develop specialized content—perhaps on securities law or tax topics.
Can you tell me about the videos you've developed?
Yes, they are used by thousands of companies worldwide for training executives and employees. The most successful is called "Think Twice"; it's a legal-compliance series on insider trading. It's a popular joke in my family that we renovated our kitchen from my insider trading profits. They're docudramas and horror stories. You should watch.
What does a content licensing sale come down to?
First it's whether a company has decided to add substantive content to their website and/or email newsletter. It's the nice-to-have vs. the need-to-have dilemma. If they've committed to this or an enhanced site, then it becomes a buy-or-build decision for a company. Do they want to put together the staff to do it in-house, or hire people on the outside like us who make this topic our passion? This type of licensing turns content into a product, as we sell the same content in multiple ways.
All or parts of myStockOptions.com and myNQDC.com are available for licensing, customization, and integration on a private label or co-branded basis. For example, a major brokerage firm licenses a specific number of articles each year for its email newsletters and for distribution to employees and executives a major clients, while another financial firm licenses annotated IRS tax form illustrations for its own tax guides. myStockOptions also created a special Knowledge Center that can be easily customized and integrated into third party websites (see its Knowledge Center information page and video tour). The content in the Knowledge Center is feed from the myStockOptions content management system database, allowing all updates and new content to automatically appear in it.
Do people expect a lot with website memberships?
It's a challenge to create website content that people are willing to pay for these days. I find now that it's not only they need to have the information but are people willing to pay for it. Need to have is not enough. You need to have more. There is so much free content out there that is not as good but may be "good enough." We like to say we have content you can read (articles and FAQs), content you can engage with (quizzes, self-learning courses, and modeling tools—we have a patent on one), content you can watch (videos), and content you can listen to (podcasts). People now expect all this as part of any website offering, along with some type of community. The challenge we face is developing new features or products to add that people are we willing to pay more for vs. what people expect to get for free or part of an existing paid membership. We've been adding a lot of video and now have an app. We also have a Tax Center.
How big is your staff?
We have about 10 full and part-time people plus other service providers, an advisory board, and various content contributors.
What else are you working on?
We're developing a custom version of our Learning Center courses for financial institutions. They use it for internal certification of employees. Employees take the course, the score gets reported internally, and they get a special certificate for a high score. We've created our own learning management systems. We are also exploring events and webinars.
Is getting new business hard?
It's rarely easy. Basically, we need to find qualified leads, make a presentation, and they decide. If companies first come to you, you have a pretty good chance and it's more about reaching agreement on price and length of the contract. We try for multi-year agreements with recurring revenue.
Are the licensing agreements pretty standard?
We have a model agreement that we developed with an outside lawyer. It sometimes gets heavily edited when we are contracting with big financial firms that have their own contracting department, with its own forms, procedures, and compliance requirements.
What area do you spend most of your time in?
It varies—editorial, developing new products, marketing and sales, working with existing clients. As the tax season recently ended, we'll ask our site members and licensing clients, "Is there anything else we can do for you? You can still get this."
How do you ensure that your licensing clients are engaged and using the content?
We always try to highlight what we do and make sure they're using the content. That's key when they come up for renewal. We have email newsletters and alerts we send out that they can also use. We'll track usage and provide information on request. We don't know what their internal standard might be, such as page views. We want to make sure they're promoting the content and resources to their people.
I know you'll be giving some advice in your session at the Conference.
Yes, SIPA members should take a hard look at their content and who would want to license it. Could be for newsletters, specialized websites, custom publishing. I think companies are interested in having substantive content on their websites and in their email newsletters and white papers. Content marketing and thought leadership are popular buzz words these days.