Tuesday, August 12, 2014

Getting Paid

For some time now I’ve been speculating about the long-term viability of a business model based entirely on user-generated content. We’ve seen small-scale experiments with the concept, such as the Frito Lay Super Bowl ads that were made entirely by fans of the products and offered to the company for free, or the “Comments” sections now prevalent on almost all news and entertainment websites. It’s certainly an appealing idea: if the company can convince its customers to create advertising copy or just offer content that other users will want, free of charge, there will be no need to spend company funds on these activities. But there are a number of corresponding issues with this business model, not least of which is that you are asking members of the general public – and your actual customers – to work for no compensation except (possible) gratification…

I’ve said all along that it was only a matter of time before these unpaid content providers either stopped providing content or started demanding payment for it. Not the commenters so much – leaving smart-ass remarks or even outright trolling is still considered to be its own reward – and not the people for whom posting their writing is the entire point of the exercise, like the people writing fan fiction. But sooner or later the people who go out of their way to review things, writing lengthy analyses or even testing specific products or services for the express purpose of reviewing them, are going to figure out that they are effectively providing the content that would otherwise have to be done by employees for free. I learned this week of a test case on this exact topic being brought against everyone’s favorite review cite, Yelp...

This isn’t the first time that Yelp has come to the negative attention of the reading public, of course; there have been repeated complaints about the company extorting money from its customers in return for positive reviews, and just recently three executives of the company have been accused of $20 million in insider training by their own stockholders. As you can see in the linked story from Courthouse News Service, however, Yelp is now being sued by a group of former contributors who are claiming that since they do the exact same work that Yelp’s paid personnel do, they should be entitled to the same wages – retroactive to when they began posting reviews…

Now, I’m not going to pretend that I ever liked the Yelp model, or the company itself; my opinion of them started to plummet when I learned about the extortion cases and has been dropping every since. And I’m not claiming to know anything about employment law (or any other kind, really), so I can’t comment on whether the case has any merit or if the protesting contributors are wasting their money and some attorney’s time. But one does have to wonder if either the company or the reviewers who are suing them have really considered all of the implications of this situation…

On the company side, it seems obvious that since they are making all of their money by displaying content effectively given to them for free, sooner or later someone was going to ask to be paid for doing all of the work. It should also be obvious that Yelp can’t just ignore cases like this one. Unlike a regular e-commerce site like Amazon, Yelp can’t support itself by moving merchandise; their income is dependent on a steady supply of new reviews to drive their products and services. Without that stream of information the company has nothing to sell; thus, they can’t risk losing that entire population of reviewers. But if they start paying the reviewers, then anyone who goes onto their site and scribbles down a few notes can demand payment for his or her work – and probably will – regardless of whether the company ever makes a cent on those reviews.  

As for the users, if they do start getting paid by Yelp, they will completely lose their anonymity (the company has to have their information in order to pay them – and that information can be subpoenaed), and will thus be subject to legal action for any outright lies or even inaccuracies in their reviews. There will probably be other complications involved, as well, such as conflicts of interest, rules their primary employer might have about working additional (paying) jobs, loss of disabled or protected status, or even paying taxes on the income…

Personally, I think the lawsuit is a colossally bad idea for all parties involved, and I don’t believe that Yelp is going to be able to get this genie back in the bottle; even if this particular lawsuit is defeated I think they can probably expect a number of others just like it. They’re going to have to find some way to deal with the issue, before things get any further out of hand…

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