Old Media, New Media, Demand Media: All in the Same Boat
Michael Arrington of Techcrunch.com had a piece Sunday in which he lamented the coming rise of what he calls fast food content, — “cheap, disposable content on a mass scale, force fed to us by the portals and search engines.”
The prime offender in this category is Demand Media, which has developed a system in which it uses an algorithm to figure out what people online are searching for, then produces pieces providing that information. These pieces are produced by people who get very little compensation. In this way, Demand Media basically runs a sweatshop for content, making a ton of money off ads that show up on content related to trending topics while giving back relatively little to the content producers.
My Brief Experience with Demand Media
I did a couple pieces for Demand Media a bit more than a year ago. I saw one of the company’s ads while browsing online. Out of curiosity, I signed up to be a writer on their site and looked through the available topics. I picked one — a Photoshop question — and wrote a tutorial about how to create a nebula and star field in Photoshop. The requirements asked that the tutorial be written so that a novice can reasonably follow it and achieve the end result. You can see from the linked page how much work was put into that piece, which included making screen captures in addition to writing the instructions (not to mention spending time later, at the request of a Demand Studio editor, to rewrite a couple steps). All in all, I probably spent about 90 minutes working on that piece — for $15. But I didn’t care too much at that time and actually did another piece. I had free time to squander on such things back then. It was a topic I knew off the top of my head and therefore easy to write (and being a former journalist, $15 for 90 minutes of work didn’t seem that unfair at the time. Now I know better). However, for the second piece that I wrote, I pitched an even easier topic because my experience from the first one taught me that this is how the game works.
A few months later, I got an e-mail from Demand Media informing me that most of the assignments listed on its Web site would now pay only $5. At that point, I simply scoffed and drew the line there. From my perspective, I would rather be writing Photoshop tutorials for free than for such measly and insulting compensation. It’s one thing if I spend two hours writing a tutorial for someone on a Photoshop forum for free — that’s something I do out of the kindness of my heart and out of the spirit of sharing. But when you pay the producer of a piece of content, then it becomes a business transaction, and quite frankly, $5 for work that — if it’s to be done properly — would need at least an hour is ridiculous, especially considering what the company makes from selling ads on the content. Furthermore, as someone who actually cared about the quality of the content he created, I knew that pushing compensation to such unreasonable levels would mean I would have to lower my standards to unreasonable levels to make this a remotely profitable venture, and that was not a compromise I was willing to make.
Arrington’s Lament
In his column, Arrington warns that content sweatshops like Demand Media “will surely, over time, destroy the mom and pop operations that hand craft their content today” and “create a race to the bottom situation, where anyone who spends time and effort on their content is pushed out of business.”
To a degree, I understand and maybe even share Arrington’s concerns. However, I can’t help but notice how eerily similar his complaints are to those of old media when they gripe about the influx of crap brought about by the rise of blogging and tweeting. Laments about the poor quality of much of this new type of content? Check. Worries about not being able to compete with this new model, which has significantly lower costs than your business? Check. Dire predictions about the future of quality content when this deplorable new model takes over? Check. Oh yeah, and the inventors of the new model declaring that they do care about quality and are in fact investing in it. Check.
In other words, what goes around, comes around. The last wave of innovation gave birth to online content-creation companies that run a leaner operation than the companies that had existed before. Only a fool would assume that someone else won’t come along and figure out a way to squeeze even more money out of content by further lowering expenses and out-compete its predecessors. As Arrington himself wrote, “The disruptors are getting disrupted.”
All Trapped in the Same Game
Here’s the thing: Fundamentally, old media, new media, and Demand Media aren’t all that different from each other. They are all predicated on the premise of squeezing the most value out of content, in part by spending the least amount possible on its creation while still ensuring that the content draws audience and hence advertisers, who actually subsidize the content creation. All of these models, in essence, are trapped in the same constraints in which content and the act of creating it are assigned relatively little monetary value by the people who consume it, and the creators must be compensated by sources other than the consumers of their products. So while the consumers of the content want quality, that is not necessarily the primary concern for the content creators because the consumers do not provide their primary revenue stream. Instead, concerns that deal with attracting and retaining advertisers take precedence. It’s a realm in which we happily accept the contradiction that we value quality content but embrace a system that, for all its positives, increasingly marginalizes quality’s role as a factor in profitability for content-creation businesses. We value good content, but we keep ourselves from being the masters whom the content creators serve through our unwillingness to subsidize the time and manpower it takes to create content. This forces the content creators to worry first and foremost about the parties that will subsidize them. As a result, our top priority is relegated to, at best, a tie with the priorities of the parties providing the subsidies and, at worst, non-existence.
In that light, content sweatshops like Demand Media are perhaps nothing more than the natural, inevitable next step in the path that we set ourselves on the moment we, as a society, opted to accept this contradiction. Maybe we are simply witnessing the death of content creation as a profession and the sweatshops are just another attempt to wring a few bazillion more pennies out of this business before the whole industry dies. If producers of high-quality content lose their living, the cause won’t be the content sweatshops, but rather the system that spurred the evolution leading to such a model. Our progression down this path was accelerated with the advent of technology that removed the financial barrier to entry for anyone who wanted to publish, which flooded the marketplace with freely created and freely available content, driving our perception of content’s worth down even more. The explosion in the amount of available content — and its high crap-to-good ratio — numbed us to crappy content as we happily accepted them as part of the tradeoff for having so much more content to consume. This abundance of content also caused us to emphasize, above all else, relevance as the most important attribute in our content-indexing, search, and organization tools (as in how relevant our search results are). Both of those factors helped push quality down even farther on the totem pole of priorities for content-creation businesses.
While new media have used some of the new technology to significantly cut their costs (and thus out-compete their old-media counterparts who are chained to legacy businesses based on expensive printing presses), they haven’t figured out a way to actually break out of this contradiction. In essence, they just found themselves a higher plateau. They are still not out of the way of the same flood that’s drowning old media, and it’s only a matter of time before the water rises higher to engulf the dry land they are standing on. Demand Media falls into the same category as well, just a bit more extreme and a bit leaner than its predecessors. Old media, new media, and Demand Media are all just points along the same curve, and it’s inevitable that another model will supplant them all by figuring out a way to cut costs even more at the expense of quality without significantly impacting its appeal to advertisers.
Let me stop and clarify here: I’m not saying free content is the root of all evil. There are many perfectly good reasons why we embraced a system in which the consumers pay little or nothing for content, and it has brought many positives, but it’s an undeniable side effect that it has forced content creators to cater to interests other than those of their consumers. Nor am I saying that online content is going to be crap if content sweatshops prosper. What I’m saying is that professionally produced content — the pieces created by people paid to produce them — will continue to decline in quality as long as we continue to accept the contradiction I stated above. Content value to consumers is already at virtually zero, and advertising revenue is getting more fragmented as the Web becomes more niche-oriented, so the content-creation businesses will be under ever increasing pressure to keep cutting costs to stay competitive. Outside the professional content-creation sphere, however, there is a whole world of people who, on an individual basis, are willing to invest the time and sometimes money needed to produce good content, without seeking compensation. And the quality of that content will not be affected by this and may even improve as more former professional content creators turn to other professions and take up content creation as a part-time hobby.
Looking Ahead
So what happens as we go forward? I see a couple possibilities: One, society looks at the situation and decides it can live with it, in which case creating quality content for a living virtually dies out, and almost all content — outside of those from sweatshops and maybe a very few rare exceptions in unique niches — is produced on the side, in our spare time, without expecting compensation. Two, society reaches a point where we collectively say we’ve gone too far, and we either retreat back up the path to an earlier point that tilts the equation back a bit more in quality’s favor, or we break out of the contradiction entirely and turn content into a direct transaction between consumer and producer, and consumers pay significantly more for content, just as they would for most other products or services. The likelihood of the last scenario happening is … umm … not good. I think the most likely end game is the first scenario, but that won’t come until after many rounds of innovations to come up with new models to stay above the rising flood for a little bit longer.
So what do I, as someone who creates content for a living, do? Innovate, branch out, and diversify my skills and my career as much as possible to stave off that end-game scenario for as long as possible, and hope my pottery-making skills improve enough for me to jump to that profession when the flood water gets ready to engulf my little strip of dry land. Unlike content, people will actually pony up good money for pots, sometimes for more than what it cost, in time and material, to produce the piece.









I think that there are more possibilities.
One is that the price of commodified information is going to crash, but non commodity information will grow in value. So this is stuff like the WSJ and Economist being able to charge for financial information while other papers can't have a paywall. Or Gladwell being asked to give major talks and being paid handsomely.
Another is that it will turn out that there is some minimum threshold of quality that we are willing to accept. If it's true that Google is getting polluted with increasingly low quality results, we should expect a corresponding drop in use around certain topics. Anecdotally, I am already seeing that in my group of friends. We've stopped using Google to do much research about buying because the results for WHATEVER + Review are so predictably bad. Google should respond to this drop by changing how they filter search results, or some other player should rise. I, for one, would love to see the ability to blacklist sites that are routinely non-useful for me from my search results.
A third is that the bad cheap information become so clogging that consumer retreat to high reputation providers. Reviews is one place where I don't use search anymore, I use trusted review sites.
A fourth is that content becomes a kind of loss-leader for other goods and services.
Thanks Tim, for reading and commenting. Those are all good possibilities. I think No. 1 would fall under the "very few rare exceptions in unique niches" I mentioned, since the likes of WSJ, the Economist, and Gladwell are all more the exception than the norm now among content creators, and probably will become even more so. And No. 2 and No. 3 are examples of what I mean when I talk about the possibility that "society reaches a point where we collectively say we’ve gone too far, and we either retreat back up the path to an earlier point that tilts the equation back a bit more in quality’s favor." They are potential developments that would elevate the importance of quality in the profitability of content creation. No. 4 is kind of interesting, and I'm trying to figure out if that's a new model or another version of the subsidy model, only with "other goods and services" replacing advertising's role as the subsidizer.
Have you seen Jay Rosen's list of sources of news subsidy? There are a lot of options listed there and I think it dovetails nicely with your question about whether third party subsidies of any kind are worthwhile.
The interesting question when you say "a few very rare exceptions in unique niches" is how rare? How unique? Because at the scale of the Internet, very rare is still very large.
I'm reminded of Kevin Kelly's 1000 True Fans argument. We define a true fan as someone willing to pay you one days wage a year for your work. if you have a thousand of them, you end up with 3x their average income as your income. That's a very livable income for a lot of content creators.
I come from a background of videogames, so we have been in a place where we've been competing with free and cross-subsidies since the beginning. And eeking out a living is very hard. But it is doable for some people, and more than one might think.
I agree: "very rare" at the Internet's scale can still be very large. But I do think it will likely be fewer than now because
1) Many of today's professional content niches will be dissolving,
2) there will probably be fewer new niches springing up to take their place that are as financially profitable (probably no coincidence that most of the big, recent innovations have been about creating platforms for content rather than creating the content), and
3) in the niches that do survive as financially viable, I don't know if most of them would be able to support more than a handful of players. I mean, how many WSJs or Economists will the marketplace need/support? And while we might have more people trying to go the Gladwell route and make most of their money off paid speaking gigs, that would only work if there's a corresponding rise in the number of paid speaking gigs to be had, and I don't know if there will be or not, since that demand seems finite.
And yes, I have seen Jay Rosen's list of subsidies. It's a good list.
Thanks again for the comments. Good discussion.
I'm reading a bit of a contradiction in Tim's comment and John's original piece. They imply that users will increasingly be satisfied with increasingly unsatisfying content. The question, in my mind, is whether readers are being served by the systems in place (eg Google search for reviews, or Demand Media real time production of articles). If users are not satisfied, then there is an inefficiency in the system, and thus an opportunity to do better.
Thanks for the comment, Steve. To clarify, I don't believe that users will be increasingly satisfied with increasingly unsatisfying content. Here's how I see it: Since the amount of content available is only going to keep increasing toward pretty much infinity, it means that the amount of good content will also be increasing, and that increase may be enough to keep satisfying users, even if it means the percentage of good content in the overall marketplace is decreasing. It certainly seems to be the pattern thus far. Back when only an elite few had the power to publish, we had significantly less content overall, but the percentage of that content that's good was higher. Now, even though we have a higher percentage of crap in the marketplace, the fact that we have so much more content than before means we have more good content than before, and so far it seems to be satisfying users for the most part.
Also, another thing to consider is where the percentage of crap content increases. Even if professionally produced content keeps getting worse, would that matter enough to users to elicit some sort of change in behavior if amateur content (which already significantly outnumbers professional content) continues to increase and maybe improve in quality with practice and more former professionals entering the amateur sphere? My piece was focusing on the quality of professional (produced-for-pay) content, not the overall marketplace of content.
This is an interesting idea, and it builds nicely on your point that you'd rather work for free for 2 hours for the love of helping a friend than work for $5. So if the professional rates drop that the dedicated creators just walk away and make content they love on their own time, then Demand Media and the like face a problem which is that for certain types of content amateurs will produce better results that the (much diminished) professionals.
It would be fun to see a Wiki-like response to Demand Media. One that runs similar algorithms that predict questions people will ask and then asks volunteers to produce better quality results.
This is the best analysis that I've read about this controversy in a long time. I for one cringe already when I hear the words "content provider". No, we are professional writers. Not everyone who taps on a keyboard can write.
Thank you for this article!
Tekla Szymanski
"Where Old Media and New Media Meet"
@tszymanski
facebook.com/OldMediaNewMedia