Plentiful Content, So Cheap

Last Wednesday, I met with an executive from Demand Media, a company that generates content based on popular Web searches and other data. Since then, I’ve spent about 20 hours reading past articles, calling people for background, doing interviews, writing my column, and working on the copy with editors Sunday afternoon.

Shawn Colo is one of the co-founders of Demand Media, which is generating lots of articles and video for little pay.

At Demand’s current pay rate, I’d be making almost a buck an hour.

Never heard of Demand? You’ve probably seen its products. The company has five times more video on YouTube than any other single source and over one million original articles floating around the Web with an endless array of how-to and what-the-heck instructionals on everything from how to make your own bobblehead doll to bobbing for apples.

According to the company, its YouTube videos are streamed 2.5 million times daily. And in those five days it took me to write this column, the company published 20,000 new articles or videos about losing weight, learning new tricks on a skateboard or tips for job hunting.

Demand, which has $355 million in backing, was co-founded in 2006 by Richard Rosenblatt, who was the head of Intermix, the birthplace of MySpace, and by Shawn Colo, who has a background in private equity investments. The company lives up to its name, with the hive mind of the Web serving as an assignment editor.

Demand uses a three-part formula of search terms, potential ad results and what competitors are doing to feed an algorithm that, with a human assist, comes up with headlines that are full of clickable, salient language that serves as bait for readers and search ads. (News is expensive to produce and not really a part of the formula because the company is looking for durable content, so “How to avoid a tiger attack” will have more value than, say, “Tiger’s not out of the woods, yet.”)

The topic is then fed into a central database where freelance writers sign up for the assignment. The articles they write are run through an automated plagiarism checker, an actual copy editor and posted on one of the company’s sites like eHow or LiveStrong.

Driven by search and video advertising, it’s a good business, with more than $200 million in revenue in 2009 and a current value for the company that has been estimated from $1 billion to $2 billion in various reports.

Based in Santa Monica, Demand Studios, the production arm of the company, has been described as a “content farm,” a place where many of the processes are automated and the writer and videographers serve as field hands, with pay to match. The average article pays $15 to $20 — videos pay about $30 — but the company has had no trouble signing up 7,000 steady contributors to bid for the work. (Copy editors make about $3.50 for editing a story.)

Steven Kydd, the executive vice president in charge of Demand Studios, stopped in New York last week and we sat down over a coffee. By Mr. Kydd’s lights, Demand is a lifesaver, not a trap door, for content producers. Writers can choose a topic they know a great deal about and produce a series of five or six articles in a single day, which helps the small fees add up.

“We give them the flexibility to work when and where they want on stories that interest them, paying them early and often for a steady, reliable stream of work,” he said. And he said that because all the writers are vetted and all the work is copy-edited, consumers get reliability as well.

“We combine art and science to come up with responsible and relevant information,” said Mr. Kydd. “We use billions of bits of data to listen to what people want to know.”

It can work beautifully. Last week, I realized I needed to clear my cache on my Web browser to get instant-messaging to work properly, and found, without realizing it at first, that I had used a video on eHow.

But another query I randomly typed in at eHow — how to roof a house — yielded an article that started, “These are the basic instructions on how to roof a home wether (sic) you are a home owner trying to learn how to roof your home a (sic) wanting to get into the roofing buisness. (sic)”

Mr. Kydd says clunkers are the exception and that in an increasingly crowded niche — Associated Content has a similar approach, while AOL is cutting its own path with a new initiative called Seed — Demand Media will be a long-term, dominant player. (The New York Times Company owns About.com, which uses a system of guides to lead online discussions of how-to and advice.)

Human intelligence, not algorithms, is what makes Demand work, Mr. Kydd said. then kiss my ads