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August 08 2012

19:31

Demand Media beats in Q2 with revenue up strongly

AllThingsD :: Santa Monica, Calif.-base Demand Media beat earnings expectations today, with a strong revenue performance up 17 percent in the second quarter and a small profit. The social content company also said it had added Michael Blend as its new president and COO.

A report by Kara Swisher, allthingsd.com

April 28 2012

18:23

The $1.2b inside story of how Demand Media almost went private

AllThingsD :: According to sources close to the situation, Demand Media was deep into discussions with a private equity firm to complete a deal that would have taken the online content company private for double its current value. But Demand abandoned the effort this past week — which was born from an aggressive attempt by Boston-based Thomas H. Lee Partners.

Continue to read Kara Swisher, allthingsd.com

Tags: Demand Media

January 19 2012

15:00

The newsonomics of signature content

What’s your signature content?

Quick: If somebody buttonholed you in an elevator, a school play, or a bar, and said, “Why should I pay you for that?” — what do you tell them?

Each passing week, it seems we’re further into the age of signature content. That only makes sense: If the death of distance is now old news, if everything is available everywhere at the touch of button or the swipe of a finger, then what makes any news or entertainment brand stand out amid this plague of plenty?

Closed systems — from three or four TV networks to less than a dozen big movie studios to a half-dozen major magazine publishers to geographically dominant newspapers — made signature content less important. Sure, big shows and big names have always driven media to some extent, but now, media without big names or big shows are going to get lost in the ether. Take Hulu’s announcement last week about Hulu Originals. You do have to wonder if Hulu’s fictional 13-episode “Battleground,” about a dysfunctional political campaign, will be bested by the Republican reality show in progress when the show debuts next month. Hulu is also bringing a Morgan Spurlock series for a second run, and probably will feature one other new program. The Hulu announcement joins Netflix’s own foray into signature content. Three years ago, would the thought of Netflix signing up Little Steven to do an original comedy series have crossed anyone’s imagination?

Hulu and Netflix both need to distinguish themselves in the market — not only from each other, but from Comcast, DirecTV, and Time Warner, among others. They need to buy protection as supposed masses consider cutting the cord on packaged services, Roku-ing and Apple-enabling Internet video onto their living-room screens. In movies and TV, we’re quickly morphing from a world of news and entertainment anywhere — get all of these things, somewhat haphazardly (Comcast Xfinity, for instance) on all of our devices — to one in which consumers ask, “What special do you have for me, in addition to my all access? Yes, All-Access, the cool feature of 2011, will quickly graduate from a wow to an expectation.

Why as consumers should we pay $7.99 (down from an initial $9.99) to Hulu Plus, when the same stuff (kinda sorta) is available through Boxee, or Apple TV, or Netflix, if I can find it? Why am I paying $7.99 a month (apparently the magic price of the moment) to Netflix for a catalog of films that is both voluminous and too often lacking what I want? Consumers are going to be asking that question a lot more.

Publishers, distributors, aggregators, and networks all want more money, and they’ve seen — courtesy of tablets and All-Access — that consumers are now more ready to pay for digital content than ever before.

Forget “content wants to be free.” Now content wants a fee. And everyone from Time Inc to The New York Times to the Memphis Commercial Appeal to Hulu’s co-owners (Fox, Disney, and Comcast) see gold. They see another digital revenue stream, in addition to advertising or to cable subscription fees. Yet they are increasingly believing they’ve got to up the ante (and Hulu is raising new funds to buy original programming) to compete and to win those consumer dollars.

News companies — at least one in ten U.S. daily newspapers and many consumer magazines — are rapidly embracing digital circulation revenue and All-Access. Yet results have been quite uneven. That makes sense: Consumers will pay for digital news, feature, and entertainment content, but they don’t want to overpay, and they’ll increasingly be forced to make choices. Buy this; let that go.

Let’s be clear. Paid media is paid media, and the original-programming pushes of the video companies have great meaning for news and magazine companies, global to local. For them, the calculus is similar. News and magazine brands can launch new products, though that’s out-of-their-DNA-tough for many. So they’ve focused primarily on sub-brands, many of which are people. These are the faces of news and magazines; many of these have become hot commodities over the last several years (“The newsonomics of journalistic star power“) as companies try to distinguish themselves — and give readers and viewers a reason to pick them out of the crowd.

How, though, can media companies afford to pay a premium for branded, promotable talent, talent that may open consumers’ pocketbooks? That’s easy: spend less on other content. So we’ve got the rise of user-generated content, obtainable free or cheap, and all kinds of new syndicate action from Demand Media to startup Ebyline (and maybe NewsRight), all trying to make it cheap and easy to get more medium- and higher-quality content more cheaply. What’s old is new again — as a young features editor, I got regular visits from syndicate and wire salesman, ranging from high-quality to the Copley News Service, that sold its stuff by the pound.

Another prominent model no news or magazine company can afford to ignore: The Huffington Post. Back to the early days when Betsy Morgan first teamed up with Arianna, HuffPost has worked this evolving content pyramid. At the top, a few highly paid site faces, many opinionated faces (some paid, most not), and then low-cost aggregation, much of it AP, headlined with the site’s recognizable swagger.

Then, of course, there’s the old standby: staff cutting. We’ve seen lots of staff cutting. In fact, these days, while we see some announcements like Media General’s big Tampa cut, most of the bloodletting is less public, but no less real. If you need to pay more to stars, and ad revenues are still declining, staff cuts of less than premium content (and those that produce it) make economic sense (“The newsonomics of the new news cost pyramid“). It’s the new news math.

These newsonomics of signature content are getting clearer. Netflix is planning to spend 5 percent of its expenses — or $100 million a year — on original, Netflix-defining content. Hulu is spending about a quarter what Netflix’s total, or $500 million in total, on all content licensing this year. We don’t know how much of that is for original content, but observers believe “Battleground” will cost $15-20 million for its 13 episodes. With its other forays, it will probably spend closer to 10 percent of its content budget on original content.

Curiously, many newspaper newsrooms constitute only 10-20 percent of the overall expenses of a daily newspaper company. So we’re starting to see some new, and old, arithmetic play out here.

Simply, Andy Forssell, Hulu’s SVP of content, explained the cost/benefit ratio to Variety: “…having an original scripted series that hasn’t been seen anywhere else yet is considered the best tool for standing out with either advertisers or viewers.”

As usual, we see the bifurcation of the bigger national brands — those with more audience to gain and more money to spend — and local news brands. While many local newspapers have cut to the bone, with too much of the tissue in the form of experienced, name-brand metro and sports columnists cajoled or drummed into “early retirement,” we see increased branding of stars at places like Time, The New York Times, Fox News, and ESPN. The sports network may be the classic business model of our age, and in its anchors and top analysts — many initially lured from daily newspapers — it has shown the way for many years now.

At the Times, consider business editor Larry Ingrassia’s build-up of business columnists, from veterans Gretchen Morgenson and Floyd Norris to new(er)bies Andrew Ross Sorkin, Brian Stelter, David Carr, Ron Lieber, and David Pogue. And the Times more recently picked up James Stewart from archrival Dow Jones.

At Fox News, Roger Ailes has cannily built the most successful cable news operation not on the interchangeable blondes that provide so much fodder for Jon Stewart and Stephen Colbert, but on O’Reilly and Hannity.

At NBC, the news franchise is so built around Brian Williams that his well received newsmagazine “Rock Center with Brian Williams” is synonymous with its host.

At Time Warner’s CNN and Time, we see the building of a worldly franchise on Fareed Zakaria’s clear-eyed, no-nonsense view of our times.

And then there’s the more local and regional press. Newspapers have long believed that it wasn’t any one or a half-dozen names that sold the paper. They’ve believed the news itself was the star, and the daily information report was the brand. That may be still be true of the Times, the Journal, the Financial Times, the Guardian, and a handful of other national/global news organizations — all of which have substantial, multi-hundred newsrooms that produce branded, unique products. It’s less true of regional and local dailies, many of which still present too much commoditized news in national, business, entertainment, and sports coverage, and have bid goodbye to many faces familiar to readers. Those that have retained familiar faces must do what they can to keep them; all need to recruiting more.

Then they may have a good answer to the question, in one form or another, consumers and advertisers will increasingly ask: What’s your signature content?

April 22 2011

14:00

This Week in Review: The Flipboard dilemma, Trove and News.me arrive, and a paywall number for the NYT

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Is Flipboard a competitor or collaborator?: Flipboard has quickly become one of the hottest news apps for the iPad, and it continued its streak last week when it announced it had raised $50 million in funding. Flipboard’s Mike McCue told All Things Digital’s Kara Swisher he’d be using the money to hire more staff and expand onto other devices, including the iPhone and Android platform. But he also talked to TechCrunch about using the money to fend off a rumored competitor in development at Google. (The Houston Chronicle’s Dwight Silverman told Google not to bother, because Zite already does the trick for him.)

All this prompted a fantastic analysis of Flipboard from French media consultant Frederic Filloux, who explained why Flipboard’s distinctive user-directed blend of news media sites, RSS feeds, and social media is so wonderful for users but so threatening to publishers. Filloux argued that every media company should be afraid of Flipboard because they’ve built a superior news-consumption product for users, and they’re doing it on the backs of publishers. But none of those publishers can complain about Flipboard, because any of them could have (and should have) invented it themselves.

GigaOM’s Mathew Ingram advised media companies to be willing to work with Flipboard for a similar “if you can’t beat ‘em, join ‘em” reason: Its app has their apps beat in terms of customizability and usability, so they’re better off trying to make money off of it than their own internal options. ReadWriteWeb’s Dan Rowinski wrote about the possibility that Flipboard could be a better alternative partner for publishers than Apple, and Marshall Kirkpatrick wondered why publishers are up in arms about Flipboard in the first place.

Traditional media’s personalized news move: One of the reasons that media companies might be less than willing to work with Flipboard is that some of them are building their own personalized news aggregation apps, two of which launched this week: The Washington Post Co.’s Trove and Betaworks’ News.me, developed with the New York Times. INFOdocket’s Gary Price has the best breakdown of what Trove does: It uses your Facebook account and in-app reading habits to give you personalized “channels” of news, determined by an algorithm and editors’ picks — a bit of the “Pandora for news” idea, as the Post’s Don Graham called it. (It’s free, so it’s got that going for it, which is nice.)

All Things Digital’s Peter Kafka suspected that Trove will be most useful on mobile media, as its web interface won’t be much different from many people’s current personalized home pages, and David Zax of Fast Company emphasized the social aspect of the service.

News.me is different from Trove in a number of ways: It costs 99 cents a week, and it’s based not on your reading history, but on what’s showing up in other people’s Twitter streams. (Not just what they’re tweeting, but what they’re reading — Betaworks’ John Borthwick called it reading “over other people’s shoulders.”) It also pays publishers based on the number of people who read their content through the app. That’s part of the reason it’s gotten the blessing of some media organizations that aren’t typically aggregator friendly, like the Associated Press. [Note: We're one of the publishers licensed in the app. —Ed.]

Since News.me is based so heavily on Twitter, it raises the obvious question of whether you’d be better off just getting your news for free from Twitter itself. That’s what Business Insider’s Ellis Hamburger wondered, and Gizmodo’s Adrian Covert isn’t a fan, though Martin Bryant of The Next Web said it could be helpful in stripping out the chatter of Twitter and adding an algorithmic aspect. GigaOM’s Mathew Ingram looked at both services and concluded that they signal a willingness by some traditional media outlets to adjust their longtime broadcasting role to the modern model of the “Daily Me.”

A good sign for the Times’ pay plan: The overall news from the New York Times Co.’s quarterly earnings report this week wasn’t good — net income is down 57 percent from a year ago — but there was one silver lining for online paid-content advocates: More than 100,000 people have begun paying for the Times’ website since it began charging for access last month. (That number doesn’t include those who got free subscriptions via Lincoln, but it does include those who are paying though cheaper introductory trials.)

As Advertising Age’s Nat Ives pointed out, there’s a lot that number doesn’t tell us about traffic and revenue (particularly, as paidContent’s Staci Kramer noted, how many people are paying full price for their subscriptions), but several folks, including Glynnis MacNicol of Business Insider, were surprised at how well the Times’ pay plan is doing. (Its goal for the first year was 300,000 subscribers.) Here at the Lab, Josh Benton looked back at the numbers for the Times’ TimesSelect paywall and concluded that an initial influx of subscribers doesn’t guarantee continued growth after launch.

Those numbers are particularly critical for the Times given the difficulty its company has had over the past several years — as Katie Feola of Adweek wrote, many analysts believe the pay plan is crucial for the Times’ financial viability. “But this means the paper’s future rests on an untested model that many experts believe can’t work in the oversaturated news market,” she wrote. “And the Times has to pray the ad market won’t decline faster than analysts predict.”

A few other paid-content tidbits: Nine of Slovakia’s largest news organizations put up a paywall together this week, and the pope is apparently pro-paywall, too. At the Guardian, Cory Doctorow mused about how companies can (and can’t) get people to pay for the content online in an age of piracy.

Google’s hammer falls on eHow: When Google applied its algorithm adjustment last month to crack down on content farms, Demand Media’s eHow actually came out better off (though others didn’t fare so well, like the New York Times Co.’s About.com, as we found out this week). Google made a second round of updates last week, and eHow got nailed this time, losing 66 percent of its Google juice, according to Sistrix.

Search Engine Land’s Matt McGee speculated that Google might have actually been surprised when eHow benefited the first time, and may have made this tweak in part as an effort to “correct” that. Demand Media, meanwhile, called Sistrix’s eHow numbers “significantly overstated,” though the company’s stock hit a new low on Monday. Mathew Ingram said investors have reason to worry, as Demand’s success seems to be at the mercy of Google’s every algorithm tweak.

A Pulitzer first: The Pulitzer Prizes were announced this week, and while the awards were spread pretty broadly among several news organizations, there were a couple of themes to note. As Felix Salmon and others pointed out, an abnormally large share of the awards went to business journalism, a trend the Columbia Journalism Review’s Dean Starkman opined on in a bit more detail.

The biggest prize from a future-of-news perspective may have gone to ProPublica, whose series on some of the machinations that worsened the financial crisis was the first Pulitzer winner to never appear in print. The Lab’s Justin Ellis noted that other winners are including significant multimedia components, perhaps signaling a shift in the emphasis of one of journalism’s most elite institutions. If you were wondering where WikiLeaks was in all this, well, the New York Times apparently didn’t submit its WikiLeaks-based coverage.

Reading roundup: No huge stories this week, but a few little things that are worth noting:

— Your weekly AOL/Huffington Post update: Jonathan Tasini came out swinging again regarding his lawsuit on behalf of unpaid HuffPo bloggers, Business Insider’s Glynnis MacNicol responded in kind, Eric Snider told the story of getting axed from AOL’s now-defunct Cinematical blog, and HuffPo unveiled features allowing readers to follow topics and writers.

— Missouri j-school students are chafing against requirements that they buy an iPad (they previously had to buy an iPod touch, and they called that plan a bust). Meanwhile, Ben LaMothe of 10,000 Words had three ideas of social media skills that j-schools should teach.

— A weird little fake-URL spoof turned into an interesting discussion about the possibility of libel through fake URLs, in thoughtful posts by both the Lab’s Andrew Phelps and TechCrunch’s Paul Carr.

— Two interesting data points on news innovation: A group led by Daniel Bachhuber put together some fascinating figures about and perspectives from Knight News Challenge grant recipients. And journalism researchers Seth Lewis and Tanja Aitamurto wrote at the Lab about news organizations using open API as a sort of external R&D department.

April 21 2011

14:00

The newsonomics of a single investigative story

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

It’s a week to celebrate great investigative work. ProPublica made some history with its Pulitzer for online-only work about the financial meltdown, and the Los Angeles Times crowned its success with the larger-than-life Bell corruption tale, winning its own top prize. Both well deserved.

Meanwhile, as journalists sat around their terminals awaiting the Pulitzer bulletin, an investigative series broke across California, perhaps reaching more audience more quickly than any previous investigative piece. There were no bodies to count, nor billions or millions of ill-gotten gains to uncover.

Rather, California Watch’s “On Shaky Ground” series is aimed at preventing disaster, getting ahead of the Grim Reaper. The series took a big look at the likely safety issues in the state’s schools when (not if, right?) The Big One hits. It found, not surprisingly, that although state law mandated seismic preparations, all kinds of bureaucratic nonsense has contravened that intent. It found that about 1,100 schools had been red-flagged as in need of repair, with no work done, while tens of thousands of others were in questionable and possibly illegal shape. The so-what: Some of the very institutions providing for the kids of California have a certain likelihood of actually falling on top of them and killing them.

It’s old-fashioned, shoe-leather, box-opening, follow-the-string journalism, and it is well done.

While it’s fun to celebrate great journalism, anytime, it’s vital to look at the newsonomics of this kind of investigative journalism. What did it take to get it done? How much did it cost and who paid for it? And, to look at the plainly fundamental question: How do we get lots more of it done in the future?

The series took more than 20 months to complete. The interactive timeline, “On Shaky Ground: The story behind the story,” tells that tale with tongue in cheek; it’s a great primer for any beginning journalism class. Corey G. Johnson, freshly hired from North Carolina and part of a young reporting contingent that has been mixed and mentored well by veterans like editorial director Mark Katches, stumbles on a list of 7,500 “unsafe schools” as he’s doing a routine story on the 20th anniversary of the Loma Prieta earthquake.

Along the way, the story grows in import and paperwork. California Watch, the less-than-two-year-old offshoot of the Berkeley-based Center for Investigative Journalism (CIR), adds other staff to the effort, including reporter Erica Perez, public engagement manager Ashley Alvarado, distribution manager Meghann Farnsworth, and director of technology Chase Davis, among other reporters.

In the end, the series rolled out in three parts — with maps, databases, historical photos, its own Twitter hashtag, a “My Quake” iPhone app — and a coloring book (“California Watch finds a new consumer group, kids“), intended to reach kids, the most important subject and object of the reporting. Already, the state legislature has scheduled hearings for April 27.

The reach of the roll-out is one of the new lessons here. Six major dailies ran at least some part of the series. ABC-affiliate broadcasters took the story statewide. Public radio news leaders KQED, in the Bay Area, and KPCC, in L.A. ran with it. KQED-TV. The ethnic press signed on: La Opinion ran two seismic stories Sunday and Monday, while at least two Korean papers, one Chinese paper, and one Chinese TV station included coverage as well. More than 125 Patch sites in the state (California is major Patch turf) participated.

A number of the distributors did more than distribute. They localized, using data from California Watch, and reporting on their local schools’ shape. KQED-TV produced a 30-minute special that is scheduled to air on at least 12 PBS affiliates in the state.

San Francisco Chronicle managing editor Steve Proctor is frank about how priorities and resource use have changed in the age of downsizing. When Proctor came to the paper in 2003, he says, the paper had five to seven people assigned to a full-time investigative team. Now there’s no team per se, with the Chronicle investing investigative resources in an “investigate and publish” strategy, getting stories out to the public more quickly and then following up on public-generated leads they create. It’s an adjustment in strategy and in resource allocation — and the California Watch relationship makes it even more workable. “We’ve been pretty sympatico with them from the beginning,” he said. “We’ve used the majority of what they’ve produced.”

So let’s get deeper into some numbers, informed by this series, and see where this kind of work can go:

  • “On Shaky Ground” cost about $550,000 to produce, most of that in staff time, as the project mushroomed. That’s now a huge sum of money to a newsroom, even a metro-sized one. Ask a publisher whether he or she is willing to spend a half a million on a story, and you know the answer you’ll usually get. It’s a sum few newsrooms can or will invest. Consequently, the economics of getting a well edited, well packaged series for a hundreth of that price is an offer few newsrooms can (or probably should) refuse.
  • California Watch, not yet two years old, runs on a budget of about $2.7 million a year. That budget supports 14 journalists, whose funding takes up about 70 percent of that $2.7 million number. That’s an intriguing percentage in and of itself; most daily newspaper newsrooms make up of 20 percent or less of their company’s overall expenses. So, disproportionately, the money spent on California Watch is spent on journalists — and journalism.

The project is about midway through its funding cycles. The ubiquitous Knight Foundation (which has contributed about $15 million to a number of investigative projects nationwide through its Investigative Reporting Initiative), the Irvine Foundation, and the Hewlett Foundation, all of which have provided million-dollar-plus grants, are reviewing new proposals.

The key word, going forward here, is “sustaining.” Will foundations provide ongoing support of the “public good” of such journalism? There’s lots of talk among foundations, but no clear consensus among journalism-facing ones. “There really isn’t a foundation community that thinks with a common brain — same situation as in the news community,” Knight’s Eric Newton told me this week. “Each foundation makes its own decisions using different criteria. Some foundations see their role as launching new things and letting nature take its course.” CIR executive director Robert Rosenthal is among those trying to find a new course. Although he’s a highly experienced editor, he finds that most of his time is found fund- and friend-raising.

  • California Watch is building a syndication business, feeling its way along. Already, six larger dailies — the San Francisco Chronicle, the Sacramento Bee, the Orange County Register, the San Diego Union-Tribune, the Fresno Bee, and the Bakersfield California — are becoming clients, paying a single price for the all-you-can-eat flow of daily and enterprise stories California Watch produces. They, a number of ABC affiliates (L.A.’s KABC, the Bay Area’s KGO, 10 News San Diego, 10 News Sacramento, KSFN in Fresno), and KQED public radio and TV in the Bay Area are also annual clients pay between $3,000 and $15,000 a year each. A la carte pricing for individual projects can run from $3,000 to $10,000. The California Watch media network, just launched in January, is an important building block of the evolving business model. It is clear that while syndication can be a good support, at those rates, it’s a secondary support.
  • So, if California Watch were to be totally supported by foundation money, it would take an endowment of $54 million to throw off $2.7 million a year, at a five percent spend rate. Now $54 million raised one time isn’t an impossible sum. Consider just one gift: Joan Kroc left NPR more than $200 million eight years ago. Consider that the billionaires’ club started by Bill Gates and Warren Buffett (encouraging their peers to give away half of their wealths) is talking about newly raising a half a trillion dollars for the public good. Last summer, I suggested the group tithe a single percentage point of the club’s treasury for news-as-a-public-good. It seems to me that stories like “On Shaky Ground” make that pivotal education/health/journalism connection; send “Shaky Ground” to your favorite billionaire and urge him to sign on.
  • Let’s do some cost-benefit analysis. How much is a single child’s life worth? How about a school of 250? We could consult a liability lawyer, who undoubtedly would put assign a six- and seven-figure number per life, and then tie up the courts, post-disaster, making the math work. So if California, bereft as it is of capital, were to invest in the infrastructure, per its own laws, wouldn’t it be ultimately cost-effective? Of course it would be, and in this case we see in microcosm, the question of American infrastructure writ large. Are we a country that will let more bridges fall into mighty rivers, more schools fall onto our children and more poor roads cause preventable injury and death? You don’t need my political rant here. Rather, let us just make the point that journalism — old-fashioned journalism, newly digitally enhanced — is a key part of forcing America to face its own issues, whatever the solutions.

In this project and in California Watch generally, we see the reconfiguring of local media. An owner — whether AOL, Hearst, or private equity — can hardly reject the offer of paying one-hundreth of the cost for space-filling, audience-interesting content. Welcome to a new kind of content farm, to use that perjorative for a moment. Yes, California Watch operates on the same Demand Media-like principle of create-once-distribute-many, realizing the digital cost of the second copy is nil. Let’s consider it the organic, cage-free content farm. It makes sense for a state the size of a country (California = Canada); smaller versions of it make equal sense for Ohio, North Carolina, or Illinois.

Older media outsources journalism and in-sources (affordable) passion. There are lots of lessons here (“3 Reasons to Watch California Watch“), but that fundamental rejiggering of who does the work and how it is distributed and customized is a key one. As Mark Katches points out, “They [distributing partners] put their voices on our story.” That’s a new system in the making.

Old(er) editors can learn new tricks. For a good show-and-tell of that principle, check out Rosenthal’s talk to TEDxPresidio two weeks ago. I first saw him give the talk at NewsFoo in Phoenix in December. Amid more tech-oriented talks, his stood out and was much applauded. It’s a clarifying call for real journalism, perfected for the digital age. Share it.

March 24 2011

17:32

Can eHow Get More Respect with Push for Quality Content?

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Business content on MediaShift is sponsored by the weekend MA in Public Communication at American University. Designed for working professionals, the program is suited to career changers and public relations or social marketing professionals seeking career advancement. Learn more here.

Content farms. Content mills. Robo-content.

Demand Media and its huge how-to site eHow have been called snarky names for years, largely because they pay low rates for quickly produced content based on popular search queries. So it's no surprise that a search for "how to grill fish" on Google produces this eHow article up near the top of the results.

Last year, MediaShift ran a week-long special report, Beyond Content Farms and one report by Corbin Hiar included a Demand Media writer saying that her haphazard report on "How to Make Gin at Home" could poison someone. Now, eHow execs tell me that they're taking steps to improve quality.

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"I know there was so much conversation out on the web about low quality content," said Greg Boudewijn, eHow's senior vice president and general manager, in a recent interview. "We realize we're human and there's going to be pieces of content that slip through that aren't great. Whatever we can do to provide means to continue to improve the processes and the content that exists on our site, that's something we take to heart. We applaud Google for their changes, and applaud any site that focuses on quality."

A recent redesign of eHow created colorful channel pages for Family, Food, Health, Home, Money, and Style. The cleaner look is being augmented with longer form feature stories, a video webisode series about the popularity of food trucks, and a content deal with Rachael Ray in the Food section. More importantly, eHow added new "Helpful?" buttons at the end of each article so people could provide direct feedback on whether articles are useful -- which will lead to more oversight of writers.

Despite a recent change in Google's algorithm to filter out poor quality content, eHow actually benefited from the change, according to both comScore and Sistrix. I spoke to both Boudewijn and Jeremy Reed, the senior vice president of content and editorial at Demand Media, in a wide-ranging interview. While they admitted they weren't on a path to match the New York Times, they were frank about their push into service journalism -- especially with the number one most trafficked home and garden site. Below is an edited transcript, with audio clips, from that phone interview.

Q&A

What were the main improvements with the redesign of eHow?

Greg Boudewijn: We were looking at this site as the next evolution of our site and user experience. It was a little more than four years since we touched it, it was 2007. Demand Media acquired eHow in 2006, so you can imagine that four years on the web is like 30 in real life. In that time, eHow had grown phenomenally based on our unique content model. It was time to re-architect the back end to handle the scale of innovation and development faster, and we wanted to launch more sites internationally.

We introduced a new eHow logo and color palette to introduce a more consumer brand. We wanted to create more of an emotional connection for them, and the best way we did that was the introduction of six core channels at the top of the header. Each channel has its own color palette and own look and feel. If you look back 10 years to the AOLs and Yahoos of the world, doing portal hubs -- a little bit of an antiquated term -- they had huge amounts of traffic coming through their front doors. And they could funnel that traffic to core verticals like news, finance and entertainment.

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Our model is very different. We made each individual content page as an entry point to our site. Over time, we saw audiences growing in certain core verticals and those are the ones we chose to use for our channels. People were coming repeatedly to certain topics so when we created the channel pages, we used them to create new content types. Everything from long-form video webisodes to blogs and posts from experts. We partnered with Rachael Ray for our food category. The experts can be personalities or brands.

In the home channel, we have Home Depot to help users fulfill what they're looking for. It's about simplification. You have the steps to do something and can go out and buy it. The new site is a springboard to expand the media company to cater to more than how-to articles.

You were thinking of every story as an entry point but now you have vertical sections. Why? Because of traffic patterns you saw?

Boudewijn: We still view articles and videos as entry points whether people get there from search or social networks. What we saw was that we were amassing audiences of a scale that was much larger than sites on the web that only focused on that specific topic. That was evident with the home category, where for more than the past year, we've been the number one home and garden site on the web. We felt it was our responsibility to make a front door for that and program it daily with a rich experience.

Tell me more about the new longer form stories and features.

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Jeremy Reed: One of the things we've always focused on is the idea of utility. But there's also the opportunity to entertain them or take them to the next step or direct them to another place. We have 15,000 active people in our community [of contributors] throughout the U.S. -- we have filmmakers, copy editors, writers. They were very good at creating this specific kind of content, but they also have experience writing feature content, or filmmakers had experience doing longer form content. We had a talent base in our community, so it made sense on the business side and an opportunity for that community so they could grow their career.

Was the business reason for doing longer stories so that you could improve the time spent on your site?

Reed: When we look at content, we look at many signals. We look at content that could hold its weight next to branded advertisers, and content that people would want to share. In the last month, we had 100,000 articles shared through Facebook. So it's trying to figure out compelling content based on the signals coming to our site.

Boudewijn: It's about completing the user experience. We've done a really good job doing articles of a certain length and type. So what happens now is, because we've created these channels, the content we create in one channel can be fundamentally different than in others. We're providing something with an expert voice, and something they can follow daily. It has more of a personality and engagement factor.

How has pay for writers evolved at eHow, and will you change compensation with this redesign?

Reed: We've always had a range in compensation. We've paid anything from $7.50 for a short-form tip to more than $100 for feature articles. Different ranges for filmmakers. I think the price that we pay has certainly gone up. We pay our writers twice a week, so if they turn in an article on a Sunday, we pay them on Tuesday. If they turn an article in on Wednesday, we pay them on Friday, regardless of the amount paid.

Reed explains how eHow is transparent to writers about how much they'll get paid and let writers of similar content see how much everyone in that subject gets paid:

ehow1.mp3

Does pay vary according to topic or length of story?

Reed: We look at different factors like subject area expertise and how much time it takes to write it and other factors like that.

How is this redesign targeted at advertisers? You mentioned there would be more "touch points" for them in your press release about the redesign.

Boudewijn: We were very good at providing a utility, and there was content programmed on the home page focused on how-to, but not differentiated by category. When we acquired eHow in 2006, branded sales wasn't a big part of our business. We relied primarily on third party relationships with advertising affiliates. Over time, with the hiring of Joanne Bradford [from Yahoo to be chief revenue officer of Demand Media], branded advertising has become a bigger part of our business. Those advertisers want to own the consumer experience. They want to see their placement on the page and see the integration. They want to know the boundaries around where that exists.

So when we did the redesign, we looked at aesthetics of the site but also looked at places where advertisers could come in and buy sponsorships or packages. One thing that's unique about what we do is our content is all intent-driven. We're not an entertainment site or news site where people come to the front door and say, "entertain me." But eHow is intent-driven; people come with a specific mission and we want to help fulfill that. That's a very meaningful experience and a funnel that advertisers want to be a part of.

Plus, we wanted to position experts. Brands want to be associated with the Rachael Rays of the world and expert knowledge that's honest and genuine. That's a great opportunity for advertisers to wrap around eHow Food. And there's also an opportunity for brands as experts. So for the Home Depots of the world ... a user coming to the site recognizes an advertiser that adds value to the experience, and it helps them.

Boudewijn explains how Home Depot will help users as an "advertiser presence" that will help users complete tasks.

ehow2.mp3

You've added this "Helpful?" button to get feedback from readers. How does that work?

Boudewijn: We've been very good at listening to signals out on the web, whether through search or social to understand what content we should create. eHow has a massive audience, and it's one thing to be in the studio evaluating writers on a number of metrics -- their grammar, their quality, their experience. That's an academic way. But we want to know how our content resonates with people who are using it in on an everyday basis. So these buttons are the first step of a curation layer to understand how helpful our content is in the real world.

helpful choice.jpg

Right now we let people tell us if it's helpful, and they can "like" it or share it on Facebook and Twitter. If they don't think it's helpful, then we're gathering reasons on why it might not be helpful for them, and funnel that information back to our editorial team to help enrich our content and inform our guidelines on what to produce. That's just our first step, there will be other hooks on the page to solicit feedback in the coming months.

Reed: One of the things we've done from the beginning is make sure we understand the quality of the content by the people who use it. We've let people make comments and ratings on stories, but we wanted to go back to ask the specific question: Was this helpful or not? Like Greg was saying, we can take that information and go back to the writer and decide if we want to give them more work, or are they better in one subject than another. It's a constant, targeted feedback loop from someone who's engaging with that content.

I noticed on Compete.com that the traffic for eHow went down about 7 percent in visits and 4percent in unique visitors for February 2011. Was that related to what happened with Google changing its search algorithm?

Boudewijn: February is naturally a shorter month. Most businesses on the web, going from a 31-day month to a 28-day month, especially with the two holidays for Valentine's Day and President's Day, you have a lot of events that make businesses fluctuate. We're now Top 10 in the U.S., according to comScore. I don't rely heavily on third-party analytics that we don't have direct influence over, so I can't necessarily comment on Compete's numbers.

Google makes algorithm changes all the time, but when they make it public, people seem to gravitate to them. We've seen them make a number of changes, and we see ups and downs. Our business continues to grow and we haven't seen any material effect from [Google's algorithm changes].

(Editor's Note: In a follow-up query to comScore, the research firm also found a slight drop in traffic to eHow in February, but attributed it to the shorter month as well, and noted that the Google-referred percentage of traffic to eHow is actually slightly higher in February than January.)

Are there other things you're doing to improve the quality of content?

Boudewijn: If you look at the way we produced content two years ago, it's fundamentally different than the way we do today. One of the unique things we're doing is creating these channels and aligning writers in Demand Studios with those channels. We're also vetting the talent to make sure they're qualified to write for us. Content quality is such a broad term. You could take the New York Times' content and put it on someone's blog and put 15 AdSense ads around it and show it to 100 people and they'd say it's terrible.

Content quality comes down to the process by which it's created, and we stand behind our editorial process. At eHow, we want to make sure it's a quality experience for users and for brands and advertisers.

Reed: We did make a make a conscious effort to stay within what we could do responsibly within our model, within our community, within our scale. We didn't go after investigative reporting like the New York Times does because we didn't feel in the current equation that we could do it successfully. We went after this very service journalism, the utility kind of content. We started to see the value of subject matter expertise, and an editorial process. We wanted people to come through the door with years of experience, so that it makes sense for them as part of their career.

Our editorial rigor includes plagiarism checks, citing references, going through a copy editor so we felt good about that content. We have a very large taxonomy, so we've tried to cut that up so everyone has subject matter expertise, including the people who write the titles, who edit the copy, who select the photo, all the way down to the people editing it and giving it the final OK.

Boudewijn says they realize there will be some pieces of content that slip through 'that aren't great,' but they're trying to improve:

ehow3.mp3

How do you vet the people that you hire?

Reed: It's on two levels. We qualify people who come in. If you're a writer, you submit a resume and multiple clips and we have an in-house editor who vets that. If you're a copy editor, it's the same process but if you're accepted there's a copy editing test. So if you're going to edit a section on automobiles, you get a test based on that subject. That's one part of our approach. And then on each piece of content, every writer gets edited by a copy editor and has a possible re-write before it's sent through. The copy editor then rates the writer on a 1 to 5 scale on grammar and on subject matter expertise.

We look at every single person and qualify them, and look at every single piece of content.

Do you own all rights to the content or can writers or videographers re-use the material?

Reed: We made the decision that if we would pay up front and pay for that piece of content that we would own it.

Boudewijn: That was one of our learnings over time, that ensures our editorial process and integrity. Early on, in 2006, we did allow people to come directly to eHow.com and submit content. We dropped that program last April because it didn't make sense to put all the time and energy into producing content with a rigorous editorial process, and then have people submit things without any process. So today we stand behind our content because it's completely owned by us.

*****

What do you think about eHow's redesign and push for higher quality content? Do you use the site regularly or avoid it? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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March 04 2011

16:00

January 28 2011

15:30

January 13 2011

15:30

The Newsonomics of 2011 news metrics to watch

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

In the digital business, the old aphorism — “If you can’t measure it, it doesn’t exist” — is rapidly moving from article of faith to fundamental operating principle. Measurement systems are just getting better and better.

Yes, there are still quite a few naysayers in the digital news business, those who believe that editorial discretion is superior to any metric the digital combines can kick out. They’ll say you can’t measure the quality of journalism created — and, of course, they are partly right. The truth of the moment is that good (to great) editors, armed with good (to great) analytics, will be in the winners in the next web wars. The same is true for digital marketers working for news companies. Unless they combine their knowledge of markets, customers, and advertisers with often real-time numbers about performance, they’ll lose business to those who do.

The counting of numbers, though, is tricky. So many numbers, so little time, as 24/7 digital keystrokes stoke endless reams of data. Which ones to count, and which to pay closest attention? Meaningful numbers, of course, are called metrics, and meaningful interpretation of those numbers we now call analytics. These analytics, discovered or undiscovered, then drive the business, and they are particularly important in great times of change, when whole industries move profoundly digital. As that old investigative reporter Sherlock Holmes said, “Data. Data. Data. I can’t make bricks without clay.”

In the spirit of the new year, let me suggest some of the more valuable emerging metrics for those in the news business in 2011. Further, in that spirit, let’s pick 11 of them. These aren’t intended to be the most important ones — the mundane price of newsprint, trending up recently, still is a hugely influential number — but ones that are moving center stage in 2011.

1. How much are news companies getting for tablet advertising? Or, in more numerical terms, what’s the effective CPM, or cost-per-thousand readers? In 2010, those with tablet news products reaped a small windfall, gaining rates as high as $150 per thousand readers, which would be 20 times what many of them get for their website ads. Much of that business was “sponsorship,” meaning that advertisers paid simply for placement, not actually based on number of readers. It was the blush of the new, and the association with it, that drove that kind of money. While early 2011 pricing is still very good, as the tablet market goes mass, what will happen to the rates news companies can charge advertisers? This is a huge question, especially if tablet news reading does hasten movement from ad-rich newsprint (see “The Newsonomics of tablets replacing newspapers“).

2. What percentage of unique visitors will actually pay for online access? It’s going to be a tiny percentage — maybe one to five percent of all those uniques, the majority tossed onto sites by search. If it’s less than one percent, paid metered models may be of little consequence. At two percent, especially for the big guys, like The New York Times with its imminent launch, the numbers gets meaningful and model-setting.

3. Where are the news reading minutes going? The Pew study showing that Americans are reading news 13 minutes a day more, probably given smartphone usage, was a thunderbolt — a potential sign of growth for a news industry that has felt itself melting away. With tablet news reading joining even more smartphone reading (only 20 percent of cellphones are “smart” right now), each news company will have to look at its logs to see which readers are reading what with what kind of device — which will tell where reading is increasing and where (let’s guess, print) it is decreasing. Then comes the job to adjust products accordingly.

4. How good are the margins in the fast-developing marketing services business? Tribune’s 435 Digital, GannettLocal, and Advance Internet are among the leaders selling everything from search engine marketing and optimization to mobile and social to local merchants. It’s a big shift for big newspaper companies used to selling larger ticket ads to relatively few customers. There is no doubt that local merchants want help in digital marketing. The number to watch for the newspaper companies is their margin on sales — after paying off technology partners from Google to Bing to WebVisible. Once we see how those margins settle in, we’ll know whether marketing services is a big, or small, play to find local news company profit growth.

5. How much of digital revenue is being driven by digital-only ad sales? McClatchy has been a leader in unbundling print/online sales, with digital-only now approaching 50 percent. That’s a big number for all media companies to watch. Not only is the market pushing them to offer unbundled products, but the sooner they sell digital separately on its own merits, the faster they grasp the growing business and slowly cut the cord to the declining one.

6. How much of news traffic is now being driven by Facebook and Twitter? A few companies, including The Washington Post, know daily how much of their traffic is driven by social media; many others have little clue. Those that do watch the number know that Facebook and Twitter are the number one growth driver for news “referral” traffic, and that social traffic (friends don’t let friends read bad news) converts better to more regular readership than does search traffic. This metric then pushes newsrooms to more greatly, and more quickly, participate in the social whirl.

7. How much will membership grow at the highest-quality, online-only local news start-ups? MinnPost just hit 2,300, an impressive number, but it’s been a three-year road to get there. It is hiring a membership director and trying to better convert regular readers to members. The Texas Tribune is pushing toward 2,000 and Bay Citizen 1,500. Can membership be a significant, and ramping, piece of the new news business model, or will it have to look elsewhere — advertising, syndication, events, more grants — to find sustainable futures?

8. How many titles — and readers — is Journalism Online able to bring into its Press+ network? Journalism Online has moved from a question mark to a well-situated player in the iPad-fueled universe of paid content. Its Press+ network offers the promise of that elusive “network effect” — but only if it gets real scale.

9. How much “extra” do news companies charge for digital access? Okay, every publisher wants to be paid for news content. But as they test out pricing, they’re all over the board in how much to charge. Some want to charge as much for digital as for print; others are willing to throw in digital access for “free” if readers maintain print. The number to watch is one probably about 10-20 percent higher than print alone — as an opt-out upsell — and see how much that sticks with print readers. If that works, new “circulation” revenue helps replaces some of that disappearing ad money — and provide a route to a time of mainly digital, partially paid access.

10. What’s your cost of content? No journalist likes to be thought of as a widget producer, but news is a manufacturing trade, as the Demand Media model has shown us. How can news companies lower the cost of content while creating more? That’s why we see new Reuters America deals, Demand partnerships, more user-gen, more staff blogging. Editors are more needed than ever to make quality judgments about new content, but they and their business leaders must understand what content — high-end and low — really costs to produce.

11. How much do you spend on analytics? Ultimately, investing in the collection and interpretation of data is a big test of news companies’ ability to play digital. I’ve noted (“The Newsonomics of the FT as an Internet retailer“) how the Financial Times has set the pace for the industry in establishing a new team of (non-newspaper) people to run its analytics arm. That operation now numbers 11, up from nine last year. A good beginning metric for any news company to ask: How much money are we investing in understanding our business with the tools of the day?

November 11 2010

16:00

The Newsonomics of journalist headcounts

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

We try to make sense of how much we’ve lost and how much we’ve gained through journalism’s massive upheaval. It’s a dizzying picture; our almost universal access to news and the ability of any writer to be her own publisher gives the appearance of lots more journalism being available. Simultaneously, the numbers of paid professional people practicing the craft has certainly lowered the output through traditional media.

It’s a paradox that we’re in the midst of wrestling with. We’re in the experimental phase of figuring out how much journalists, inside and out of branded media, are producing — and where the biggest gaps are. We know that numbers matter, but we don’t yet know how they play with that odd measure that no metrics can yet definitively tell us: quality.

I’ve used the number of 1,000,000 as a rough approximation of how many newspaper stories would go unwritten in 2010, as compared to 2005, based on staffing reduction. When I brought that up on panel in New York City in January, fellow panelist Jeff Jarvis asked: “But how many of those million stories do we need? How many are duplicated?” Good questions, and ones that of course there are no definitive answers for. We know that local communities are getting less branded news; unevenly, more blog-based news; and much more commentary, some of it produced by experienced journalists. There’s no equivalency between old and new, but we can get some comparative numbers to give us some guidelines.

For now, let’s look mainly at text-based media, though we’ll include public radio here, as it makes profound moves to digital-first and text. (Broadcast and cable news, of course, are a significant part of the news diet. U.S. Labor Department numbers show more than 30,000 people employed in the production of broadcast news, but it’s tough to divine how much of that effort so far has had an impact on text-based news. National broadcast numbers aren’t easily found, though we know there are more than 3,500 people (only a percentage of them in editorial) working in news divisions of the Big Four, NBC, ABC, Fox, and CBS — a total that’s dropped more than 25 percent in recent years.)

Let’s start our look at text-based media with the big dog: daily newspapers. ASNE’s annual count put the national daily newsroom number at 41,500 in 2010, down from 56,400 in 2001 (and 56,900 in 1990). Those numbers are approximations, bases on partial survey, and they are the best we have for the daily industry. So, let’s use 14,000 as the number of daily newsroom jobs gone in a decade. We don’t have numbers for community weekly newspapers, with no census done by either the National Newspaper Association or most state press associations. A good estimate looks to be in the 8,000-10,000 range for the 2,000 or so weeklies in the NNA membership, plus lots of stringers.

Importantly, wire services aren’t included in the ASNE numbers. Put together the Associated Press, Reuters, and Bloomberg (though some of those workforces are worldwide, not U.S.-based) and you’ve got about 7,500 editorial staffers.

Let’s look at some areas that are growing, starting with public radio. Public radio, on the road to becoming public media, has produced a steady drumbeat of news about its expansion lately (“The Newsonomics of public radio argonauts,” “Public Radio $100 Million Plan: 100 Journalist Per City,”), as Impact of Government, Project Argo, Local Journalism Centers add more several hundred journalists across the country. But how many journalists work in public broadcasting? Try 3,224, a number recently counted in a census conducted for the Corporation for Public Broadcasting. That’s “professional journalists”, about 80% of them full-time. About 2,500 of them are in public radio, the rest in public TV. Should all the announced funding programs come to fruition, the number could rise to more than 4,000 by the end of 2011.

Let’s look at another kind of emerging, non-profit-based journalism numbers, categorized as the most interesting and credible nonprofit online publishers by Investigative Reporting Workshop’s iLab site. That recent census includes 60 sites, with the largest including Mother Jones magazine, The Christian Science Monitor, ProPublica, the Center for Investigative Reporting, and and the Center for Public Integrity. Also included are such newsworthy sites as Texas Tribune, Bay Citizen, Voice of San Diego, the New Haven Independent and the St. Louis Beacon. Their total full-time employment: 658. Additionally, there are high dozens, if not hundreds, of journalists operating their own hyperlocal blog sites around the country. Add in other for-profit start-ups, from Politico to Huffington Post to GlobalPost to TBD to Patch to a revived National Journal, and the journalists hired by Yahoo, MSN and AOL (beyond Patch), and you’ve got a number around another thousand.

How about the alternative press — though not often cited in online news, they’re improving their digital game, though unevenly. Though AAN — the Association of Alternative Newsweeklies — hasn’t done a formal census, we can get an educated guess from Mark Zusman, former president of AAN and long-time editor of Portland’s Willamette Week, winner of 2005 Pulitzer for investigative reporting. “The 132 papers together employ something in the range of 800 edit employees, and that’s probably down 20 or 25 percent from five years ago”.

Add in the business press, outside of daily newspapers. American City Business Journals itself employs about 600 journalists, spread over the USA. Figure that from the now-veteran Marketwatch to the upstart Business Insider and numerous other business news websites, we again approach 1,000 journalists here.

What about sports journalists working outside of dailies? ESPN alone probably can count somewhere between 500 and 1000, of its total 5,000-plus workforce. Comcast is hiring by the dozens and publications like Sporting News are ramping up as well (“The Newsonomics of sports avidity“). So, we’re on the way to a thousand.

How about newsmagazine journalists? Figure about 500, though that number seems to slip by the day, as U.S. News finally puts its print to bed.

So let’s look broadly at those numbers. Count them all up — and undoubtedly, numerous ones are missing — and you’ve got something more than 65,000 journalists, working for brands of one kind or another. What interim conclusions can we draw?

  • Daily newspaper employment is still the big dog, responsible for a little less than two-thirds of the journalistic output, though down from levels of 80 percent or more. When someone tells you that the loss of newspaper reporting isn’t a big deal, don’t believe it. While lots of new jobs are being created — that 14,000 loss in a decade is still a big number. We’re still not close to replacing that number of jobs, even if some of the journalism being created outside of dailies is better than what some of what used to be created within them.
  • If we look at areas growing fastest (public radio’s push, online-only growth, niche growth in business and sports), we see a number approaching 7,500. That’s a little less than 20 percent of daily newspaper totals, but a number far higher than most people would believe.
  • When we define journalism, we have to define it — and count it — far more widely than we have. The ASNE number has long been the annual, depressing marker of what’s lost — a necrology for the business as we knew it — not suggesting what’s being gained. An index of journalism employment overall gives us a truer and more nuanced picture.
  • Full-time equivalent counts only go so far in a pro-am world, where the machines of Demand, Seed, Associated Content, Helium and the like harness all kinds of content, some of it from well-pedigreed reporters. While all these operations raise lots of questions on pay, value and quality, they are part of the mix going forward.

In a sense, technologies and growing audiences have built out a huge capacity for news, and that new capacity is only now being filled in. It’s a Sim City of journalism, with population trends in upheaval and the urban map sure to look much different by 2015.

Photo by Steve Crane used under a Creative Commons license.

September 30 2010

17:00

The Newsonomics of journalistic star power

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Maybe it’s a trend, or maybe it’s a bubble, but Jim Romenesko’s blog is chockablock with high-level journalist movement. The Newsweek Six are on the auction block, sought by eager bidders, as Time Warner solidifies its relationship with Fareed Zakaria, making him a wholly owned, cross-platform phenomenon, and Howard Fineman gets tapped on the shoulder by The Huffington Post, soon after it hired away The New York Times’ Peter Goodman.

Daniel Gross jumps from his long-time Slate home to Yahoo Finance. The National Journal makes acquisition after acquisition, this week reeling in Dave Beard, the well-respected editor of Boston.com, where he joins numerous other veterans (AP’s Ron Fournier, Newsweek’s Michael Hirsh, The Atlantic’s Marc Ambinder, Fox’s Major Garrett, among them) who’ve recently made a switch. After an apparent flirtation with AOL, Kara Swisher and Walt Mossberg stay safely in the News Corp bosom, while AOL spends its bonus dough on TechCrunch, buying a brand and an established news operation.

Other well known journalists are also suddenly fielding calls of interest — and often moving on to new adventures. Bloomberg’s been hiring pedigreed journalists by the dozens, for Bloomberg Government and other initiatives. Patch is snatching many of its regional editors from daily newspaper ranks.

What we’re seeing is a market develop. This is market that newly prizes talent, but a certain kind of talent. Most of the hiring is at the minor star level, though the lumens emitted vary. How do you measure — critical to digital success — the light?

First off, the hiring companies believe they know sustainable models of building businesses on higher-quality content. That may seem basic, but when we look at the much of the newspaper, broadcast, and consumer magazine worlds, that belief is flagging. They look at well salaried, professional staffs and see high “cost structures,” which are harder to justify, given current levels of advertising and the lack of successful digital revenue models.

We know that Yahoo and AOL, increasingly competitive with each other, believe they’ve found a working formula to make good content pay profitably. Tim Armstrong, AOL’s CEO, talks about “sparking a content revolution.” His formula, and Yahoo’s, is fairly straightforward, and borrows its commandments from the Demand Media bible. It’s all about the efficient ad monetization of content, with analytics — know the nature of the content, target the reader and align the advertiser — that seem to grow better week by week (see The Newsonomics of content arbitrage).

(AOL, ironically, is milking its online access business — yes, lots of people still think of AOL and Internet service as the same thing — drawing 43 percent of its revenue from it. That’s similar to newspapers milking the print business for as long as possible, as they can make the inevitable digital transition. By that comparison, AOL’s lifeline is much shorter, with a 25-percent 2Q drop in customers paying for that access, while most newspaper companies’ circulation revenue down only in low single digits.)

The newsonomics of the star hires is intriguing. Think of these “star” hires as individual SKUs, “products” whose value can be estimated against the customers they bring in the door. Those conversion customer metrics are evolving. Counting pageviews is the simplest way. Take those views at whatever (premium?) rate you can sell them, and you’ve got a first number. The intangibles are how many new unique visitors the Zakarias, Finemans, and Grosses bring with them from their old haunts. How many of those new customers become regular customers of the outlet? That gets you to some annual and/or lifetime value metrics. As metrics are collected and tested, we’ll see some more science brought to what is now a star-search art form.

There certainly are other intangibles. What is Yahoo News exactly? What is HuffPo? What is AOL? As they define themselves as legitimate news companies, the new stars bring cred — and legitimacy. In addition, they are magnets to other, lesser-known talent, signaling, “it’s okay to come here.” There’s economic value in that, too.

Notably, few established legacy brands are hiring new top-end talent; Time’s Zakaria hire is a smart, though unusual one, enabled by the Newsweek uncertainty and Time/CNN linkage. For the most part, legacy news companies’ growth scenarios are borrowed, curiously, from those now hiring those stars: multiplying the amount of content available under their brands, harnessing amateur and lower-cost stuff from local bloggers, licensing from Demand Media and aggregating content through FWIX, Outside.in, and OneSpot. They’re the ones paying heed, at least indirectly, to Wikipedia’s Jimmy Wales’ observation that hiring six-figure columnists in this time is silly: “The best of the political bloggers are easily the equal of the opinion columnists at the New York Times. I don’t see the added value there and question whether a newspaper should be paying large sums of money for that any more.”

The hirings at the National Journal and Bloomberg point to a different kind of business model. Those companies have found niche models involving significant reader and/or enterprise payment, and now are building out, and around, those businesses. They, too, believe they can make a new business out of superior content.

It’s complicated, and there are more than two phenomena happening here. Yes, some players that have built successful enterprises — think Yahoo, AOL, Huffington Post — on non-professional staff content (through aggregation, pro-am sites, and more) are now adding the pros at the top, to reinforce brands and put faces on them. At the same the high-cost, pro-based enterprises are going the other way.

It’s not an equilibrium, nor will these models meet in some neat middle, but there’s some sense of coming at a similar solution from two ends of the spectrum. It’s a blend of old and new, expensive and cheap, and no one yet knows the best formula.

Arianna Huffington explains it as a maturation, and indicates the hiring of pros was part of the original Huffington Post plan: “From the day we launched, it was our belief that the mission of The Huffington Post should be to bring together the best of the old and the best of the new. Bringing in the best of the old involved more money than we had when we launched. But now that our website is growing, we’re able to bring in the best of the old.”

The likely result of these moves? By 2015, news companies will pay top dollar, and pound, euro and yen, for top-end talent, and they’ll pay as little as possible for good-enough newsy content that fills many topical and local niches. Over the next several years, the most successful media brands will have mastered better the economics of pro-am journalism.

Infrared image of a star cloud courtesy of NASA.

September 23 2010

09:42

September 02 2010

15:00

The Newsonomics of less-is-more, more or less

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

It is a head-turner, which seems to be, at first, an only-in-Utah story. The Deseret Morning News, KSL TV, and KSL Radio, all owned by one company, the Deseret Management Co., a for-profit arm of the Church of Latter-Day Saints, are combining operations.

One headline: “Salt Lake City paper axes 43% of its staff”.

Another: “Deseret News a model of growth and innovation for the entire industry”.

One’s a fact; the other is aspirational.

Remove the religious subtext, for a moment, and I believe we see a model that will appear ordinary in many American cities, within a few years. Think about it. If we as readers, viewers and listeners want words, photographs, videos, and audio, and expect it to be served up in an easy-to-use, relevant-to-me way, then why would the companies that produce news in those various forms be separate?

They’re separate, of course, because those words/picture/audio used to be called newspapers/magazines, network and cable TV and radio broadcasters. Those words, though, describe the old world, those packages the content came wrapped in. In our digital world, we’re seeing delivery blur through the Internet. And, that inevitably, and now more quickly, means that single companies will produce words, pictures and sound — and they’ll find ways to do it more cheaply and efficiently.

If you own the Salt Lake properties, or if you’re Tribune and own the Chicago Tribune, WGN-TV and WGN radio, you practically have a fiduciary responsibility to rearrange assets that will make the company more efficient. If you own a broadcast station or a newspaper, you can more easily see the rationale in buying or combining with the other, to meet customer (reader/viewer and advertiser) demands of the coming age.

So the Salt Lake Experiment joins TBD’s (“The Newsonomics of TBD“) in putting together the text and video pieces. They are the next generation in this attempt to make convergence work. Call it News Convergence 2.0, with Tampa’s Tribune/WFLA experiment the best poster child for 1.0. How well the Deseret operation (or TBD) executes is, of course, the key. Journalism isn’t about white-board theories, in any era; it’s about getting the news gathered, analyzed, and distributed to readers, and doing it better than the competition.

Let’s look at the newsonomics of the Deseret decision, though. The numbers in play are curious ones, as Deseret News President and CEO Clark Gilbert lays out a “less is more” theme in the major restructuring of his company. In fact, let’s use the more and less theme to gauge the moving pieces of the new business model.

  • Less is More: Take that “43%” headline. The legacy news staff of the Deseret News has indeed been cut 43 percent — 85 jobs, including those of the editor and publisher of the paper. That number includes both full-time and part-time positions. So we’d expect a lot less coverage, right? With a bit of frustration in his voice, Deseret News President and CEO Clark Gilbert tells me bluntly “That’s an Old Media world view. We have access to more journalists, hyperlocal contributors, national sports figures than ever before.” His point, and his plan: The combined operations of the remaining Deseret News staff and the sister news staffs at KSL TV and radio will operate smarter and more efficiently.

    “Say there’s a story on Capitol Hill [in Salt Lake City]. Right now, the paper sends a reporter and a photographer and KSL sends a reporter and videographer. That’s four people, and that story may end up on B3,” says Gilbert. “Now we’ll send one.”

    So, step one: “Reduce duplication.”

    So the news math changes dramatically. The new staff of something more than 200 (Gilbert is being cagey about the number) will be expected to multitask, with remaining staffers increasingly cross-trained and “new employees expected to have those skills.” Do the math. If it took four people to do a story and now it takes only one, you can afford to jettison one of those positions and get more productivity out of the other two.

    Step two: “Deepen coverage,” meaning the re-allocating of resources to cover issues most important to the readers. Gilbert says that about half of the remaining news staffers will serve in the “integrated newsroom,” with the remainder staying in more traditional journalistic roles. In that integrated newsroom of roughly a hundred, a third will serve as first responders/rewrite and two-thirds as field reporters. “You’re sandwiching the reporters between first responders [getting to news and getting it out quickly] and rewrite [those taking the reporters work and purposing it for various platforms],” explains Gilbert. Those who first-respond also do rewrite — so that’s going to be a busy staff.

    The journalistic question: How do the new stories compare to the old ones?

  • More Costs Less: Borrowing basic notions of getting cheap and free content from the Huffington Post and Demand Media, Gilbert is putting into action what he has long preached in academic and consulting circles. I’ve called this emerging time the Age of Cheap Content. That principle means that the new Deseret operation will leverage bigger-name writers (especially those consistent with its Mormon roots and values, like former BYU football star and current Philadelphia sports anchor Vai Sikahema) for little financial compensation. That’s the HuffPo model. And they’ll leverage Salt Lake and Utah reporters to address both topical and hyperlocal coverage, through the new Deseret Connect. That’s the Demand side of the idea, bringing together a large database of qualified writers — “not random bloggers,” says Gilbert — and keeping their payments low or non-existent. “Some of the best don’t write for money.”

    Deseret Connect already has received more than 100 applications, and Gilbert says he can see it scaling to a thousand or more contributors within the year, using management system techniques developed outside the news industry for BYU/Idaho faculty.

    Gilbert says the non-pros will work on a path from generalists to columnists to doing editorial features, with pay increasing along that continuum — though he’s clear to point out that people doing the writing won’t be looking to the company “as their main source of income.”

    So, looking at cost per content unit — a Demand-like analytic — the new company will be able to house lots more content under its brand, at a far lower cost point.

  • More Beats Less: The Deseret play aims to bring together text stories and blogs, video, and audio. That supposes that readers want all kinds of coverage brought together for them. It’s a bet that products that converge video and stories for readers will beat the competition, competition like MediaNews’ Salt Lake Tribune, the biggest non-church-owned news presence in the state. One big question here: How will the customer experience be converged? In Washington, two ongoing TV stations folded their websites into the new TBD at launch. How separate and how unified will the DeseretNews.com and KSL.com sites be?
  • More is More: The new Deseret operation doesn’t just focus on geography — Utah’s more than 700,000 households. It’s taking a twin approach to being a general interest news site — and a new worldwide voice for the Mormon faithful of 13 million or so worldwide. In the company’s strategy, that’s described as a values-oriented approach, and you can already read that six-point values mantra widely. The six: “the family, financial responsibility, excellence in education, care for the needy, values in the media, faith in the community.” They make for a strong philosophy, but in marketing, that’s quite a straddle — one that may be difficult to pull off, especially as Salt Lake City itself has become majority non-Mormon.

The economics of it are clear, though. Pay (or don’t) to get a story written or a video shot once, and then distribute it many times over. It’s basic Internet economics, with a nichy, religious angle, one of many variations we’ll soon be seeing on these increasingly popular themes.

August 13 2010

14:00

This Week in Review: TBD takes off, Demand Media’s profit-less past, and Google’s open-web backlash

[Every Friday, Mark Coddington sums up the week’s top stories about the future of news and the debates that grew up around them. —Josh]

A high-profile entry into the local news scene: One of the most anticipated new news organizations in journalism’s recent history launched this week in the form of TBD, a site owned by Allbritton Communications (the folks behind Politico) covering local news in Washington, D.C. As The Huffington Post’s Jack Mirkinson wrote, TBD is “something of a canary in the coal mine” of the future of journalism, being the protoype of a locally focused, community-driven, online-only news model whose effectiveness everyone’s eager to gauge. For the basics of the project, here are two local profiles from DCist and the more skeptical Washington Post, a paidContent interview with Robert Allbritton, a Poynter chat with TBD’s Jim Brady and Steve Buttry, and an Online Journalism Review interview with Buttry.

After TBD gave its media preview last Friday, quite a few people listed plenty of reasons to keep an eye on the site: Ken Doctor liked the “out of the box” nature of TBD’s pro-am/social/mobile/multimedia efforts; Jeff Jarvis liked the collaborative, link-centric philosophy; the Lab’s Laura McGann called attention to TBD’s interactivity and collaboration through local blogs and social media; and Kevin Anderson was impressed by the project’s commitment to profitability.

Several TBD analyses focused particularly on TBD’s interactive and collaborative news efforts, with Journalism Lives, Mashable, and Poynter providing good area-by-area breakdowns. Mark Potts, who’s starting up a similar blog-network effort, Growthspur, wrote a thoughtful piece about the importance of TBD’s own network of local blogs: “TBD is without doubt the biggest, most ambitious effort yet to create a new paradigm for local news coverage of a major metropolitan area,” he wrote.

Poynter’s Steve Myers also touched on an distinct aspect of TBD’s operation — it also includes an Allbritton-owned all-news local cable channel that will be branded TBD TV. He examined how a web-TV converged newsroom operates, and Cory Bergman of Lost Remote (a local TV and hyperlocal news veteran himself) wondered if we might see more TV-local online news partnerships. Here at the Lab, Ken Doctor took a detailed look at the economics of TBD’s web-TV synergy, centering on its pioneering broadcast and online advertising hybrid. Meanwhile, David Rothman had some detailed advice for TBD’s competitors.

The site officially launched Monday, and the initial reviews were mostly positive. Rothman and Suzanne Yada had the most detailed ones; both were impressed by the site’s presentation and several of its features, though both were concerned about how much local news content the site would actually be able to produce. PaidContent’s Staci Kramer liked the smooth design, too, but wanted to see more out of the site’s locally personalized features. Jack Shafer of Slate loved the way the site was mobile, direct and useful, especially its focus on those local-TV staples of weather, traffic, and sports.

The New York Times’ David Carr (“extremely functional…kind of ugly”) and Mediaite’s Michael Triplett (“off to a good start,” despite “thin and D.C.-centric” content) also offered quicker reviews. The most thoughtful review belongs to Lost Remote’s Bergman, who noted that while many of the ideas are old, their implementation is new. “This is the first time that a local media group — especially in the TV space — has wrapped these ideas together and aggressively launched them with an investment to back it up,” he wrote.

Demand Media’s filings raise questionsDemand Media, the new-media lightning rod du jour, filed for an IPO last Friday, giving us the first detailed financial look inside the private company. Several sites took cracks at sifting through the numbers for significant bits, but two pieces stood out: One, Demand Media has yet to make a profit, losing $22 million this year; and two, 26 percent of its revenue comes from cost-per-click advertising deals with Yahoo.

That’s a pretty sizable chunk of Demand Media’s income, and GigaOM’s Mathew Ingram examined one of the company’s reported risk factors — that Google could use its own search expertise to create a search-driven content company to compete with Demand. Ingram pointed out that Google already has a patent for a process that identifies “underserved” search content. All Things Digital noted that Demand’s heavy reliance on Google “could torpedo the company” if Google changes its search formula or changes its contract with Demand, but it also countered that every web publisher is dependent on Google.

Then there’s the whole matter of profitability. The Wall Street Journal’s Scott Austin contrasted the numbers in Demand’s filing with its executives’ numerous past descriptions of the company as profitable, as a reminder that “no one outside the company can verify a start-up’s financial claims.” Slate’s James Ledbetter also noticed an inexplicably large and sudden drop in Quantcast traffic to Demand’s sites a few weeks ago and wondered what was behind it. Meanwhile, the Journal also profiled Demand Media’s efforts to court big-time advertisers on the web.

A proposal to carve up the open web: A week after reports emerged that Google and Verizon were near a deal that would more or less mark the end of net neutrality, the two companies came forward this week not with a deal, but with a policy proposal. As for whether that would mark the end of net neutrality, well, it depends on who you ask. Google and Verizon called their plan a “proposal for an open Internet,” and their CEOs co-authored a Washington Post op-ed arguing that their proposal “empowers an informed consumer, ensures the robust growth of the open Internet and provides incentives to strengthen the networks that carry Internet traffic.” The proposal has quite a few moving parts, but it essentially prohibits Internet service providers from discriminating against or prioritizing “lawful Internet content,” while excepting wireless networks and some unspecified future services from that regulation.

The tech blog Engadget broke down the proposal, noting that would set something close to the status quo into formal policy, rendering the U.S. Federal Communications Commission powerless to change policy as the Internet changes. Most of the web was quite a bit harsher in its  judgment, calling it an open attack on net neutrality by excluding its fastest growing part, wireless. CNET and The New York Times put together good summaries of the backlash, but here are some of the most to-the-point examples: Free Press’ Craig Aaron (“one massive loophole that sets the stage for the corporate takeover of the Internet”), the Electronic Freedom Foundation (it limits net neutrality to “lawful” content, leaving “lawful” to be defined) Siva Vaidhyanathan (it gives Verizon control of the most exciting parts of the web) Public Knowledge’s John Bergmayer (it divides the Internet into several public and non-public parts) Ars Technica (its rules “will become meaningless as 4G sweeps the country”) Salon’s Dan Gillmor (“a Trojan Horse for a modern age”) Susan Crawford (future services is “a giant, enormous, science-fiction-quality loophole”) and Harvard professor Jonathan Zittrain (makes way for “an impenetrable web of contracts and fees”).

Noted Google watcher Jeff Jarvis had the most colorful response, illustrating the proposal’s potential danger to the open web by presenting a future scenario with two Internets, the old “Internet” with everything pre-2010 and the new “Schminternet,” with everything mobile and post-2010. “Mobile is the internet,” he wrote. “Mobile will very soon become a meaningless word when — well, if telcos allow it, that is — we are connected everywhere all the time.” Meanwhile, Wired gets credit for the most fun phrase — “carrier-humping, net neutrality surrender monkey” — in its explanation of how Google got to that point.

Google issued a response to the criticism on Thursday, arguing that it’s not actually leaving wireless networks free from net neutrality oversight, though GigaOM’s Stacey Higginbotham picked apart that defense, too.

Reading Roundup: A few final items to send you off for the weekend:

— Mashable’s Vadim Lavrusik has a smart overview of the shift toward personalized, socially driven news distribution, with a suggestion for a credibility and trust index to help sort through it all.

— Facebook has launched a media page and is pushing for more collaboration with media companies. PBS MediaShift’s Mark Glaser has an informative Q&A with Justin Osofsky, head of Facebook’s media partnership team.

— Google engineering intern Lyn Headley has written the first of a series of posts explaining the rationale behind his new Rapid News Awards. It’s a short, thoughtful take on aggregation, accountability and transparency.

— Finally, some (possibly) positive news: Spot.Us’ David Cohn takes a look at the data and notes that the wave of job cuts at America’s newspapers has largely subsided. Cohn wonders if it means newspapers are bouncing back, or if they’ve just cut down to the bone. I fear it’s more of the latter.

August 06 2010

11:15

Advertising Age: San Francisco Chronicle on using Demand Media content

Advertising Age interviews Michele Slack, vice president of digital media for SFGate.com, the website for the San Francisco Chronicle, which recently introduced content from Demand Media to its website. The interview looks at editorial outsourcing and issues of quality control:

Ad Age: Does bringing in outside content, supplied by freelancers, undermine the need for your own full-time reporters, or does it support the business that pays for the newsroom?

Ms. Slack: I prefer to think it’s the latter. This provides us with additional revenue opportunities that we can use to support our core newsroom. Our core newsroom is our competitive advantage, so we really depend on the content they provide us with. These partnerships are about bringing in additional users and incremental revenue. All of that is to support our core business and the newsroom is an integral part of that.

Full story on Advertising Age at this link…Similar Posts:



July 26 2010

17:54

Don't Blame the Content Farms

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From a business perspective, traditional journalism is rather inefficient.

Stories are chosen by a small group whose members often have similar experiences and outlooks. With little knowledge of true market demand, they assign the stories to a limited pool of writers and reporters who may not have the knowledge or contacts to quickly do a top-notch job. The stories are then produced and put out to consumers who may or may not like them. The process is repeated, daily or weekly or otherwise, often with little hard data on what, exactly, made a given story or feature popular.

But despite the inefficiencies, publishers have been able to survive, even thrive, because of other inefficiencies and barriers to competition, such as costly printing presses, advertisers with few other viable outlets and controlled distribution.

Enter the Internet. The "content farms" that MediaShft has focused on this week are exploiting new digital information technologies and systems to turn the model on its head, remove the friction caused by the inefficiencies, and reap the economic rewards. Rather than a small group of editors surmising what a community might want, algorithms from Demand Media, AOL and others process search queries and social media, glean what's wanted, then use other pieces of technology to calculate the likely value; they then quickly find writers or producers at a profitable price, assign and produce the content, attach money-making ads, and pay the "content creators" in a streamlined way.

Some in the industry may bemoan what's produced as "dreck," a term AllThingsD's Kara Swisher used while interviewing Demand CEO Richard Rosenblatt, but it does seem to satisfy a significant number of media consumers.

"Whenever you do stuff at scale and it's disruptive, people immediately think it's not good," Rosenblatt told Swisher, saying Demand produces some 6,000 pieces per day. "We're trying to prove that our content is good."

It's not as if the content farms invented the idea of producing work that's just good enough to sell. Just scan the racks at your local newsstand. As for complaints about the amount the content creators are paid, anyone producing the content is doing so voluntarily. By definition, they're being paid a market rate.

Not All Content Creators are Content Farms

Not every company trying new media business models can be put into one "content farm" bucket. Organizations like Politico, Patch and MainStreetConnect (a recent client of my company) are hiring reporters according to a more traditional model and focusing them by subject matter, geography, or both, while also using technology to keep costs down and drive new efficiencies that allow them to become, they hope, profitable with lower revenue than is required by traditional news organizations.

It's the classic case of a disrupted industry: The newcomers can do what's required to make a profit without having to support legacy processes responsible for a majority of current profits.

"It's hard to do something for future gain that is costly in present revenue and margin," publishing industry expert Mike Schatzkin told me in an interview. "If you don't have present revenue or margin, you have nothing to lose."

Writer James Fallows, in a recent Atlantic Monthly article, suggests that those bemoaning the fate of journalism might take a page from the engineers at Google, and instead try new processes, test and iterate, to discover how to derive enough revenue from what they make to sustain its production.

"Find out what [consumers] really want and value, and try to give them that, instead of what you've been making (which they may or may not want to buy, but which you've wanted to sell)," Alan Webber, who co-founded Fast Company magazine, told me in an email. "Find ways to cut costs. Find ways to cut waste. Find ways to test new ideas, new products and services faster, cheaper, and better."

That's more productive than fretting that the old ways of doing business are no longer working. And it sounds like what the content farms are doing.

Transformation of the Media Industry

About a century ago, as Americans were switching from horses-and-buggies and trains to cars, there were said to be more than a thousand companies producing automobiles in the United States. After a vigorous era of foment and entrepreneurialism, a handful survived, often incorporating the lessons learned from some of the other players that they bought out. Eventually, a thriving industry supplying millions and millions of consumers was born.

Entrepreneurial journalism -- an increasingly popular topic at journalism schools and institutes around the U.S. -- is just that, entrepreneurial. Amid the ordered disarray of startups and growth, different models are being tried. Some will succeed, and more will fail. New standards will be created.

Those upset that their skills can't get them more from the market might do well to bolster those skills. No longer is it enough to be able to report and write; hiring managers are looking for the ability to template, shoot, mic and perhaps even write a bit of code. If you don't know how to use Twitter these days, you're nowhere near the cutting edge.

Think of the power the new tools give journalists, including ones working for such venerated institutions as the New York Times, to reach beyond the confines of their publications and personally assemble communities of readers, viewers and participants around the journalism they create, while also developing leads and sources. That's more traffic for the publication, more influence and voice for the journalists. The tools also give people working for the content farms, also known as content mills, the ability to quickly get their work done and in some cases earn an hourly wage well beyond journalists' typical starting salaries.

"Yes, Demand Studios is a content mill. A new business model well adapted to the way consumers demand information. Get over it already," writes a commenter on a previous story in our series. "Why do I work for Demand Studios? The hourly pay is worth it and the independence fits my lifestyle."

A former managing editor at ABCNews.com and an MBA, Dorian Benkoil has devised and executed marketing and sales strategies for MediaShift. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, retaining and monetizing audiences. He tweets at @dbenk.

This is a summary. Visit our site for the full post ».

July 23 2010

23:05

4 Minute Roundup: The Problem with Content Farms

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4MR is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at Learn.News21.com.

In this week's 4MR podcast I give an overview of "content farms," sites such as those from Demand Media, Yahoo's Associated Content and AOL Seed that produce massive amounts of content for low pay. While there have been issues with the quality of content from these sites, they often provide "good enough" how-to information for people searching for it online. Blogger/journalist Jason Fry has been a critic of content farms in the past, but now takes a more nuanced view of them, saying he's more worried about how they affect readers and searchers than the journalism business.

Check it out:

4mrbareaudio72310.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Listen to my entire interview with Jason Fry:

fry full.mp3

Background music is "What the World Needs" by the The Ukelele Hipster Kings via PodSafe Music Network.

Here are some links to related sites and stories mentioned in the podcast:

Writers Explain What It's Like Toiling on the Content Farms at MediaShift

Your Guide to Next Generation 'Content Farms' at MediaShift

Beyond Content Farms series at MediaShift

Hey, Demand Media! Get Off My Lawn! at Reinventing the Newsroom

Comment by Demand Media writer about getting $100 per day at MediaShift

The 'Craigslist Effect' Spreads to Content as Free Work Fills Supply at AdAge


Content 'Farms' - Killing Journalism, While Making a Killing at The Wrap

Also, be sure to vote in our poll about what you think about content farms:




What do you think about "content farms"?Market Research

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

news21 small.jpg

4MR is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at Learn.News21.com.

This is a summary. Visit our site for the full post ».

July 22 2010

17:37

How Content Farms Train Their Writers to Write for the Web

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Education content on MediaShift is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at Learn.News21.com.

At the core of every content farm's success is an ability to rapidly recruit and integrate new writers. Publishers like Demand Media, Examiner.com, Suite 101 and others are always hiring, always looking to expand their ranks and replace talent that churns out.

These operations rely on abundance: of contributors, of content, of traffic. More contributors means more content, which means more traffic -- but the constant influx of new people means their product could vary widely in terms of the quality of writing, and the ability of the writers to promote their work and drive traffic, among other key factors.

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Examiner.com has proven adept at bringing new writers into the fold. The site, which is in 250 cities in Canada and the U.S., has over 42,000 "Examiners" -- what the site calls its writers -- and is adding over 3,500 new ones each month. (Read our post from earlier this week to get an overview of what Examiner.com does.)

That's a huge amount of people to integrate, especially considering the fact that Examiners range from experienced writers to relative newbies who may have an area of interest but no writing experience. In other cases, an experienced writer may have little or no knowledge about search engine optimization and the best ways to promote their work online. Examiner.com deals with this by offering a variety of training and support resources to get people producing quickly, and within a set of guidelines.

Forums, Guides, Feedback

Sites such as Associated Content and Demand offer discussion forums where writers can exchange information and search for previously answered questions. They also provide access to editors or support staff. For its copy editors, Demand offers "forums, blogs, newsletters and other channels for you to communicate with and learn from your fellow editors." These editors, in turn, help ensure that all written materials adhere to the very specific guidelines established for each Demand property or client.

Suite101 offers a range of resources, including text-based tutorials, on-on-one coaching, and discussion forums. "We have created concise tutorials to help writers better understand how to implement white hat SEO strategies and to better understand the overall process of web writing," said Lima Al-Azzeh, the site's associate editor.

Examiner.com offers support services and discussion forms, but it has also been aggressive, and unique, in creating online, self-directed interactive tutorials. The site has created Examiner University, a standalone section of its site that offers Flash-based classes and other forms of training content that help get Examiners up to speed.

Inside Examiner U

Jason Stone joined Examiner.com six months after the site's April 2008 launch. Initially hired to be a channel manager overseeing writers in a specific topic area, he soon found himself spending time helping his Examiners understand search engine optimization, video embedding, social media and other necessary skills and tools.

"I would write emails to Examiners and it eventually occurred to me that I was spending a lot of time addressing the same issues over and over," Stone said. "I thought that there had to be a more efficient way to do this. So I started making documents and videos and distributing them to Examiners."

His training materials caught on and he was soon asked to take on this work as a full-time job. The result is Examiner University. Part of the core curriculum of Examiner University are its "101"-level courses that offer instruction in four key areas.

"Early on we decided there would be four pillars of types of courses which will be reflected in 101 courses: editorial; marketing to a growing audience; technical skills, because publishing online means putting tools in the writers' hands; and then information that is specific to Examiner.com, such as how our referral program works," Stone said. "If any one of those -- especially the first three -- fail then it's an overall failure."

There are currently 25 courses offered on the site, and the company expects to launch more after a new version of the Exmainer.com website goes live soon. (Examiner University is also home to a video guide to the new website.) The core courses are delivered using a combination of audio, video and text. Other course topics include "grammar considerations," "plagiarism," "finding photos online," "proofreading," "writing locally," and "SEO considerations," to name just a few. The "finding photos" and "writing locally" courses are among the most popular.

examinerlocalcourse.jpg

"Obviously, we have varying degrees of skill sets coming in the door," says Justin Jimenez, Examiner.com's director of marketing and PR. "A seasoned journalist might come in and skip over the editorial section but could be very interested in the marketing and social media component. The large value for us is continuing to enhance that quality and have offerings for different levels of skill sets."

Overall, executives at Examiner.com feel the courses are working, even though the company isn't permitted to require its writers to attend Examiner U. (Examiners are independent contractors and not employees, so the company can't tmake Examiner University a requirement.)

"Measuring success is kind of difficult in that it's not easy to quantify the effect that the courses are having," Stone said. "We look at the metrics and we now average about 4,000 course launches per week, and that number keeps going up."

Stone added that the average Examiner spends roughly seven or eight minutes per course. Though many courses are longer than that, each lesson includes a table of contents that enables people to skip to the parts they find most useful.

Feedback From Examiners

I spoke with a few current Examiners to see what they had to say about both Examiner University and their fellow Examiners. Here's a selection of their responses:

Sharon K. West, current Haunted Places Examiner and American History Examiner and a former writer for Suite101.com and Associated Content:

I've gone completely through the Examiner University, twice. I wanted to make sure that I understood their policies and how to upload articles and pictures.

I was also searching for information on current styles. During the time that I wrote for Suite101.com, the new style of Internet writing started coming into play. Things like SEO, keywords, and putting the most important points at the beginning of the article, rather than the old style of gradually working up to the mighty conclusion at the end. In some cases, in the old way, you told people what you wanted to tell them and then told them at the end what you already told them. Everything has changed for the Internet.

I made it a point to go through Examiner University before I did anything else, and in the process, it finally clicked in my head how to write in chunks, start out with the important things, and get those keywords in lots of times, as well as using headings and lists inside the article.

Brad Sylvester, current Manchester Bird Watching Examiner, Maritime Headlines Examiner, and Manchester Green Living Examiner; a corporate writer and a former writer for Associated Content:

Generally, when I ran into problems I'd go to their site and see the tutorial. As far as the 101s, I did go through all of those maybe two months in to see if there was a better way of doing things.

The most helpful were the ones that walked me through their publishing tool and told you what to expect and how it works. Also, there is a community where you can talk with other Examiners and I found that to be helpful as well. People would share best practices.

There are two camps [of Examiners]. There are some that are very experienced and some that have no experience -- and almost nobody in between.

Angele Sionna, current Early Childhood Parenting Examiner and Western U.S. Travel Examiner; contributor to eHow; former television news producer and a professional journalist for more than 15 years:

Initially, there was a feeling of a "workplace" and you got to "know" co-workers, most of whom were other professional journalists who write for a bunch of media...like myself. They used Examiner.com to write about their passions, whereas at some other jobs they'd write on other topics. I'm much the same way. Many of those journalists are still with Examiner like I am... but unfortunately there are also people with Examiner who really don't know how to write or even what to write about. They've tried to crack down on people who would report things just from other sites just to get page views. I was glad to see that, but some of those folks with no original content are still around and that part is frustrating to me...Though I have seen articles from people that do not have a journalistic background that are very well done, well researched and enjoyable to read. So it is really a mixed bag.

You know, I haven't checked what their current class offerings are lately, as previously I felt there wasn't anything of real benefit for me at the Examiner University. That's fine with me though. It is good they have tools for people who may be experienced writers or experts that need more help figuring out the ways of the web. Not everyone feels comfortable with the web or knows how it works.

To read more stories in the Beyond Content Farms series go here.

Craig Silverman is an award-winning journalist and author, and the managing editor of MediaShift and Idea Lab. He is founder and editor of Regret the Error, the author of Regret the Error: How Media Mistakes Pollute the Press and Imperil Free Speech, and a weekly columnist for Columbia Journalism Review. He also serves as digital journalism director of OpenFile, a new collaborative news site for Canada. Follow him on Twitter at @CraigSilverman.

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Education content on MediaShift is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at Learn.News21.com.

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July 21 2010

19:22

How to Gauge Success Using New Metrics

Last week, I met with two people from a non-profit in Phoenix that looks at progressive policies to balance economic development with the environment. Land use and livable communities are two of their key talking points, so it seems logical that they should be aware of a service that encourages and enables people to use light rail to get around the inner city, right? For those unaware, that describes our Knight Foundation-funded project, CityCircles.

As we discussed CityCircles during the meeting, the inevitable question arose: How much traffic are you getting?

The answer, in all honesty, is not much at the moment.

But "hits" -- or page views, or unique visits, or whatever traditional web metric you choose to use here -- is not what we're looking for at CityCircles.

Our project is less about "how many" people are using the service and more about "how" people are using it: How they are interacting with it, with each other, and with the light rail community at-large as a result of our existence. I bring this up because it will inevitably be part of any early discussion you may have about your own startup.

The Battle For the Top of Search Results

Your answer will obviously be critical to how the project is perceived. For us, we do our best to follow how web usage is developing as new startups go live. One particularly interesting development is the mile-wide content creators like Demand Media, Associated Content and other related sites. (See the ongoing feature on these kind of content farms being published this week at MediaShift.)

In general, these companies pay writers of a general skill level to write about almost every topic under the sun for an extremely, ahem, modest fee. They are essentially choosing quantity over quality as their business model. (However, that is in the eye of the beholder, as any piece of content is capable of being high-quality to a particular user if it's exactly what they're looking for at exactly the right time. It just tends to be something that won't win any major journalism accolades.)

A really great story on this topic -- with a really great volley of thoughtful comments -- came out earlier this month on The Wrap.

There's a lot there to contemplate, but what I prefer to ponder is a post written by FoundingDulcinea's Mark Moran in December 2009.

He argues -- successfully, in my mind -- that sites like Associated Content and others will, over time, kill search engines' usefulness (if the search companies don't address this issue). The deluge of content from thousands of writers on multiple topics will come to dominate the top search rankings, thus diminishing the utility each user gets from that search. As some have noted, certain searches require you to wade through posts to get to the deeper results on a topic you are interested in, and this equates to being invisible in search because few users click past the first page or two of search results.

Metrics to Consider

Why do I bring this up for potential startups?

The impact these sort of sites can have may force you to re-think your own metrics. If page views work for you (and you should think beyond that), then that's great. Just remember to follow developments that impact search engines, because that is where validation for your project will come from as you talk to potential stakeholders.

If you'd like to consider other options, here are a few metrics we are tracking under our grant:

  • Number of registered users
  • Number of posts
  • Number of comments on those posts
  • Number of community improvement projects completed
  • Most frequently visited landing pages for light rail stops
  • Length of time spent on our mobile website (train schedules)
  • Interviews with users at our light rail events (anecdotal stories about light rail use)
  • Number and type of merchants participating in our light rail events

Food for thought -- especially at a time when startups have to score millions of page views to attract a whiff of advertising money, if that's your business model. Our model is based on a deeper experience of use, not just information consumption.

Start thinking ahead to answer that inevitable question.

16:05

Writers Explain What It's Like Toiling on the Content Farm

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"We are going to be the largest net hirer of journalists in the world next year," AOL's media and studios division president David Yun said last month in an interview with Michael Learmonth of Ad Age. Yun suggested that AOL could double its existing stable of 500 full-time editorial staffers in addition to expanding its network of 40,000 freelance contributors. Many of the jobs will be added to its hyper-local venture, Patch, while the majority of AOL's freelancers will work for the company's content farms -- Seed and the recently acquired video production operation, Studio One.

These two areas into which AOL is ambitiously expanding are the fastest growing sectors of the journalism market. Hyper-local networks like Outside.in and content farms such as Demand Media are flourishing. As Yun's bold prediction indicates, more and more journalists will end up working for new online content producers. What will these new gigs be like? To better understand, I reached out to people who have already worked with some of the big players.

Life of a 'Content Creator'

"A lot of my friends did it and we had a lot of fun with it," said one graduate of a top journalism graduate program when asked about her work for Demand Media. "We just made fun of whatever we wrote."

The former "content creator" -- that's what Demand CEO Richard Rosenblatt calls his freelance contributors -- asked to be identified only as a working journalist for fear of "embarrassing" her current employer with her content farm-hand past. She began working for Demand in 2008, a year after graduating with honors from a prestigious journalism program. It was simply a way for her to make some easy money. In addition to working as a barista and freelance journalist, she wrote two or three posts a week for Demand on "anything that I could remotely punch out quickly."

The articles she wrote -- all of which were selected from an algorithmically generated list -- included How to Wear a Sweater Vest" and How to Massage a Dog That Is Emotionally Stressed," even though she would never willingly don a sweater vest and has never owned a dog.

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"I was completely aware that I was writing crap," she said. "I was like, 'I hope to God people don't read my advice on how to make gin at home because they'll probably poison themselves.'

"Never trust anything you read on eHow.com," she said, referring to one of Demand Media's high-traffic websites, on which most of her clips appeared.

Although chief revenue officer Joanne Bradford has touted Demand's ability to give freelancers a byline and get their pieces published to "a great place on the web," the successful writers I interviewed made great efforts to conceal their identities while working for the content farm.

The prospect of seeing their names in the travel section of USAToday.com or the small business page of the Houston Chronicle's website -- two newspaper sites where Demand now contributes content -- did not interest them. The working journalist who previously wrote for Demand is only listed as "an eHow Contributing Writer" on her pieces while Christopher, another Demand freelancer I spoke with who asked to only be identified by his first name, chooses to write under a pen name.

(Note: MediaShift tried multiple times to get Demand Media to talk to us on the record for this series, but they declined, saying they were not doing media interviews due to competitive reasons.)

Churning it Out

Like the working journalist, Christopher cited Demand's compensation as his primary reason for working with the company. For the past two years he has written for the company to supplement the salary he earns as an adjunct professor at a mid-sized Midwestern university. Although Demand pays only a meager $15 or so per piece, by choosing easy prompts and writing them up very quickly, Christopher managed to collect a tidy sum for his time and effort. Christopher forces himself to pump out a minimum of three per hour for three hours a day. "For me it's always the hourly rate," he said. "I won't [write for Demand] if I feel I can make money doing something else."

Christopher has tried other content farms but keeps coming back to Demand Studios. Lured by higher per-article pay rates from AOL's Seed, he wrote three pieces, only one of which was published. Unlike at Demand or Yahoo's Associated Content, which pays as little as $0.05 a piece, Seed freelancers cannot claim a given topic. So even though this actual story request for a thousand word piece on post-traumatic stress disorder among doctors and nurses in the military might earn a freelance journalist $205, they could also earn absolutely nothing for their labor.

Seed of Hope?

As Yolander Prinzel of the blog All Freelance Writing explained, to freelance for Seed, you must create "content on spec, without any real direction and cross your fingers hoping you didn't just waste your time ... You and goodness knows how many other writers all rush to find that magical, mystical voice that will satisfy the faceless editors."

Unable to determine what had caused Seed to buy one of his pieces for $30 and reject the other two without any substantial feedback, Christopher told me he "just said screw it. It's so random."

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Other AOL contributors have had better luck with Seed. Since February, Megan Cottrell has been a regular contributor to Wallet Pop, a consumer finance site owned by AOL.

Although Cottrell uses the Seed system to post and edit stories, her clips owe less to a mastery of SEO alchemy than to old fashioned networking: She began working with Seed after she met one of Wallet Pop's editors.

"I haven't done Seed the way it's set up [to work for most writers]," she told me. "I've pitched stories to [the Wallet Pop blog] Money College and had stories assigned to me."

Although Cottrell's experience is likely very different from that of most Seed freelancers, AOL's use of her writing is indicative of how the company aims to leverage the work produced from the content farm. A story she wrote about student loan debt was featured in the slidebar at the top of AOL's home page. Homegrown content from Seed can be featured or linked to on multiple platforms, all of which can earn the company valuable page views and the corresponding ad dollars.

According to a MediaShift interview with Brian Farnham, the editor-in-chief of AOL's hyper-local venture Patch, using content from Seed "is something we're testing and exploring, to exploit if we can, and enhance the local professionally done journalism that we're doing."

In an upcoming story this week, I will take a look at what it's like to work at Patch, as well as other hyper-local ventures.

*****

Have you worked for a content farm? Would you consider doing so? Share your thoughts in the comments below.

To read more stories in the Beyond Content Farms series go here.

MediaShift Editorial Intern Davis Shaver contributed to this article.

Corbin Hiar is the DC-based editorial assistant at MediaShift. He is a regular contributor to More Intelligent Life, an online arts and culture publication of the Economist Group, and has also written about environmental issues on Economist.com and the website of The New Republic. Before Corbin moved to the Capital to join the Ben Bagdikian Fellowship Program at Mother Jones, he worked a web internship at The Nation in New York City. Follow him on Twitter @CorbinHiar.

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