Wednesday, November 10, 2010

In Demand

A week inside the future of journalism

By Nicholas Spangler

I spent eight years at The Miami Herald, mainly writing features, and when the paper laid me off in 2009, I was humiliated and sad. But people told me getting laid off could be a good thing and I listened to them. “Invent” and “take charge” and “define” are some of the words I remember from those conversations, which left me, in hindsight, manically deluded about my prospects.

I moved to New York, where I’d always wanted to live. I thought I would polish off a few story ideas and a friend’s idea for a screenplay I’d been toying with (it featured, unwisely, a terminally blocked romance novelist); then, after a suitable period, reinvented and redefined and fully in charge, I would find another job as a reporter.

But the screenplay foundered. The story ideas turned out to be not very good and I could not think of new ones. The well was dry. So I started looking for a job, at first confining my search to New York and Washington. There were reporting jobs of a peculiar sort in these cities, and my cover letters included lines like, “My knowledge of the nuclear power industry is admittedly scant” and “Although I speak no Japanese, I know New York City intimately.”

For a long time I did not come close to any job, and then I found Demand Media, which ran help-wanted ads on and Demand’s own site featured a picture of a laptop on a table in front of a beachfront tiki bar. Sometimes instead there was a picture of a good-looking woman sitting with her laptop in a comfortable chair. She looked happy. She was beaming. I wanted to look like that.

Demand, which launched in 2006, doesn’t do news, which is expensive to produce and perishable. It does “commercial content.” If you’ve watched a how-to video on YouTube or read an instructional article on the web, you’ve probably consumed Demand content. More than 2 million pieces were online by mid-summer, with more than 5,000 new ones appearing every day. In September, Demand attracted nearly 59 million unique visitors, according to comScore, the Internet marketing research firm (, by comparison, the nation’s top newspaper site, had 33 million), to its company-owned websites like eHow and Livestrong, and more to its 350 client sites, which incorporate some of Demand’s content. Among Demand’s clients are websites operated by USA Today, The Atlanta Journal-Constitution, the San Francisco Chronicle, and the Houston Chronicle.

Demand and its competitors—there are several, including AOL’s Seed and Yahoo’s Associated Content—rely on algorithms and search data to determine what content consumers are seeking, what content advertisers are willing to pay for, and what content can be profitably produced. There are no news meetings. There are no newsrooms. The editorial workforce is freelance, compensated by the piece, at a rate that varies but is never far from skimpy.

Demand and the specter it represents—what Clay Shirky calls the radical “commodification” of content, without regard to civic value or subjective judgments about quality or any of the other sentimental trappings of the Murrow century—have inspired loathing and awe, but mostly loathing, in the class of people that pays attention to such things. Which is to say, mainly journalists and those who love them. “We’ve got former members writing this stuff,” says Bernie Lunzer, of The Newspaper Guild. “Some are just glad to have work. They’re becoming just a raw commodity bought at the cheapest price and that, essentially, is what Demand stands for. It spells the end of what we consider journalism.”

Or take Ken Doctor, former newspaperman turned news futurist and author of the book Newsonomics: “This is the logical extension of a long-time strategy to eke out profits by squeezing labor and overhead costs.”

Most news organizations already use search-engine-optimization strategies to push their content on the web. Within five years, says Doctor, SEO and advanced metrics will play a prominent role in decisions about what to cover and how heavily to cover it, with reporters and stories graded by the number and value of the consumers they attract. “It’s a box that, once you look inside, you can’t not look,” Doctor says.

One possible consequence of looking in the box is that news organizations will increasingly turn to companies like Demand for their evergreen content. Quality may suffer, at least initially, but the money news organizations save could be redirected to actual newsgathering, benefiting not just readers but the commonweal. If, in the future, consumers demand higher-quality content from the evergreen material, wages may stabilize for the para-professional workforce producing it, as Demand and others compete for a limited number of skilled content producers.

Or not. Doctor envisions not so much a race to the bottom as a race to mediocrity, the “good-enough” that is all consumers may really want, which would mean the end of most quality journalism and the end of journalism as a middle-class profession.

In August, Demand filed with the Securities and Exchange Commission for an initial public stock offering that could value the company at $1.5 billion. Forty-five percent of the company’s $198.5 million in revenue in 2009 came from a domain-registry service that is the world’s second-largest, with more than 10 million names. Besides the cash it throws off, the registry is a valuable source of information on people’s search habits, and a list of potential outlets for Demand content. The other part of that $198.5 million, the part everyone talks about, came mostly in pennies and fractions of pennies earned on video and search advertising.

For most of its brief existence, Demand has been a money-loser, and it finished 2009 with a $22 million loss. But its sec filing contains numbers that would make newspaper executives salivate: every dollar spent on written content in 2008’s third quarter, for instance, is projected to return $1.58.


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