By Evan Leatherwood and Eric Hurtig
As print media moves to e-publishing, publishers are still unsure of how radically readers’ needs and preferences will continue to shift.
Demand Media, which launched its IPO last month to much fanfare, seems a good indicator of how to make money off of free informational content online while catering to readers’ habits. Demand’s business model engages readers by writing answers to exactly what they’re looking for. For example, if one hundred thousand people are shown to be searching for information on how to care for a bonsai tree, Demand will write an article on it. This is a surefire way to bring readers answers they’re looking for.
Pundits have latched onto Demand’s IPO (in which purchase of common stock valued the company at $1.5 billion, $0.4 billion more than the New York Times’ similar valuation in November 2010) as sign of the new media’s victory over the old. If the Times makes less than a five year-old ‘content farm’, then the game is up for legacy media, or so the argument goes. But anybody who thinks newspapers and content farms are in the same business is either a journalist looking for an easy lede, or has never actually been to a content farm’s site.
The question remains: what are the real stakes in the success or failure of content farms?
It can’t be the battle for journalistic supremacy. As of this writing, a search on Ask.com for the question “What is going on in Egypt?” links first to the Huffington Post, then to ads for Egyptian tourism, then to a brief, anemic comment thread by Ask.com users, and finally to a long list of established news outlets. It should be obvious that “amybug25” or “liloldfanny” at Ask.com aren’t going to parse international politics for us. For that, we still trust news organizations like the New York Times, so we shouldn’t be worried about Demand style content taking over the news media landscape.
If not newspapers, what’s the right legacy media analogue for content farms? Before the internet, people went to books and specialty magazines for information on how to fertilize your lawn, stitch a Halloween costume, collect beanie babies, or get a discount on a cruise. This is the territory that content farms could someday take over from print media, but by any comparison they aren’t even close to doing it yet. Demand, which produces the internet’s biggest content farms, hasn’t outmoded comparable brands like Health or House Beautiful Magazines (which respectively saw 16 and 20.6 percent increased in their single copy magazine sales in the second half of 2010) or one of the ultimate publications in legacy media, Reader’s Digest, which was taken private in 2008 for a purchase price of 2.8 billion.
The thing to pay attention to is Demand’s business model, which plugs new values into the old publishing equation, and may present a new paradigm for publishing. Instead of custom market research, they have Google analytics. Instead of print advertising and subscription by mail, they need only the Google search portal to target their potential readers. For content, they still hire writers and editors. Demand’s sites are a publishing imprint and can’t be compared to news organizations. Whether they or somebody like them becomes as trusted as the Farmer’s Almanac is not something any pundit can reliably predict.