Demand Media, AOL’s Seed and Spring Break for the Internet (SXSW) Day Two

Personal updates and takes on SXSW at the bottom.

As many know I used to be a tech/media reporter. If I were reporting at SXSW the media story would certainly be AOL’s Seed. TechCrunch nailed the story already, so in true blogger fashion I am going to opine below. I am also going to roughly quote some of the folks I spoke with about the subject over the course of the day – but will not attribute these quotes. Our conversations were between colleagues and I don’t want to compromise anyone. I’ll email these individuals and update the post if they are comfortable with attribution.

A lot can be said about AOL’s Seed and Demand Media. They are often referred to as “content farms.” I am not sure if that is accurate and I can be a stickler about labels – but I’ll use that for now, as I lack a better term.  Some have even pointed to them as a battle for the Internet’s soul – no small wager.

I’ll try and start on a positive note – where I think these huge mega-companies share something with Spot.Us.

One inspiration for Spot.Us is to modernize the freelance process. It is horribly antiquated. Fifty years ago freelancers would type out their pitches and send them snail mail to editors and wait for a snail mail response. Today we email our pitches. But other than the medium of our communication – nothing has changed. The process is still very much one-to-one. It is not transparent and the dirty truth of freelancing is that you need to have a relationship with the editor. They are in charge. Spot.Us tries to make that process more transparent and have a one-to-many communication prospect.

I can see where Demand Media and Seed are rolling up their sleeves to modernize freelancing (from the perspective of a mulit-million dollar publisher). Spot.Us is trying to do this from the perspective of the freelancer. I often joke that we are the mom-pop version of Demand Media. Instead of algorithm ordering content, we let people custom order content which will be hand-crafted.

The obvious downside of course is that they pay is tough for content producers.

One individual (Cody Brown) I spoke with asked a very poignant question: If Jimmy Wales were announce that Wikipedia was going to start paying editors $7 an hour wages or something close to it – it would ruin the whole system. If Demand Media and Seed want to become huge “content farms” answering everyone’s potential questions – maybe throwing meaningless amounts of money isn’t the way.

His companion noted that when Wikipedia first started out as Nupedia Jimmy Wales did pay exert editors. According to her over the course of three years those editors only produced 25 articles. If Wales hadn’t pivoted Wikipedia (then called Nupedia) would have failed.

I’ve also experienced this. In the beginning of Spot.Us we started paying the peer review editors 10% of the money raised. We ended up attracting people that were motivated by money. But since it wasn’t that much money – they weren’t that motivated. Since making the peer review editor role volunteer, I’ve found the volunteers are much more involved.

Lesson: You get what you pay for. The follow up question is whether or not people care asked by Robert Hernandez. Since the majority of content from Demand Media and AOL Seed is going to be about “cupcakes and butterflies” as he put it, maybe it doesn’t matter what quality the writing is.

The counterpoint: Another colleague whose opinion I hold in very high regard noted that the real danger is that Google could lose value. If Demand Media continues to put out the amount of content they do – but it’s at a mediocre level, and this content is in direct response to Google queries – the search engine could rapidly lose value.

Which raises the question: Would Google do something to demote Demand Media Content? Would that be an “evil” act? It would certainly be one where the search giant would integrate human judgment into its search returns over its own algorithm which would otherwise be gamed to ensure Demand Media content to be at the top.

My general impression, which was confirmed by others, is that of these two Demand Media is the “clockwork orange.” Its insides are all mechanics. They make no attempt to hide it. They use an algorithem to determine what content they’ll produce and from there its a mechanistic system to produce the content. The humans are only involved out of necessity. Even the Matrix needed humans as batteries. AOL’s Seed isn’t guilt free of this – but it appears to make more of an attempt to include human judgment and editorial. The hiring of Saul Hansell, among other decisions, are obvious examples.

The final thought.

What Demand Media and Seed are doing isn’t necessarily journalism. This is especially true for Demand Media. What they produce is content. Plain and simple. The majority of it being answers to mundane questions “How do I tie a square knot?”

In this respect – individual journalists don’t need to be concerned about the exploitation of writers (although – the writes opt-in so exploitation itself is arguable). Most reporters I meet aren’t in the business of answering search engine queries. Nobody’s lunch is being eaten.

But – at a deeper level the journalism INDUSTRY should be very concerned. What this represents is yet another HUGE opening in the content/media space online that is being overtaken by venture capital money and brand new companies. A Gannet, Hearst, etc, should be in this space.

Why does it matter what kind of company owns this space?

Simple: Old profits from classifieds and advertising used to be pumped back into the system to prop original reporting because that was something newspapers did. Newspapers were always really in the advertising classifies business – but they would use their 30% profit margins on reporting.

If Demand Media starts making 30% profit margins, I don’t suspect they’ll start throwing that into investigative or original reporting. That’s not what they do. AOL’s Seed might – but that’s a hope, not a promise.

People love to point at Craigslist and blame it for the fall of newspapers. Aside from being economically questionable I often point out that the technology behind Craigslist wasn’t mind-blowing. Any newspaper company could have built that and today would own the classifieds business online. And who knows what they’d do with that profit? Fund some great reporting I suspect (and kudos to Craig Newmark who with his wealth has created the Craigslist Foundation).

With great power and money comes great responsibility. I’ll even give Demand Media and AOL the benefit of the doubt and say they’ll make charitable contributions to society with any new-found wealth. But will journalism be where they plant their flag? That’s a missed opportunity for newspaper companies.

Now for the personal updates

Before I dive into the subject of this post: AOL’s Seed and Demand Media, a personal update.

1. My SXSW talk yesterday went great. It was followed by a round table discussion which was a bit more contentious. The founder of Gothamist was of the opinion that community funded reporting can’t work. My response: Then NPR never should be alerted immediately. What we do is similar to NPR except we add transparency and control for where the contributions go. To say “it doesn’t work” when what I think he really means is “it won’t replace advertising” is lazy thinking.

2. A personal highlight: If we are in The Reformation of media then I often refer to Clay Shirky as our Martin Luther. While at AOL Seed’s party Clay walked up. I was ready to introduce myself. I had met him before, but he is the caliber of person for whom I would fully understand needing to introduce myself again. I am deeply humbled that he is familiar with me and my work. I often say that I am on the front lines of a battlefield. I’ve chosen my specific battleground, but the war is much larger. If that is the case – Shirky is a General.