Inside Demand Media’s Content Machine

A look inside Demand Media’s automated content machine.

Ever since Demand Media launched, a lot of people have wondered how it actually makes money (other than through its eNom division). A reader just sent a fascinating article to me from Wired that explains its content machine and money making ability: using algorithms and a freelance army to churn out vast, but low quality content.

It works a lot like how domainers decide which domains to develop and how to outsource content writing for minisites. But it does it on a much, much bigger scale and automatically.

First, an algorithm determines which phrases and answers people on the internet are seeking using data from ISPs, search engines, etc. It then calculates the lifetime value of creating a content page (often counting text and video) for that query. If it makes economic sense, that query is then queued up for an army of freelancers to write text, film a video, create a headline, copyedit, and fact check. Think of it as Amazon’s mTurk but just for Demand Media.

The content is then syndicated through YouTube and Demand Media’s own network of sites, such as eHow. Demand cashes in on the ads it shows alongside the content.

Quality is not a concern. One videographer has produced 40,000 short videos. As he describes in the article, it’s regarding volume. He gets paid regarding $20 a video. That doesn’t leave time for producing compelling content and its matching professionalism.

By next summer, Demand expects to produce one million items a month.

This all makes me wonder if it’s a house of cards. We’ve all seen business models based on producing low quality content, content spinning, and other schemes that ultimately don’t deliver the requisite value to viewers. They ultimately fail.

If nothing else, the article answers my question, “how come when go to eHow I leave not getting the detailed answer I was looking for?”