Demand Media’s Unique Publishing Model: Curated Social Content (CSC)

Left: I met much of the founding team of Demand Media last week in SF at the Web 2.0 expo.

A few days ago, I had lunch with Richard Rosenblat, CEO of 2.5 year old Demand Media (who recently purchased Pluck) to learn about his unique business model which sits in between self-publishing and mainstream media. This company has been pretty tight lipped but after Richard’s presentation at Web 2.0 Expo and an interview with Kara Swisher, he was interested in briefing an analyst. If you’re familiar with the long tail concept you’d be aware of the large head, long tail –and fat neck. Overused metaphors, but visually it helps to explain this concept.

[Successful media websites are fueled by fresh quality content –yet the cost of rapidly creating content requires talent, staff, and resources]

Currently, there are two predominant publishing models on the web:

1) Enterprise Generated Media
Mainstream media publishing existing content (TV, Newspaper, Magazine) or spending quite a bit of resources or high quality created content like Funny or Die. This content is easy to spot, it’s highly refined, quality is often high, and is expensive to create.
Content: Refined
Cost: Expensive
Model: Broadcast, Large Head

2) Consumer Generated media
The second model is everyone who is self-publishing from their own blogs, websites, podcasts and videos, they’ll often create their own content, find advertising revenue opportunities and may band together forming blog networks like B5, Glam, BlogHer, and Federated Media.
Content: Varies, but can be low
Cost: Inexpensive
Model: Social, Long Tail

Now, a third model is appearing that blends both styles
The third model, which we’re just starting to see is a hybrid of both models, which we will call Curated Social Content (CSC).
Content: Varies, semi-professional
Cost: Moderate
Model: Curated by third party, big neck.

3) Curated Social Content (CSC)
This model is unique as it scoops up the best of CGM and serves it up to EGM sites who need it. Here’s how Demand Media is doing it:

  • 1) SCC company finds EGM “passion verticals” where there’s a strong desire for content –but they don’t have resources to create it all. For example: Lance Armstrong wants to launch a health site.
  • 2) The CSC company issues a request for consumer experts to write articles, they get paid (Richard of Demand Media told me it often starts at $15) in which they buy and own the content. For Example: Demand asks Health experts to submit articles, a team of editors will determine which article will get paid.
  • 3) Content is posted on the EGM site and attracts visitors, as well as boost SEO. Advertising generates revenue. For Example: Lance’s health site will have a regular influx of new content from industry experts, content hungry people will visit the site, and then interact
  • 4) Both parties have revenue share from advertisements and the CSC company, like Demand Media, takes a cut. For example: Lance’s health site will generate clicks through advertisements (or other revenue opportunities) as new members are attracted to the site.

    • [Content-starved mainstream media websites can now outsource to third-party content curators –who will crowdsource, and revenue share with content creators ]

    Impacts to mainstream media sites: In times of economic downturn this could be a model that purchases media on demand for a large base of creators, content that is often customized. This could reduce the full-time staff at a publishing company. The upside is the increased content created by the crowd, yet reducing the risk of unqualified content. The risk? Media companies still need a strategy, editorial guidance and need to ensure quality and consistent content is provided to the site.

    Impacts to content creators: If you’re an expert at a topic and already blog about a topic, now there’s an opportunity to get compensated for it. This plays to the future of ‘everyone can be a freelancer’ using the distributed web. The risk? While your content will now be featured on mainstream sites, the content is now legally owned by Demand Media, you don’t have direct ownership of the content. Also, not everyone will be able to be a publisher, as you have to demonstrate expertise in your arena. This seems competitive to companies like Wikia, Mahalo, and other curated website content, as well as blog networks I mentioned earlier like B5, Federated Media, and others.

    Talk Back:

  • Is this a viable content strategy for mainstream media companies?
  • Will community experts embrace this way of monetizing their knowledge?
  • During an economic downturn will this be a cost effective way for both publisher and creator to generate revenues?

    • 41 Replies to “Demand Media’s Unique Publishing Model: Curated Social Content (CSC)”

    2. This is an exciting model for Demand Media to pursue, but the concept of aggregating CGM is not new. Lots of sites, like DrudgeReport.com, aggregate both EGM and CGM and have done so for a long time, especially as it relates to niche verticals (i.e., politics). Newspaper websites are increasingly promoting CGM as part of their content.

      It seems that Demand Media fills a great spot by actually paying for CGM, something most sites are unwilling to do. Hopefully it’s a model that will work.

    3. A_F,

      It’s not syndication as we know it.

      The content is being CUSTOM created for the mainstream media site.

      The middle group (curator) purchases the content and then licenses it.

      Also, the consumers get a cut of the revenue share.

      Syndication as we know it today doesn’t scrape out the low quality content, this is a cost effective way to outsource semi-pro or pro content.

    4. I understand your points, I just do not agree that there is anything new here. What you refer to as “Custom”, and cutting out low quality content is no different then how large syndicators currently work.

      Look at King features (in broadcast) as an example. If I am a TV or Cable station, I might want to only license Spongebob Squarepants, and not Oprah… I am able to CHOOSE exactly what I want to syndicate.

      Perhaps what is new here is that it is now available to anyone, not just mainstream media. Even that however is not unique. I get approached at least once a week to write (and syndicate) the content of my blog, or SME to various sites.

      I am not suggesting that Demand Media does not have a home run…just I am not getting what is so revolutionary with their model

    5. Andrew

      It’s more akin to outsourcing the content creation (journalists, videographers) than it is just syndicating existing content.

      If this model was applied to you, you would submit your content to Demand Media, if they accepted, they would buy it from you.

      Therefore, it’s not re-syndicating content that’s on your blog.

      I agree, we’re already seeing elements of this model appear elsewhere, but we have to agree, this isn’t a model that’s fully been adopted by both media companies and content experts.

    8. In parts it does sound a lot like what traditional print media has been doing – most content in magazines and newspapers are not written by employees but by selected freelancers.

      It also sounds a lot what the syndicated content providers have been doing.

      There’s another model as well, Editorialised consumer generated media – ugc filtered (and organised and tagged) by an editorial team or domain expert.

      I think a mix of commissioned content and editorialised ugc could be the best model for content quality. Whether that translates in success is another matter.

    9. Jeremiah,

      I see your attempt to differentiate traditional “content syndication” and CSC. CSC can only stand on its own if the passion vertical you mentioned have a clear editorial plan that communicates to their “outsourced” content providers. In this case, Demand Media acts as the middle man to match their network of content providers to passion verticals.

      Unless there’s a some form of “content supply chain” where Demand Media can interface with passion verticals and content providers, I see no value from Demand Media over what traditional content syndication providers can provide to such sites.

      The key here is the dynamic and relevant content updates which Demand Media can provide that differentiates itself in the market. I don’t see that clearly defined in this entry, though they may be holding back information from the public.

      Darren

    10. I like the term curated. I use it a lot when referring to what a social media participant does when they filter through monitoring results.

      In music, for example, I don’t want to know what people think is popular. I want the playlists from the people I think have good taste in music.

    11. If Demand Media owns the content are they responsible for its veracity? Do they then hire a large staff to police and edit the content before it is published? is this a mere shift of resources from the EGC to CSC? What happens in cases where reporters won’t reveal sources? Will Demand Media defend them as the NYT has done or is that the responsibility of the “creator”?

    13. joelle nebbe-mornod

      Yup, I’m aware of freelance journalists submitting stories into newspapers and networks.

      Important: The difference here is that the people writing the content in CSC are truly the experts –vs just reporting on it.

    14. Darren

      The need for editors is only increased with this model, agreed.

      Justin, to Darren’s point we’re going to need the need of a strategic editorial eye from the EGM as well as allowing the readers to vote on what they want.

      Heather, As I understand it, Demand does have an editorial board that approves content before it’s shared with EGM. These other questions which you raise, (all valid) need to be answered by Demand themselves.

      I’m sure Demand will come by and answer some of them here in the comments.

    15. Jeremiah,

      Thanks for the opportunity (and prompt) to respond. This is Jeremy Reed. I head up the Content & Editorial group for Demand Media. And, it looks like I left San Francisco just before that photo was taken.

      Demand has always been about not just creating more and more user-generated content. But, that there is an real audience and need for useful and directed content that is vetted with editorial standards. We™ve definitely seen this in the growth of our properties like LIVESTRONG.com, Trails.com and eHow.com, where we™ve applied this approach. Here™s how we are tackling it. (BTW, I like the phrase you’ve used “ ˜Curated Social Content™ “ to describe what we are trying to do.)

      We have an editorial board and process. My background “ as well as the other members of the in-house editorial team“ is rooted in traditional media in city newspapers, general interest magazines and trade publications. We are taking the principles of traditional media™s approach to quality and pairing it with an open community of high-quality content creators. We are qualifying and categorizing creators (e.g. people with proven experience in copyediting in the health category). Once a writer, filmmaker, transcriptionist, etc. is qualified (and as long as they remain highly rated by their peers in the community), they can grab work in areas that interest them. They work at their own pace, and from wherever they want.

      As freelancer for many years , I spent a lot of my time going back and forth with editors, publications and such for the opportunity to publish. And, I didn’t get paid for all that time I spent. We wanted to take the hassle out of publishing “ whether it be videos or articles “ and give the talented folks in our community a ˜no-hassle™ opportunity to create, publish and get feedback on their work.

      I hope this helps answer some of your questions. Please let me know if you have other questions. What we™ve created at Demand Studios “ and yes, I will be the first to admit we have some kinks to work out — is based on what freelancers know all too well. Freelancers want a fair opportunity to get paid, have their work seen by a large audience and become more knowledgeable and better at their craft.

      Best,
      Jeremy

    17. Jeremiah,

      Great post. Frequent reader, first time poster.
      I wanted to give you a heads up on our site which attempts the business model you mention above.

      We recently launched a new social video network for audio creatives (producers, audio engineers…) called WinkSound.com

      In 2009 we are debuting our original production which has all the benchmarks of “type 1” (high quality, polished, and expensive) called “In The Studio” which is a show that features the latest in production software, hardware, and technique.

      We are also inviting audio creatives to publish their own videos while aggregating videos from all over the web. (youtube etc) “type 2”

      This creates the kind of community which you describe above as “Curated Social Content”

      We aim to sift and sort through the thousands of videos out there featuring people in the home or traditional studio sharing production techniques, which in todays world of digital technology change constantly and don’t adhere to a specific set of “rules”

      We will also feature text tutorials, blogs and news.
      All curated and organized into a collection of playlists, pages and profiles.

      As I mentioned above, we only recently launched (we are in alpha now), but hope to see this business model grow.

      Thanks for the great post. and keep up the great writing.
      Rick

    18. Jeremiah, on this one I have to agree with Andrew Finkle. I just don’t see how this is different from how offline media companies pull their content together (especially for feature articles) with freelancers. Demand Media is creating or servicing focused/niche content/community verticals that have need for specialized content; soliciting and identifying credible “experts” in that vertical; and serving up the “expert content” to the vertical. This provides both a revenue stream for the vertical and a source of differentiated content (since the pieces are original and won’t [theoretically] be reused on another vertical).

      Terrific, and I get the model, but it’s not really “curated.” I would consider curated to be more in the Alltop model where “expert” blogs are identified for verticals and that content is passed through to the user. Or where user contributions are made to a site and the most credible/well written/valuable pieces of content are identified by an editorial team and featured and the author(s) compensated. This feels more like an (hopefully) efficient marketplace for outsourcing original content creation.

    19. great post and discussion. i tend to agree with Mark and Darren that this really isn’t that “new” from an end user persepctive. I rather look at it as the natural evolution of two existing models nether of which is working in the short term (EGM is expensive, slow and is quicly out of touch, and in UGC signal-noise ratio is still too high). As others point out, I see Demand as closer to EGM, and have yet to see a really good example of crowd-sourced or algorithmic curating/monetization, but maybe i’m missing something?

    21. This curated content model sounds familiar…

      I think this approach has a lot of merit.

      As the use of social media matures, it seems only nature that “produced content” would become the social object for people to interact around. This extends the notion of social networking from just connecting people-to-people, to creating social affinities where people can interact with and around the content they love.

      It would require a different world view, but I don’t see why media companies couldn’t start developing these sorts of communities themselves. Thoughts?

      Thanks for sharing.

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    24. Fascinating. What’s fascinating is just how not new this is. Others have already either outright said this or alluded to it. While it looks like they’re giving this model a good go at it and I wish them well with it, calling it new or even spinning it as new based on some minor differences with what’s been done before is really splitting hairs.

      The main twist here seems to be providing a marketplace for specific content in particular areas, which looks kind of like some writing requests you might find on Elance or that various companies have hawked at SES shows over the years. (Though the SES content spam/scam garbage is of course not the kind of quality Jeremy and Co. intend to produce.)

      All that being said, if these guys build a better marketplace for these buyers and sellers, that may be ‘slightly more’ unique, provide value and be a great business. Again, I wish them success with it. It may be a good idea who’s time has come and there may be enough of a market for a successful business. But the fundamental model doesn’t seem that groundbreaking. And if it gets any traction at all, I wonder how quickly existing media players with deep editorial staff and waning print profits will jump in. (But I suppose that makes them a good acquisition candidate for some old media co.!)

      Scott

    25. Interesting strategy…I’m impressed with what the guys at Demand have done in general. They took essentially a dead brand in Cracked and built a strong audience for it, kind of reinventing the brand in the process.

    26. One question — why would a company use their syndicated content unless they have no where to start. In other words, is it cheaper to put money into hiring folks to jump start content vs. sharing the ad revenue. Are there other successes out there that are trying to do this. About.com was mentioned. The NYTimes is not leveragin that asset at all (if they still own it) Or is that asset just too old (web) school.

    29. You mention this will “boost seo” however on Pluck’s site in their FAQ sections it clearly states:

      “Will Pluck On Demand help or hurt my search engine results (aka SEO)?

      Since Pluck On Demand widgets are JavaScript-based, including them on your website will not affect your search engine results. Search engines do not generally see content created by JavaScript widgets.”

    31. Wow. I’d been trying to figure out what was behind this sea change in search results. I guess this is it.

      I see DM owns registrat Enom, and Enom owns a vast number of websites — ones Google and Yahoo find with every search — showing nothing but snippets and ads, and that those ads are very profitable ones.

      It’s like building big potholes on the highway and selling advertising around them that people will have to see while fixing their flat tires.

      Take good information, chop it up into little chunks that will attract search engines, pad it with advertising.

      Make sure there are lots of copies of it all over the web.

      Keep it free of citations to sources so people keep coming back to the little idiot ‘answerbag’ type pages for more.

      Blame the ‘writers’ for the plagiarism and stripping of actual useful references.

      Great model. You can strip mine effectively in cyberspace.

      And invented a way for Google to find evil irresistable, if they’re selling the ads on the pothole pages.

    32. It seems to me that they still run into the same Ad Revenue challenge (declining CPMs) that the SNS model is encountering. The difference to me is that Demand Media is paying for content in an attempt to monetize it – whereas Social Media sites are getting that content for free (in an attempt to monetize it).

      It could be argued that the quality of the content is higher b/c of the nature of their ‘passion verticals’ – but as a consumer – my attention span would be less likely to notice the adverts and just want to get to the video (even if they are pre roll adverts – which it appears they are from viewing some of the videos).

      So now they’re paying decent fees for quality content and then sharing any generated revenue – in a world of decreasing returns.

      Jeremy, any insight into the advertising performance of a model like this?

      Bill

    33. I’m interested in learning how well the practice of corporate media sharecropping will sit with today’s bloggers/field experts and creators of original content. The pending embrace of this practice by UGC contributors may mark another pivotal turning point for publishing as an industry.

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      Mă numesc Magyara Rudolf Leonard, am 24 de ani şi bani prea puţini pentru a-mi permite medicamentele necesare tratării afecţiunilor de care sufăr. Nu am pe nimeni, am crescut, de la un an, în mai multe case de copii din Sibiu, iar de la 18 ani sunt pe drumuri. Acum dorm la un adăpost de noapte din Sibiu şi nu pot munci pentru că medicii mi-au interzis efortul fizic. Sufăr de ciroză hepatică, ulcer, leucemie şi scolioză toracică şi am nevoie, lunar, de medicamente în valoare de aproape cinci milioane de lei pentru a putea urma tratamentul prescris de medici. Mă adresez oamenilor cu suflet şi credinţă în Dumnezeu să mă ajute pentru a putea continua acest tratament. Cei care doresc, mă pot ajuta cu mici donaţii în contul deschis la BCR :
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    41. Pingback: Happy Anniversary to Demand Media “ Has It Really Been 3 Years? | Demand Media

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