Demand Media IPO Valued Higher Than The NYT

Here’s why we care

Demand Media’s stock made a grand entrance on Wall Street on Wednesday, jumping 37 percent on its first day of trading, paidContent reports. Within hours, a piece on had noted that Demand’s valuation by investors—$1.5 billion, with a “b”—was higher than The New York Times Company. The horror!

So why should we care about a “content farm” that produces riotously bad content for depressingly low rates and whose business model depends solely on optimizing the Google-searchability of its crappy headlines? It’s not like it’s journalism, right?

Maybe not. But we should definitely care, as both writers and readers, about a company that works every day to lower the standards of online content, that devalues the skills of reporting and writing, and that removes any incentive for original thought in exchange for quantity and speed.

In the December issue of Harper’s Magazine, Thomas Frank wrote a column called “Bright, Frenetic Mills” bemoaning the rise of the “Hamster Wheel” media mentality and what he sees as the slow death of quality journalism. To Frank, Demand Media is a prime example of the decline of the industry. He describes how the company pays no attention to quality; its “editorial direction,” such as it is, is defined only by the algorithms that indicate what people are searching for on Google at a given time and what content advertisers might want to place ads next to. He continues:

According to Demand’s manifesto—yes, they have a manifesto—all this is merely “listening to the customer,” an “incredibly liberating” development that “guides” not only the “content we create” but “the communities we nurture.” Its competitor, Associated Content, actually calls itself “The People’s Media Company”; on the occasion of its purchase by Yahoo!, Associated’s founder claimed he had in mind “a democratization of content.”

Of course, the real source of the mills’ magic would have been familiar in the nineteenth century: an inventive way to minimize labor costs. The content-mill is like a temp agency for writers, a literary maquiladora. It automates not some part of the creative act but rather the context in which it takes place: it deprofessionalizes journalism.

The essay is scathing, and it ends strong:

Let the line grow long at the factory gate. Let the hamsters compete to make the wheel spin, cranking out their $15 stories and tweeting their little tweets while the Republic goes to hell. And by all means let the professors teach the wonders of “entrepreneurship.” We all know what answer lies at the end of that line of inquiry: The only real solution to the hamster-wheel problem is to be the guy who owns the pet store.

The Letters to the Editor in the February issue of Harper’s includes a response from Catie Watson of Huntington Beach, California, who began writing for Associated Content and Demand Media two years ago. Watson writes, in part:

Frank sounds a bit like Chicken Little in his claim that these “content mills” are posing a threat to the future of professional newsgathering organizations. Although the sky may be falling for print journalism as we know it, the more likely causes include cable news, Wikipedia, YouTube, and a public that’s less interested in reading. The content mills are looking for articles that might show up in the lifestyle sections of newspapers, “evergreen” content that is just the opposite of the news and opinion pieces that journalists are trained to produce. The articles I wrote for Demand Media—for instance, “The History of Garden Gnomes” and “How to Use a Flat Curling Iron”—hardly threaten the livelihood of a professional journalist.

Watson is correct that the types of pieces she writes for Demand are not the types of pieces that journalists are trained to produce. But she is wrong to say that, for that reason, we should not be worried. Frank notes in a footnote to his essay that USA Today’s website “has outsourced the writing of certain travel features (“Family Road Trip Planning”) to Demand and its army of freelancers,” and it isn’t the only one. The race to the bottom—in both price and in quality—is getting faster.

Silly as Watson’s particular examples may be, “evergreen” content in the lifestyle section do matter, both to the profession and to news readers. A newspaper doesn’t just reflect a community’s interests and values, it shapes them; every section contributes to that process. The more newspapers outsource the job to national companies, the less connected those papers are to the communities they serve. And devaluing the profession of writing with hastily-produced content-for-clicks doesn’t serve anyone, except for the content mill’s bottom line.

Demand Media and its ilk can’t be the default solution to the problem of shrinking newsroom budgets—a problem that isn’t going away any time soon. If we’re not careful, we’ll all start to expect less: not just of what we read, but of what we write, and how we as writers are rewarded for it.

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Lauren Kirchner is a freelance writer covering digital security for CJR. Find her on Twitter at @lkirchner Tags: , ,