By Peter Sweeney (@petersweeney)
Beginning last year, Michael Arrington and many others identified content farms as the great disruptor, an innovation that will eventually eclipse traditional and social media. With their vast pools of cheap distributed labor, farms would glut the market with low quality content, overwhelming older approaches.
Demand Media is the lightning rod for content farming. But with the information disclosed in their recent IPO filing, it’s clear that content farms are not the great disruptive innovation that people fear.
Figure 1: Demand Media is the lightning rod for content farming
(Image source: Demand Media)
To declare an innovation truly disruptive, it needs to embody some rare qualities. High on the list are productivity and cost advantages. Disruptive innovations bring massive improvements in productivity. The cost advantages allow the innovation to permeate to entirely new markets and usage scenarios, profoundly shaking the incumbents and delighting new customers.
Content farms don’t exhibit these productivity advantages. Demand Media, purportedly among the most sophisticated farms in terms of their operational processes, are reporting underwhelming results. While farms are automating aspects of the content manufacturing process, they remain labor intensive, hand rolled operations. When compared against older models, farms are not demonstrating the productivity advantages that would be needed to qualify as a disruptive innovation.
Figure 2: Content farms employ large numbers of writers, often freelancers, to create content
(Image source: Flickr, http://www.flickr.com/photos/bcostin/366629702)
Another crucial aspect of disruptive innovations is the element of surprise. Disruptive innovations are disruptive because incumbents often deny or ignore them until it’s too late. These innovations challenge our fundamental assumptions about what’s possible. As such, it’s difficult for those outside the innovators’ circle to appreciate the impact.
Consider social media, exhibited in projects like Wikipedia, as truly disruptive. When Wikipedia began, even those close to the project didn’t think it was possible to build a world class encyclopedia through a massive collaboration of strangers and amateurs. It was only through these types of grand experiments that the disruptive implications of Web 2.0 and social media became widely understood.
Again, content farms fail to exhibit this quality of disruptive innovation. Even in the earliest days, few were denying that content farming is possible. When you parse the attributes of content farms, they are understood by all as incremental innovations. Their main differentiation is in the commercial aspects: applying distributed and collaborative approaches to content manufacturing is old news; marrying those aspects to a sophisticated commercial enterprise is the incremental innovation.
Demand Media may disagree. In their SEC filing, Demand describes their differentiation as follows:
While traditional media companies create content based on anticipated consumer interest, we create content that responds to actual consumer demand. Our approach is driven by consumers’ desire to search for and discover increasingly specific information across the Internet. By listening to consumers, we are able to create and deliver accurate and precise content that fulfills their needs.
A fine purpose, but again, on closer examination, it’s hardly disruptive. The difference between anticipated consumer interest and actual consumer demand even sounds incremental, graduating along the same axis of consumer demand. There’s certainly no aspect of fundamentally challenging our assumptions of what’s possible. Publishers have been eking out incremental improvements in market segmentation forever. Even the specific approaches of Demand Media are exhibited across the activities of domainers and arbitrageurs, even reverse engineered in the patents of the most powerful search company in the world.
Content farms like Demand Media are important. They’ve demonstrated the scale under which social media projects can be conducted as commercial publishing ventures. They’re important, but in a very incremental way. Unlike truly disruptive innovations, they won’t put content industries on a new growth trajectory.
None of this is to suggest that the content industries should rest easy. There’s certainly a fundamental disruption in content on the horizon, but you won’t find it on the farm. Rather, the magnitude of productivity advantages and assumption-challenging capabilities needed are found only in factories, in far more industrialized and automated approaches. And although most will deny or ignore their presence until it’s too late, content factories will make farming seem quaint in comparison.
We’ll look at content factories in more detail in a future post. Follow us on Twitter or subscribe to our RSS feed.
Figure 3: Content factories create machines that automate content manufacturing
(Image source: Primal, http://about.primal.com/2009/11/are-web-factories-stealing-your-job/)
