Content Mill Founder Quits — Will Freelance Writers Follow?

Carol Tice

A content mill founder heads off into the sunsetAre content mills going the way of the dinosaurs? There’s a lot of talk that one of the biggest and most successful mills, Demand Studios, may be slowly winding down.

Kicking off the most recent speculation about Demand’s fate is the fact that Richard Rosenblatt — founder and CEO of Demand parent company Demand Media — resigned abruptly last week.

If you write for mills, it may be hard to find a few spare minutes to learn about the behind-the-scenes business moves of one of the leading mills. But my advice is to pay attention.

Because Demand Studios is in trouble. And as goes Demand, so goes the rest of the content mills, including any other mills that you might write for.

Inside a content mill’s disintegration

Rosenblatt’s resignation seemed to take the company by surprise — they’ve hastily appointed a temporary CEO from the executive ranks while they do a search. Which indicates he likely up and left, rather than being forced out. Instigators of a coup would have had a new leader ready to go.

So Rosenblatt has bailed. He’s on a beach with the millions he made in Demand’s $77 million initial public offering (IPO) back in early 2011.

It’s no big mystery why he’d want to move on. Since going public, Demand’s stock has gone nowhere but down, in tandem with the sinking fortunes of its content-mill business, which includes eHow. Traffic at its sites began to sink soon after the IPO, as Google implemented a series of changes aimed at blocking junk-content, SEO-focused sites like Demand’s.

Why should you care if investors are abandoning Demand’s stock? They’re doing that because the mill business model doesn’t work anymore, so they don’t believe the company’s stock will increase in value in future. Lower stock prices mean Demand is worth less and can’t borrow as much money — and likely, that means less available mill work for writers.

Stuffing tons of SEO articles onto a website and making affiliate ad cash off the viewers you drew was a business model that seemed to have great promise, for a brief time around 2009-10. Then Google got wise to how junk-content sites were ruining the usefulness of its search results, and took evasive action.

Now, this business model doesn’t work anymore, and it will never work again. Traffic will continue to sink at mill sites as search engines roll out initiatives to screen them out of results.

Internet users are increasingly hip to avoiding junk-site links they see in search, too. After you read five different eHow posts and none of them clearly or accurately explain how to do the thing you searched about (like I have), you don’t come back.

Demand has responded to its shrinking mill audience by diversifying into other business types. It’s bought e-commerce marketplace Society6 and online-learning site CreativeBug.

They’re taking their IPO money and using it to buy into other businesses that work. They’re not using their cash to expand their content mill empire, because the sun is setting on it.

Follow the money…

Demand Studios has never been a big moneymaker — all the profit was always in the domain-name side of the business. Despite the pittance they paid writers, Demand could never figure out how to make a profit off your back.

In the most recent quarter, they squeaked out just over $1 million in profit on $97 million in revenue. They could get a better profit margin running a grocery store, which is one of the most notoriously low-margin sectors in all of retailing.

Pretty sad for a company that once boasted it would be bigger than the New York Times (and whose stock value, briefly, was larger than the venerable daily).

The company said that despite Rosenblatt’s departure, it is moving forward to split eNom off of its content-farm business and sell it off separately. Why? Because eNom is a valuable, profitable business. Being shackled to a content mill is dragging down its value.

Once eNom is spun out on its own, what will happen to the content farm side? My money is on its getting sold off for a pittance, scaled back dramatically, or shut down.

A key indicator: This week Demand laid off its entire research and development unit. Translation: there are no new twists or products or ideas coming down the pike to save the content mill.

Other surviving mass-content sites are casting about for new business models that might be profitable. A notable example is About.com, where the model is shifting to sponsorship as executives scramble for income.

What’s your game plan?

Given the declining fortunes of content mills, the question is — what will mill writers do?

Here’s hoping you’ll follow the CEO of Demand out the content-mill door. And not to sign up with some other content mill. (Though most other mills are privately held, it’s safe to assume their fortunes are in similar decline.)

If you rely on content mills for revenue, know that this is a shrinking opportunity built on shifting sands. Yes, new mills spring up all the time, but few achieve critical mass and survive. You can expect fewer mill assignments and less pay in the future. Debating whether mill X is better for writers than mill Y, or complaining about mill pay rates is a waste of your time.

Mills were never meant to be anyone’s full-time income, a fact mill owners were always the first to admit. If you’ve made the mistake of counting on them to pay your bills, now’s the time to change course and start marketing your writing to find your own clients.

Do you think content mills will survive? Leave a comment and share your reaction to Demand’s decline.

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93 Comments

  1. Debra McDougal

    Now I know why the pay at a content mill I won’t name is lower than ever! I’ve been away from writing articles for about a year and decided to get back in the game by starting again at this particular content mill. I was appalled at the pay and the reduced number of articles available. Guess I’ll hit up old clients to get started again. Thanks for the really great article.

    • Carol Tice

      I expect to see opportunities and rates at mills continue to shrink. There just isn’t any revenue in what they were doing. Funnily enough, just before seeing your comment I got an email notice that Demand Studios’ stock has hit an all-time low. Investors understand that this is a dying business model.

  2. Diane Kamer

    I just happened on this article, and I find it fascinating.

    For the past 14-plus years, I’ve been a full-time on-staff e-commerce copywriter at HanesBrands Inc. (yes, the underwear people). I used to write HanesBrands’ ChampionUSA.com website; now I work on their JustMySize.com site. (But a lot of the copy there was written by my predecessor…I haven’t been on the JMS team all that long.)

    I’m in my early 60s and planning to retire within a couple of years. But I wanted to keep my hand in, since I don’t think I could stand just gardening and volunteering when I retire. I’ve noticed that Panda and Hummingbird have spurred a lot of e-commerce companies to add content (especially blogs), so I thought perhaps I should build a little portfolio of articles via freelancing for Demand Studios. That way, I’d be ready to transition to content writing in retirement.

    But there is no way I’d ever be willing to write for $2. And I would never want to write keyword-stuffed JUNK anyway. I’d heard that content mills were horrible, but, for some reason, I vainly imagined that the Google updates were forcing them to get better. Talk about naive!

    So glad I read this article. Now I know to steer clear of these guys.

    Guess I’ll just focus on lobbying for a blog at JustMySize.com. And maybe gardening’s not all that bad anyway. 😀

    • Carol Tice

      As a longtime copywriter, Diane, you ought to be able to find great freelance clients — the only choices aren’t content mills or talking one site you like that doesn’t have a blog into having one (which we find has low success). You’ve been working for a big-name company! Lots of smaller businesses in apparel would probably love to have you.

  3. Deb

    As a writer for Demand Media, I can verify that conditions have definitely worsened in the last couple of years. Demand Media Studios (DMS) saw a major layoff known as “First Look” about 2 years ago that effectively shrunk the writer/editor work force by what seemed like at least half its writers — maybe more — while pretending to implement a content improvement program after the Google slam.

    What it came down to was a withdrawal of all available writing assignments for several months, then a gradual re-introduction of assignments visible only to those writers who steadily maintained a 4 or above on their writer’s “scorecard”. Those of us who made that cut got a “first look” at whatever came down the pipe, and the opportunity to grab a few pitiful titles before the unwashed masses with scores below the optimum were allowed a peek. Of course, with a few hundred writers scrabbling to grab half a hundred titles, the lesser beings were pretty much s**t-out-of-luck and finally dropped off for lack of work. DMS is cowardly and cruel. It would have been more professional to send pink slips.

    After dropping that excess weight, DMS began hyping its new and improved image to those of us who managed to hang on. Part of the “improvement” was taking away ALL our writing privileges and making everyone re-apply for each section that we wanted to write for (pets, gardening, science, legal, home decor, health, and so on). Many people with hundreds of articles under their belt in specific areas were told their qualifications weren’t good enough any more. More people dropped out for lack of work. (DMS cruelty is at least consistent.)

    Again, I managed to hang on — as did a couple hundred others. (That is a guess, by the way. I have no idea how many writers actually work for DMS — they are not known for sharing.) However, the articles we used to see in the tens of thousands, numbered only in the hundreds — most unwritable for one reason or another.

    Time has passed. It is now early 2014 and the article numbers are up to a few thousand (depending upon which venues an individual writer is privileged to be accepted for). Articles pay an average $25 each — which was one of the small (very small) real improvements after the shake up, BUT…

    Now there do not seem to be any editors. We write and then we wait.. and wait… and wait…

    The articles sit sometimes for two weeks or more before being picked up by an editor, then get thrown back at us for rewrite about 50% of the time. (Prior to this year, my rewrite percentage was around 8%.) After doing an edit, I often wait another week for acceptance. This from a company that used to edit and accept articles within 2 days regularly.

    Now (as of 25 February 2014) payments — which used to be as regular as clockwork — arrive so late in the evenings that many people don’t get them until what is for all practical purposes, the next day. This has happened 3 weeks in a row, so far. In fact, I am currently awaiting another late paycheck. This would not be particularly worrisome except that reliable, twice weekly pay was one of the few things DMS had going for it.

    Bottom line… I am worried I may soon be out of a job. Since this is one of the few gigs I can fit into a hectic schedule (I have a small farm with a lot of animals) I will need to scramble for other writing jobs to make ends meet.

    One little point I would like to mention in defense of DMS, is that despite the “content mill” reputation, they have never actually expected or asked writers to stuff keywords into their articles — or anything close to that. In fact, editors actually discourage overuse of specific words — sending back rewrite requests for repetitious phrasing or for using the same “action” word in subsequent steps for how-to articles. (For example, if I begin one step with something like “Cut the fabric in half…” and need to have readers cut the subsequent half in half again, I would need to say something like… “Divide each of the remaining fabric pieces in half…” in order to avoid repetition of the word “cut”.)

    Most of the writers still working with DMS are not novice writers, and the content, while not ideal, is not as bad as portrayed here. Much of what IS bad owes its faults to the restrictive nature of DMS guidelines rather than to the writers, themselves.

    • Carol Tice

      Thanks for the update on how Demand is evolving — and continuing to try to stay alive.

      As it happens, they just released public disclosures around spinning off their domain-name side of the business, which shows traffic at eHow and other sites they own continues to plummet — it’s less than half what it once was. Can’t be good news for writers.

      Once they spin off the cash cow of domain name registration, it’s unclear what will happen to the content half that remains. It has diminishing returns due to the traffic shrink, and they have to spend a lot on it. I wouldn’t be surprised to see it fade away or be acquired…and then fade away.

      When you say “I may soon be out of a job” — this was never a job. Jobs have benefits, and a guarantee of X amount of income.

      It was one freelance client. Never have only one freelance client…hope you don’t have to find out the hard way why that’s a bad idea.

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