In Content Business, Nothing Good Actually Scales (And That's A Good Thing)

Three recent storylines should serve as a reminder that nine women can't have a baby in one month.  Creating a sustainable content business that is profitable and viable is hard work, takes a long time, and absolutely nothing can change that.  If you can't handle that fact, you shouldn't try to fake it in this business, especially with how the Web empowers both the Millennial generation and Baby Boomers to spot a phony a mile away.

Story 1: Scaling Inventory Doesn't Work, Facebook announced that it was delaying the release of auto-play video ads.  The official story is that Facebook is concerned with how auto-play ads -- albeit mute -- will affect the user experience.  At a time when kids are running away from Facebook, that's a wise move. 

While auto-play video are more rich-media banners than true pre-roll inventory, the reality is that, combined with Facebook's personalization and user data, one could see how marketers would embrace it nonetheless.  But the point is, Facebook needs to develop a "real video" strategy and not this faux-video hack, and props to Mark Zuckerberg and his brain trust for realizing that scaling inventory for the sake of scaling it won't work in the long run.

Story 2: Scaling Production. Demand Media co-founder, Chairman and CEO Richard Rosenblatt is out, leaving the company that became the poster child for content farms (fairly/unfairly, rightly/wrongly).  The company used the proceeds of its domain registrar to venture into the content business, first via low-cost SEO-friendly content monetized by AdSense, and then via an attempt at vertical properties like or before foraying one last hurrah in branded content after recruiting Joanne Bradford away from Microsoft.  I guess it was inevitable for Rosenblatt to leave, especially with the stock down from its $17 IPO price to less than $10.

While it was really easy to kick Demand Media when it was up, let alone now when it's down, the truth is its approach was innovative, it paid a revenue stream for a battalion of writers. And while its downfall was obvious and inevitable to anyone with a background (and a clue) in the media business, you have to give it credit for trying.  I suspect an investor will come along and carve out the domain business, with the remaining content business having to fly or die. 

Either way, it's a reminder that you can "scale" production of bad content, but good content that appeals to advertisers and audiences isn't a slam-dunk.

Story 3: Scaling Audience. Spin Media -- formerly known as BuzzMedia  -- is now on its third CEO in less than a year.  After Stephen Hansen replaced founder Tyler Goldman, former Ziff-Davis executive Dale Strang replaced Hansen this past month. 

(Full disclosure: Strang was a VP at IGN when it bought my old company AskMen, and my current company WatchMojo has an old business partnership deal in place with SpinMedia, but let's just say I have a bigger active relationship with Kate Upton than SpinMedia these days).

The board and Strang proceeded to make some "structural changes," which basically meant layoffs and cutting off some owned-and-operated sites and spinning them out as independent ad network properties. 

To be fair, SpinMedia deserves a lot of credit for scaling its audience, fast, by combining a wide array of websites through acquisition, investment and representation.  But, high comScore/Nielsen numbers might get marketers' attention, but it takes far more to retain it.  While some of its properties probably had decent engagement, its lack of video offerings probably set the company back years.

All overnight successes are years in the making.  You can hatch a get-rich-quick scheme on the Internet more easily than anywhere else, but only when the tide goes down can you see who is swimming naked.

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2 comments about "In Content Business, Nothing Good Actually Scales (And That's A Good Thing)".
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  1. Bob Gordon from The Auto Channel, October 29, 2013 at 12:36 p.m.

    The Auto Channel was the first commercial web site to use video that was over 18 years ago and we are still trying to figure out how to make money with video...until an advertiser is willing and able to pay a fair price for each view (not the pennies they are paying now on a CPM basis) making money on video will be limited to the aggregators like You Tube who have no production expenses... after 20 years on line and 25 years before that in TV I just don't get the economics of producing TV for the web.

  2. Mike Einstein from the Brothers Einstein, November 1, 2013 at 10:23 a.m.

    Ash, You have one line here about Facebook that speaks volumes about the true definition of reach: "...that scaling inventory for the sake of scaling it won't work in the long run." This distinction between scaling the supply (ad inventory) and scaling the demand (content) is the entire reason why ads don't and can't work online. The ersatz reach ascribed to Facebook has the rest of you in a pissing contest that anyone with programming costs can't possibly hope to win. Speaking of which, you're way too kind to Demand Media. Their share price went below $5 the other day, and no one answers their phone when you call.

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