In magazine publishing, for example, writers look at their pay as a per-word rate. The idea is that the total amount one receives for an article cannot objectively be considered large or small — it is subjective to the amount of work (words written) that is produced. Similarly, if the $10 million paid out went to 100 content creators, that’s not bad. If it went to 10,000, that’s much less promising.

a) identify content areas we think will be in demand
b) bring in talent to create the media
c) spend a lot of money distributing and marketing it

Demand Studios represents an example of a more efficient new model

a) automatically identify areas of real immediate demand
b) efficiently allocate talent and production resources to create media to fill this demand
c) automatically distribute to the sites where the demand exists

On the internet you can’t spend enough money on distribution and marketing to drive demand for something you are guessing people will watch. There are too many options for people to choose from.

It’s easy to see which model will survive. Spot the internet video company who’s not laying off (or still paying for) talent right now?

Plus quality matters. Why? because a better, higher quality show is simply a click away and viewing is immediately measurable. The audience will decide the quality, not the producer/studio.

The market will set the price directly against quality produced by the talent. Talent that performs well will be able to set higher fees. If Demand wants higher quality, they will have to pay more.

It’s a shame Demand’s platform is still studio-like however, effectively providing financing, and choosing who produces what content. Acting as a middle-man means controlling information on the two sides of the market, which is not good.

I feel they are missing a trick.

Demand should disintermediate themselves. How about reversing the market?

a) automatically identify areas of real immediate demand
b) auction off these areas to the highest bidder with a minimum level of quality. YES, the talent pays for the rights
c) talent creates the media, controls the story
d) the platform automatically distributes the media to places where demand exists
e) everyone shares in the revenue

It’s more scalable as it’s driven directly by the people that can supply the media and talent is incentivised to produce something compelling and of high quality. And the talent is paid based on performance.

In fact, the idea is so good, I’m going to start it up! :-)

Then studio factories developed where quantity of interesting films was the goal. It looks like with the success of businesses like Demand Media, that we’re in the media factory period.

The next film period saw story quality, artistry, the star system and dominance of the Film industry over other media (1920′s).

As you can see on the Demand Studios landing page (www.demandstudios.com), this month, we surpassed $10 million dollars in payouts to our community of writers and filmmakers (At this time and in this economy that’s an impressive number for a 2 ½ year company paying for made-for-the-internet content that has value). We were able to do this – and will continue to do this – because as you mentioned in your article, we really do understand distribution. Also, we paid out more than $10 million dollars because without our quality creators – we’ve learned faster than many publishing outlets, the value this group and their talents bring and without them none of us would have success. And they’ve told us daily, “keep giving us steady work that pays and provides place to publish.” And, that is exactly what we plan to do!

Just for perspective on the folks at Demand Media who are working with Steven Kydd to make Demand Studios a success, Jeremy Reed our VP of Content and Editorial spent his 20s doing freelance assignments. At that time, he had more than 500 published print articles with a handful of publications – many of them just simply to get experience and a byline so that he could make a name for himself – and not with any hope of being paid. He wanted distribution and exposure. He wanted to be a better writer. And for him to publish 500 articles in multiple publications and get coaching from editors meant that he had to hustle, hustle, hustle, even if that meant doing everything from bartending to a crappy holiday party sales job to writing a newsletter/answering phones for a major sausage company – all just to pay rent and make the ultimate sacrifice for his craft that was also his passion. This is a very typical of the average person who wants to break into writing that we’ve heard from the community. (The same could be said for filmmaking, copy editing, etc….)

Demand Studios speaks to what motivates every freelancer creator: 1) steady, reliable work 2) massive audience to see my work and 3) coaching/community to become a better writer, filmmaker, etc.

Here is what Demand Studios offers freelancers:
• We’ve paid out more than 10 million dollars to the freelance community since the beginning of the year (and, we plan to pay out even more next year – regardless of the economy…) Which means that essentially, Demand Studios has created more than 10 million dollars worth of opportunities for writers and filmmakers
• Quality freelancers don’t have to do the dance – most of which it is not fruitful and doesn’t pay – to get paid and published. Once they are accepted into our system, they get:
o One-stop to get a byline on multiple sites. Freelancers have the ability to grab titles for multiple destinations and brands, from eHow.com to LIVESTRONG.COM.

o One of the most prompt and reliable payments for freelancers out there. We pay our creators every Friday – the overwhelming majority within 7 days of when they turn in work, regardless of when we publish it on site or start making money from it. Most publishers don’t pay until after the piece runs, which could take months for most publisher’s content creation cycles

o Work is available to quality freelancers around clock. Freelancers spend so much time pitching back and forth with editors, and they never get paid for that time. Our freelancers are on the clock from the time the start until exactly the time they turn in a piece

o We give ongoing feedback to our creators. We invest in our creators because it is crucial to our business. We want to keep and retain our quality creators – so we give ongoing feedback, criticism to the freelancers on the content they create. This is in addition to ongoing tips through calls, emails, forums, blogs, etc. with our editorial teams

o Listen to our testimonials. We are giving steady work in the field they are passionate about

Lastly, one final thing to point out, we are creating endless paid opportunities for quality creators, that easily fit in anyone’s life – from retired school teachers to hustling freelancers right out of college to stay-at-home parents who are field experts. To me, it’s tough for any journalist to argue with that – especially when so many publishing outlets, especially traditional ones, have thrived for years on the fact that writers and filmmakers would work for free – if they could just get eyeballs to their work.

Just my two cents in the spirit of open dialogue and as this is an area that I know you are very interested in.

Thanks again for coming out the other night as I’m glad that you were able to participate in the evening event with us!

Cheers,
-w