Google in Education

That’s not to say there isn’t any room for humans in Demand’s process. They just aren’t worth very much. First, a crowdsourced team of freelance “title proofers” turn the algorithm’s often awkward or nonsensical phrases into something people will understand: “How to make a church-pew breakfast nook,” for example, becomes “How to make a breakfast nook out of a church pew.” Approved headlines get fed into a password-protected section of Demand’s Web site called Demand Studios, where any Demand freelancer can see what jobs are available. It’s the online equivalent of day laborers waiting in front of Home Depot. Writers can typically select 10 articles at a time; videographers can hoard 40.

Nearly every freelancer scrambles to load their assignment queue with titles they can produce quickly and with the least amount of effort — because pay for individual stories is so lousy, only a high-speed, high-volume approach will work. The average writer earns $15 per article for pieces that top out at a few hundred words, and the average filmmaker about $20 per clip, paid weekly via PayPal. Demand also offers revenue sharing on some articles, though it can take months to reach even $15 in such payments. Other freelancers sign up for the chance to copyedit ($2.50 an article), fact-check ($1 an article), approve the quality of a film (25 to 50 cents a video), transcribe ($1 to $2 per video), or offer up their expertise to be quoted or filmed (free). Title proofers get 8 cents a headline. Coming soon: photographers and photo editors. So far, the company has paid out more than $17 million to Demand Studios workers; if the enterprise reaches Rosenblatt’s goal of producing 1 million pieces of content a month, the payouts could easily hit $200 million a year, less than a third of what The New York Times shells out in wages and benefits to produce its roughly 5,000 articles a month.

But once it was automated, every algorithm-generated piece of content produced 4.9 times the revenue of the human-created ideas. So Rosenblatt got rid of the editors. Suddenly, profit on each piece was 20 to 25 times what it had been. It turned out that gut instinct and experience were less effective at predicting what readers and viewers wanted — and worse for the company — than a formula.

Here is the thing that Rosenblatt has since discovered: Online content is not worth very much. This may be a truism, but Rosenblatt has the hard, mathematical proof. It’s right there in black and white, in the Demand Media database — the lifetime value of every story, algorithmically derived, and very, very small. Most media companies are trying hard to increase those numbers, to boost the value of their online content until it matches the amount of money it costs to produce. But Rosenblatt thinks they have it exactly backward. Instead of trying to raise the market value of online content to match the cost of producing it — perhaps an impossible proposition — the secret is to cut costs until they match the market value.