Most freelance writers are familiar with Demand Media, and some like myself have been exposed in the past to the way they treat writers with their stringent demands for such low pay. Demand Media/Demand Studios and all their other entities give a new meaning to the word content mill, and the information they recently disclosed to the SEC following their IPO filing in August 2010 should make all of us in the industry stand up and take notice.
Profit or Loss?
According to Demand Media’s IPO filing in August 2010 they had a loss of $22 million in 2009, $14 million loss in 2008 and a loss in 2007 of almost $6 million. While this might not come as a shock to some people, the problem is that Demand Media’s CEO, Richard Rosenblatt, has been telling people in the media that the company is profitable. Where is the problem? How can there be two separate answers to the same question? A company is either profitable or it isn’t, and quite honestly, I find it difficult to believe any kind of a loss because of the low payments they make to writers and editors who work for this content mill.
Demand Media’s Answer
The article that appeared in CNNMoney.com indicates that Demand Media treats payments it makes to writers and editors as a capital expenditure and expenses it over a five year period. Their reasoning is that they continue to make money from the articles writers publish for a period of 5.4 years, so they do not feel they should have to expense those payments at the same time they pay the writers. What this means for the writers that choose the flat $15 payment instead of revenue share is the company is still making money off those articles beyond the time covered by their payment to the writers.
Devaluation of Writers’ Needs
As a writer who once did work for Demand Studios, I have often said the way they treat writers is inhumane at best. While to novice writers, payment of $15 for a 400 word article may seem like a nice sum of cash, the reality is you have to work very hard to earn it, and in some cases it may take you more than an hour to research and write the article. Even if you choose an article on a topic you know well, you must still find at least one online source to use, and you must have at least five subheadings in each article.
Their required editorial reviews can also cause problems for writers who already have experience because they may assign you to an editor who treats you as though you are new to writing which was my experience. The combination of this dual accounting practice and their treatment of the very people who make them profitable is enough to make one question the integrity of the company and its entities in its entirety.