Business
Video content involves production, publishing and distribution. More dedicated followers, viewers or fans you have, the more you should focus on Production and less on Distribution
Production is a commodity and expensive; hence why both companies are trying to inject more science into the art to drive down the price of production. A low cost approach can maintain a high enough quality with text content, but with videos it’s more challenging. Moreover, a totally freelanced production team can also have some iota of consistency across text content, but with videos, nothing looks alike and marketers don’t feel any confidence in running ads. Quality content requires consistency. If a media planner agrees to spend $1M on a website running ads next to certain content, it assumes that the content the publisher produces tomorrow will be as good (and similar) to what it sees on the site today. A freelance model does not guarantee consistency and a UGC platform guarantees that it won’t be, especially with video.
Publishing (i.e., building a destination) is a challenge. Demand Media doesn’t have a destination but has a lot of eyeballs through its many sites; AOL meanwhile still has oodles of traffic and in addition to the AOL.com portal has many smaller niche sites with the potential to drive traffic too. Here, we see a divergence between Demand Media and AOL. On the one hand, AOL really does not need to focus purely on search traffic because it has traffic from its sites. Demand Media, however, has a more byzantine traffic pattern on its many sites, so I can understand the focus (and need) to focus on search traffic. However, search traffic is “in and out” and not the kind of engagement that branded marketers look for.
Distribution is increasingly fragmented, to the extent that even AOL is migrating from the one size fits all portal to the multiple web properties, and Tim Armstrong citing “fragmentation is our friend”.
Read more: http://techcrunch.com/2010/04/10/aol-demand-media-content-farm/#ixzz0mqXnuM7L
