From a business perspective, traditional journalism is rather inefficient.

Stories are chosen by a small group whose members often have similar experiences and outlooks. With little knowledge of true market demand, they assign the stories to a limited pool of writers and reporters who may not have the knowledge or contacts to quickly do a top-notch job. The stories are then produced and put out to consumers who may or may not like them. The process is repeated, daily or weekly or otherwise, often with little hard data on what, exactly, made a given story or feature popular.

But despite the inefficiencies, publishers have been able to survive, even thrive, because of other inefficiencies and barriers to competition, such as costly printing presses, advertisers with few other viable outlets and controlled distribution.

Enter the Internet. The “content farms” that MediaShft has focused on this week are exploiting new digital information technologies and systems to turn the model on its head, remove the friction caused by the inefficiencies, and reap the economic rewards. Rather than a small group of editors surmising what a community might want, algorithms from Demand Media, AOL and others process search queries and social media, glean what’s wanted, then use other pieces of technology to calculate the likely value; they then quickly find writers or producers at a profitable price, assign and produce the content, attach money-making ads, and pay the “content creators” in a streamlined way.

Some in the industry may bemoan what’s produced as “dreck,” a term AllThingsD’s Kara Swisher used while interviewing Demand CEO Richard Rosenblatt, but it does seem to satisfy a significant number of media consumers.

“Whenever you do stuff at scale and it’s disruptive, people immediately think it’s not good,” Rosenblatt told Swisher, saying Demand produces some 6,000 pieces per day. “We’re trying to prove that our content is good.”

It’s not as if the content farms invented the idea of producing work that’s just good enough to sell. Just scan the racks at your local newsstand. As for complaints about the amount the content creators are paid, anyone producing the content is doing so voluntarily. By definition, they’re being paid a market rate.

Not All Content Creators are Content Farms

Not every company trying new media business models can be put into one “content farm” bucket. Organizations like Politico, Patch and MainStreetConnect (a recent client of my company) are hiring reporters according to a more traditional model and focusing them by subject matter, geography, or both, while also using technology to keep costs down and drive new efficiencies that allow them to become, they hope, profitable with lower revenue than is required by traditional news organizations.

It’s the classic case of a disrupted industry: The newcomers can do what’s required to make a profit without having to support legacy processes responsible for a majority of current profits.

“It’s hard to do something for future gain that is costly in present revenue and margin,” publishing industry expert Mike Shatzkin told me in an interview. “If you don’t have present revenue or margin, you have nothing to lose.”

Writer James Fallows, in a recent Atlantic Monthly article, suggests that those bemoaning the fate of journalism might take a page from the engineers at Google, and instead try new processes, test and iterate, to discover how to derive enough revenue from what they make to sustain its production.

“Find out what [consumers] really want and value, and try to give them that, instead of what you’ve been making (which they may or may not want to buy, but which you’ve wanted to sell),” Alan Webber, who co-founded Fast Company magazine, told me in an email. “Find ways to cut costs. Find ways to cut waste. Find ways to test new ideas, new products and services faster, cheaper, and better.”

That’s more productive than fretting that the old ways of doing business are no longer working. And it sounds like what the content farms are doing.

Transformation of the Media Industry

About a century ago, as Americans were switching from horses-and-buggies and trains to cars, there were said to be more than a thousand companies producing automobiles in the United States. After a vigorous era of foment and entrepreneurialism, a handful survived, often incorporating the lessons learned from some of the other players that they bought out. Eventually, a thriving industry supplying millions and millions of consumers was born.

Entrepreneurial journalism — an increasingly popular topic at journalism schools and institutes around the U.S. — is just that, entrepreneurial. Amid the ordered disarray of startups and growth, different models are being tried. Some will succeed, and more will fail. New standards will be created.

Those upset that their skills can’t get them more from the market might do well to bolster those skills. No longer is it enough to be able to report and write; hiring managers are looking for the ability to template, shoot, mic and perhaps even write a bit of code. If you don’t know how to use Twitter these days, you’re nowhere near the cutting edge.

Think of the power the new tools give journalists, including ones working for such venerated institutions as the New York Times, to reach beyond the confines of their publications and personally assemble communities of readers, viewers and participants around the journalism they create, while also developing leads and sources. That’s more traffic for the publication, more influence and voice for the journalists. The tools also give people working for the content farms, also known as content mills, the ability to quickly get their work done and in some cases earn an hourly wage well beyond journalists’ typical starting salaries.

“Yes, Demand Studios is a content mill. A new business model well adapted to the way consumers demand information. Get over it already,” writes a commenter on a previous story in our series. “Why do I work for Demand Studios? The hourly pay is worth it and the independence fits my lifestyle.”

A former managing editor at ABCNews.com and an MBA, Dorian Benkoil has devised and executed marketing and sales strategies for MediaShift. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, retaining and monetizing audiences. He tweets at @dbenk.

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