5 Reasons Demand Studios Only Pays Writers Peanuts — and Won’t Change

People are cogs in a machine

Have you wondered why content mills can’t pay writers better?

If you write for content mills — or have in the past — you know their pay rates are rock-bottom low. I gather $20 an article is the big time, in the mill world.

I hear about low pay from content mill writers all the time. The stories are remarkably similar, and usually go like this:

“I work really hard, putting extra time into research to make sure my posts are high quality. Still, I just get the same $15 as everyone else.

“And now, the mill is cutting back on how many good assignments they have, too. I know a lot of what they get is garbage…why don’t they just raise their rates and work with better writers?”

It’s long been a question writers shout to the sky, or ask other writers on chat forums. Why can’t mills pay more?

But that’s not where I ask. I’m a business reporter — so I go to the source.

Let’s peek behind the content-mill curtain

As it happens, one of the biggest content mills, Demand Studios, is owned by a public company, Demand Media. That means their finances are a public record.

That’s right, it’s a free look at the inner workings of how content mills make money! But I believe few mill writers ever read these reports.

This week, Demand Media released its annual report, disclosing its revenue and income for the year. I believe taking a look at this will help writers understand why mills pay squat — and why they always will.

In short, it’s their business model. It doesn’t work very well.

Demand’s rise and fall

Before we dive into the numbers, a little context: Demand is one of the biggest — and widely considered one of the most successful — mills ever created.

By 2009, there was buzz that they were wildly profitable and would soon put the New York Times out of business and destroy the entire model of hiring professionals to write reported articles. Then Demand filed to go public in late 2010, and the hype met reality. By all standard accounting measures, Demand was in fact losing money.

The company managed to go public anyway, and enjoyed an initial run-up in the stock market.

Then Google changed its algorithm to penalize sites like Demand’s, that rely on low-grade, repetitive, keyword-stuffed content. Overnight, Demand’s sites lost about one-quarter of their traffic. The stock crashed from a high around $24, and stayed down, hitting a low of $6 a share in fall 2011.

You can assume all the other, privately held content mills experienced something similar.

So there’s reason one why Demand doesn’t have more money for you: low company value.

High stock prices give the company a high value to bankers, and allow it to easily borrow capital for growth. Low stock prices mean a cash crunch.

Here’s what Demand made off you

So, let’s put on our green accountant’s eyeshades and take a look at how Demand’s doing.

In 2011, Demand brought in $325 million. Of that less than $200 million came from its content-development business — the cheap articles writers create for Demand’s stable of sites, which include eHow and Livestrong.

See, Demand has another business that’s a real cash cow and low-cost, too…domain name registration. That’s where they make the rest of their dough.

What did they net on that nice fat income? Nothing. Demand lost over $18 million in 2011.

Now, on to 2012. Demand made $381 million last year, $227 million of it in content development.

This time, they managed to squeak out a profit: just over $6 million.

Can you believe it? They had an audience of 125 million last year. That story you’ve been told about an ad-click affiliate goldmine — it’s really hard to make it pay, when you have to pay writers to create the content that draws people to those ad pages.

So, reason two mills stay cheap: Demand has pulled out of the red, but they’re still not making much money. That’s a profit margin of under 16 percent. The markup on running a coffee stand, by contrast, can be 200 percent or more.

Reason three: Growth prospects aren’t great. It’s unlikely Demand will grow hugely in size from here. Even if they did, there’s only a tiny profit in this way of generating income. So the outlook isn’t that there will be more assignments and money, unless they acquire new sites — but a low stock price makes it harder for them to buy up companies.

Reason four: Costs are going up. To get that huge traffic, Demand has to advertise on other sites. As the Internet gets busier, it’s harder to stand out in the mob, so Demand has to advertise more. They spent $12 million on “traffic acquisition” in 2011, and had to up it to $19 million last year.

And, of course, they had to pay you, the writers of the content. They do a good job of hiding how much that was in the report — closest line item I’m finding in expenses is “product development” — for which they spent over $40 million.

Compare that with the profit line and another truth emerges: Demand can’t afford you, even at the low wages they pay you now.

If what they had on their sites was more valuable to people, they could drive traffic with natural search and readers’ social shares for free, and spend little on ads. But most of their articles are low quality, so they have to flog the Internet to drive traffic in the door. If they didn’t have that cost, they’d have made four times as much profit.

Why don’t they blow up their model, pay more for great content, drop the marketing strategy, and earn more? Because that’s not how they roll.

It would take a huge, risky up-front investment to switch to a quality model…and clearly, they don’t feel confident paying more would earn them enough additional ad revenue to make it pencil out better than what they’re doing now.

Also, with the current low-quality model, standards are low and so the pool of potential writers who can do the work is plentiful. That allows them to continue pitting thousands of newbie writers against each other to keep costs low. Switching to quality would mean fewer qualified writers, and possibly — eek! — rising rates.

Demand’s new plan to make real money

There’s writing on the wall on where Demand is going with their business — and it doesn’t bode well for freelance writers.

In December, they bought another big domain-name site, Name.com. And this week, Demand announced the company is exploring a plan to separate their two businesses into two different companies. One business would have the domain name sites, the other the content mills.

Demand’s stock went up right away when they said that, for the first time in a long time.

Why?

Stock investors like easy-to-understand business models. They also like high-margin businesses.

This move will allow Demand to get more for its higher-margin domain business. The cost-heavy, marginally profitable content biz is dragging down the stock’s value. The company grew its revenue from domain registration last year, too — it’s a bigger percent of the pie now.

Demand also quietly killed off some of its content sites last year, the report states, and took a write-off on them.

If I were writing for Demand, that might make me bite some fingernails. What would you do if the site you’re writing for went ‘poof’ one day? I recommend having a plan.

There’s talk that they will fight their Google penalty by commissioning more better-quality, longer-form articles. That’s basically the one glimmer of hope here for writers.

I’m still waiting to see if they plan to pay more for that better content, or if there’ll be much of it. I’ve been hearing this one for years, but not seeing a lot of changes.

On the other hand, splitting the company could also allow Demand to more easily sell off, fold, or downplay its less-profitable content business. My money’s on it going more that way than the better pay/better articles direction.

Even if they might pay a few writers more in the future, 20 years covering mergers and acquisitions have taught me one thing: Companies don’t spend money while they’re cleaning up the balance sheet for a spinoff or sale.

So, reason five: Demand’s reorganization means spending cutbacks for now.

To sum it all up, the trends here for content mill writers aren’t good. It could be time for Plan B — getting out and proactively marketing your writing to find your own, better-paying clients.

What do you think of content mill pay, and where it’s headed? Leave a comment and give us your take.

 

 

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90 comments on “5 Reasons Demand Studios Only Pays Writers Peanuts — and Won’t Change
  1. Carol,
    Thanks for the article on Demand and the way they run their show. For the sake of having something current in my portfolio, I have considered undertaking assignments from various content mills but at this point, have not actually done so. Along with general low pay, is the litany of requirements in place a writer must adhere to for approval, prior to acceptance. As I have a day-job and a website, I don’t necessarily feel that participating in these type of things is in my best interest. I just don’t think content mills are my forte and guess I’ll be taking the ‘long way around.’ My portfolio is from twenty+ years ago, when I was an active columnist and freelance and I feel the material may be dated at this point in time. I think blogging may be the best strategy to provide possible clients with an example of my skillset.
    Thanks Carol, for the helpful information.
    Richard Myers

    • Carol Tice says:

      I actually consider skipping content mills the shortcut, especially if you already have a portfolio!

      And the age of your clips doesn’t matter. Just dig ‘em up and use ‘em.

    • Amel says:

      What Carol said is true. There are tons of magazines out there willing to work with new writers, so the fact that you have a portfolio, even an “old” one, already makes you stand out among those who have never written for publication. If you really want “new” clips, there is no reason why you can’t start writing for magazines that pay a decent amount right away.
      Amel recently posted..Earn More by Writing for Markets that Pay 20 to 30 Cents per Word

    • Lisa says:

      Richard, you’d be much better off writing for your local Patch.com site than Demand. Some people won’t even read the dates on your articles but a few will.

      I’m happy to see Demand in the red. Just as I was happy to watch Arthur Andersen go down in flames. Companies with bad business models deserve to die, hopefully sooner and not later.

      Carol, you’re so right. A company looking to sell off part of its business has zero interest in investing more into the business.

      Go to Chamber of Commerce meetings and business conferences to market yourself in person to your target audience. It’s a much better way to spend your time and will bring you better-paying clients.

    • Cincinnatus says:

      This is less a reply to Richard than the article in general. If you are not able to earn between $25 and $50 per hour writing for Demand, that means you shouldn’t be writing for them. All these angry writers? Probably people who got fired for not having an area of expertise.

      Now watch how this works, Carol: the real writers on Demand use their expertise to crank out an article in something like 20 minutes. It’s only 400 words. Then, we find citations that match bc they’re required. So, while Demand doesn’t explicitly care how high we can drive out effective hourly rate, it just works out that the best writers with the most expertise make good money.

      On top of this, if you’re in a position where all of your income comes from one source as a freelance writer….again, that probably reflects your lack of marketable skills.

      As to the author, during 2013 (and since) the rate is $25 for 400 words. Why’d you misrepresent this? Also, the Topic Light (around 200 words max) is the easiest money you’ll ever make. I’ve compared rates for many publishers. Demand is a perfectly fine place to write.

      Are there issues? Yes. Some stemming from restructuring, etc.but so what? But you’re doing me a favor. Keep prospective writers away. More for me…😆😆😆

      • Carol Tice says:

        Cincinnatus, it does sound like you are the type of person who does well on Demand — a writer who can ‘use their expertise.’ The only writer I ever met who did well on Demand was a former building contractor who could rip out topic about drywalling and what-all in 10 minutes.

        For people like that, as long as the assignments last, mills may be a good opportunity. For writers hoping to earn well who don’t have a 20-year past career in some lucrative field, I continue to believe they are to be avoided.

        Hopefully you saw that Demand just spun off its domain business yesterday as a separate public company, which I believe may pave the way for them to reorganize, wind down, or shut down their content side entirely…so enjoy it while you can.

  2. Jen says:

    Great article! This just goes back to why quality publications have been going out of business and suffering. There’s too much free content on the internet. It’s not just the mills but look at our own websites. We write terrific content with no paywall. Like so many others, I’ve been blogging partly to create a repertoire of good writing as a kind of resume to eventually get paid. I think we are getting to a tipping point and I’m not sure which way it will go. In any event, there’s just too many things to read and not enough eyeballs.
    Jen recently posted..Writing Made Easy And Other Lies

    • Most information-seeking readers (and not a few content-mill writers) are either too lazy or too much on the hurry-hurry-do-everything-you-can treadmill to bother checking whether what they learn–and repeat as fact–is accurate. Even though it’s no more financial, and hardly any more time, investment to make sure the website you find has a good reputation or to download an e-book through a public library’s website, most people would rather just do a quick Google search and believe whatever comes up first in the results.

      An incredible amount of that “free content” is worth what it costs–totally inaccurate and easy to prove so for anyone who cares to try. It’s the Web, after all, that is posting all those items that imply people get rich writing for content mills (or that someone can sell you a quick-and-easy way to get rich from any sort of writing).
      Katherine Swarts recently posted..How to Use “Use”

    • Not, of course, that I include the good-quality writers’ websites and blogs you mention under the “worth what it costs” category. But they do have a lot to compete with on the SEO circuit (especially against those who are mediocre writers but great SEO technicians), which is why it pays to use those free-content opportunities to “brand” yourself so people will come looking for you specifically.
      Katherine Swarts recently posted..How to Use “Use”

      • Rachel says:

        Actually, as Copyblogger has been talking about lately, SEO is rapidly going out of style. It started with the various Panda updates, but SEO is up to take a big hit with the Google “authority” ranking that is gearing up to make a big difference in how content is ranked.

        Basically, SEO won’t make one hoot of a difference: instead, Google plans to keep track of how often content is shared, referenced – in other words how useful it is in real life. That’s one of the reasons why it’s important to jump on the Google+ bandwagon, since this will be a big part of it (in fact, it already is; if you’ve noticed how people’s pix are starting to show up next to a link in search…)
        Rachel recently posted..Why Raising Kids Is Like Polishing Diamonds

  3. Great write up Carol. Thanks for the info. I’ve always been interested in the behind the scenes at sites like these. If anything it just confirms that I have absolutely zero interest in ever working with them…

  4. John Soares says:

    I agree with your analysis Carol. I also wrote about the dire situation for Demand Media shortly after it went public, back when the stock price was north of $20 per share. At this moment it’s at $7.75. (Ticker symbol DMD)

    Content mills are at the mercy of Google’s algorithm and could lose nearly all of their traffic with a single change at big G.
    John Soares recently posted..50 Ways to Beat Writer’s Block and Procrastination: A Free Special Report

    • Carol Tice says:

      And I gather Google IS cooking up another revision, John, so we’ll see if Demand’s traffic crashes again.

      • Cincinnatus says:

        Please find my response from today at 9:48am and respond.

        Again, a strong writer with actual expertise will do very well on Demand. Your “investigation” missed the most important parts, and was not balanced.

        Furthermore, who IS making money in this game? Major digital media outlets are bleeding money now. Who is the exception? NYMag is making as much from digital as they are from print. But they just unleashed a new digital property-within-a-property that is what? A content farm. A sort of aggregator of the worst kind of fluff. Justin bieber stories, etc. but who cares? I don’t resent them for it.

        Where does your massive chip come from? Did you get fired or rejected by Demand? Why did you not attempt to reach out to writers who do well with Demand? Like me. And I will gladly stake the quality of my writing against any site covering the same topics.

        • Carol Tice says:

          As I say, I have featured writers who’ve done well on Elance and mills in the past. I tend to hear from one every three years or so…which I think provides a good indication that the vast majority of writers do not earn well. Which is why they come to my blog and/or join my writer community — so they can learn how to get better-paying clients.

          Demand’s own figures are that the average writer with them earns, as I recall, perhaps $1000 in a year. They’ve designed it as a platform for hobbyists, not for anyone looking to earn a full-time living. It’s freelancers who make the mistake of trying to earn real money from it.

          I have never written for a content mill. I don’t have a chip — I’m just here as an advocate for better pay for writers. Having mentoring thousands of writers over six years, I can tell you, you are an outlier in the world of mill writing. Congrats that it works for you — but it works for few, which is why I don’t recommend it.

          Who’s making money in this game is the owners of sites, for the most part…not writers. I’m here to point writers in directions that lead to good pay for the writer. For the vast majority, that continues to not be content mills.

          Perhaps you’ve noticed that content mills go bust a lot, because their business model is a failure — as the former Associated Content did recently. So as you say, diversity is key if you’re going to write for mills.

  5. Lorrie B says:

    Hoorah! First of all, a big thanks to Carol for a great piece of investigative journalism. This is the type of quality writing that content mills discourage. Which brings me to my next point: There is an economic model “out there” that threatens all of us, because it relies on exploitation and the advertising industry to fuel its success. Content mills, like puppy mills, destroy the environment of trust which they purposefully EXPLOIT to get new consumers on board. It’s a huge money grab, is unsustainable, and – in any industry – it drives both quality and credibility down, down, down. As a freelance writer, I feel it is my duty to ignore this economic model until it withers up and goes away. Supporting it just gives it fresh blood to feed on – with Internet growth, there are potentially nine billion clueless readers for them to hit on. Does any credible writer really want to be part of this?
    Lorrie B recently posted..Let’s get to the bottom of this.

  6. Rob says:

    Thanks for a very informative article. I wrote about 50 articles for Demand Studios a few years ago until finally finding a way out. Nice to hear they didn’t profit too much from my work, because I certainly didn’t profit much from working for them. It was actually a pretty cumbersome system and between paying writers, editors and the editors’ editors, I’m surprised they made any money at all.
    Rob recently posted..Walt Whitman an SEO Guru?

    • Carol Tice says:

      In the IPO where they had to break it down in more detail than this current report, as I recall the math was they pay you $20 or so, make $54, and were still losing money because of their overhead. It’s actually a costly model, and they’re still struggling to make it work.

      One metric I forgot to mention in the post above is their accumulated deficit — that’s how much money they’ve lost over the life of the company. Currently stands at nearly $65 million. The $6 million profit didn’t go far toward getting them truly into the black.

      Also, Demand is still using a lot of non-standard accounting measures to try to show investors that its business is thriving…always a big red flag that the company isn’t really doing well at all.

  7. So Demand bought Name.com?! Oh my. I hope it won’t screw up my favorite domain registrar. Demand screwed up itself pretty bad from what I read here and on its income report…
    Luana Spinetti @ Writer’s Mind recently posted..A 12-Items Proofreading Rubric For Your Beta Reader Friends

  8. Robert Feinberg says:

    I’ve been admitted to four sites, five if you count Rant, which I don’t, but I haven’t been able to do any work for any of them, because they have daunting gatekeeper issues, and they don’t actually seem to have much going on.

    One additional point is that for these articles on how to assemble a garden hose, one is competing against writers from, say, Burundi, where a dollar is still worth something.

    I have never bought the premise that freelancers can survive in this environment. It might have been possible a few years ago.

    So if people have a Plan C, they should go to that.

    In addition to writers from Burundi, one is competing against interns. We are gradually, and not really so gradually, becoming an intern economy.

    Another pitfall is the so-called startup, where they advertise for writiers, but they don’t want to spend anything. It doesn’t pay to work for startups. I worked for one for a month, and they just went away, and that was one of the better experiences, because they paid fairly and on time.

    I responded to an ad from someone who said he would pay x for y articles, and he was eager to talk, but when we talked, he said he’s a startup and doesn’t have anything to pay writers. So why did he advertise? Happens all the time.

    • Carol Tice says:

      Hi Robert — when you prospect proactively and find your own clients, you leave the world of competing with Burundi. That’s why my blog is all about how to do that — how to leave the Underworld of freelance writing these sites represent, and get back to the world of real pay.

      I only work for venture capital-funded startups, which usually don’t vanish, and can pay very well. Otherwise, as you found, they’re a risk.

  9. Amandah says:

    Carol,

    Thank you for this comprehensive look at Demand Studios!

    I stopped writing for content mills years ago. My thought was, “If I’m putting a lot of time, effort, and research into writing for content mills, I should just do the same with marketing and PR and take my freelance writing business to the next level.” I had a change in mindset. If I was going to write for a client, I wanted to write for one that paid me what I was worth and saw the value I brought to the table. Don’t get me wrong, as a newbie freelancer, I was grateful for the writing samples, but I knew I had to let go of the content mills.
    Amandah recently posted..Stop Wasting Time! Go from Ideas to Blog Posts

  10. Jeanne says:

    I confess I’ve written for Demand’s ehow and Livestrong sites. One issue I had back then was the editors. One would accept anything and then next would make stupid requests that made me wonder if she/he even read what I wrote. I’d do scads of research, include detail and it would get rejected. I’d write a fluff piece and they’d take if first round. It was a very weird place and I don’t miss it. It was pocket change at best.

    • Carol Tice says:

      I’ve heard a million of these mill-editor stories, Jeanne. I know it’s very hit and miss.

      And on the video side, Demand wouldn’t accept my husband, who is a UCLA Film School grad and worked in TV for a decade! It’s clearly pretty random. Hope no writers are taking it personally if their stuff is rejected.

  11. Lisa Baker says:

    Love this! Your business-writer perspective on Demand is fascinating. I knew DMS was unsustainable the day I discovered them, but I still wrote for them for a couple of years. I don’t regret it, because I was just a hobbyist writer at the time, and Demand easily paid for the fiction writing class I was taking, along with the coffee I drank while I worked on my novel. :) But I knew from the beginning it was going to tank at some point, so when it did, I wasn’t surprised. At the time I thought, well, it was fun while it lasted. And it was. It was easy money. It was much less work than marketing and doing real articles. It was what I needed at the time, so I don’t really regret it.

    But I do kind of regret not using a pseudonym! Not that what I wrote for them was so horribly awful. But it’s still embarrassing compared to what I CAN do — and what I’m soon now. I never had any illusions that those articles were going to contribute to my portfolio. I just wasn’t thinking about building a portfolio at the time.
    Lisa Baker recently posted..The Brutal Truth About What Babies Eat (and why you shouldn’t feel guilty)

    • Carol Tice says:

      Then you were the perfect fit for Demand at that moment, Lisa. That’s who it’s for, hobbyist/dabbler writers. In interviews, Demand execs freely explain that these are the writers who are happy on their platform, and who are typical in their system.

  12. Linda Joan says:

    Demand Media pays $25.00 per 400 to 600 word article, and has been for about one year. Your research is not up to date. Lumping this company in with the content mills that pay 1.7 or 3.2 cents per word is inaccurate and misleading to your readers. The writing standards at Demand Media today are substantially different than even one year ago. Perhaps you could look at the quality of writing now produced by Demand Media channels before you dismiss them all as poor quality writing.

    A part-time job that pays $25.00 per hour is rare in this economy. And yes, it could be gone tomorrow. As could the job at the local grocery store.

    • Carol Tice says:

      Hi Linda — happy to hear you’re seeing that rate now. Since the Google change, I’d been hearing a lot more reports on the lower end of their pay scale.

      Obviously, Demand is a far cry from Amazon Mechanical Turk or something…but for an American or first world writer anywhere, really, it’s still tough to make it add up to a living. Get what you’re saying about $25 an hour job…but that job often comes with paid sick/vacation and sometimes healthcare, provides equipment, pays half your employment tax, and on and on. $25 an hour freelance does NOT equal a $25 an hour job. I have a whole post coming up on this topic, which confuses so many freelancers.

      • Linda Joan says:

        You are quite right. A 25.00 per hour job is not net 25.00. But how many free-lance jobs have benefits in the pay? Not many. Actually none that I know of.

        If you want to pay the rent and buy some groceries while you are pursuing a career, a part-time job may be the answer. Not everyone has the luxury of a two-income household. I choose not to work in the grocery store. I’m sure McDonalds makes a heck of a lot more money off the backs of their minimum wage workers than Demand makes off me. I work a few hours a day and cover all my household expenses, my car and my mortgage, and pay my taxes. While I pursue my main career.

        I am very qualified in my field. Fortunately I can also write instructional articles that explain processes very clearly. If I wrote an article for a magazine and it was rejected, I would not be slamming the magazine because they didn’t choose my article. I would have to assume that I did not write to their standards. I need the subject knowledge and must also be able to write. For example, a degree from a film school and experience in the industry for a decade does not guarantee excellence as a writer. Contrary to what you intimate as the random selection policy at Demand Media, there are strict guidelines for writer qualification.

        • Carol Tice says:

          Hi Linda — every once in a while I hear from someone who can earn well on Demand, and you fit the bill — someone with a sophisticated knowledge area they can write on off the top of their head. Seems like that makes it pencil out.

          I hear more often from mill writers who say they’re investing 3 hours or more in a single post, and it’s just not adding up.

          You’re right that freelance jobs don’t have benefits…that’s why $100 an hour is the target rate I recommend to cover all those freelance expenses. Which pretty much nobody makes on Demand or any other mill.

          • Linda Joan says:

            From Word count:

            The best cities to be a freelancer (SmartPlanet) – If you guessed New York and the Bay Area you’d be right. The areas with the highest wages for scientists, knowledge workers and writers are San Jose ($26.42/hour), Washington, D.C. ($25.55), Boston ($25.39), Philadelphia ($25.21), New York ($25.10), San Francisco ($25.02), Houston ($24.64), Birmingham, Alabama ($24.21), Austin ($24), and Los Angeles ($23.50).

            100.00 an hour for a free-lancer. Where?

            • Carol Tice says:

              Hi Linda —

              I don’t think of SmartPlanet as the best place to get wage information…never heard of it, really.

              And freelancing at what? Is that some kind of average of all freelancing, including things like typing, transcribing, and other lower-skilled work? I’d imagine so.

              The thing to know is that there isn’t some magical city where better pay is found. There’s great pay everywhere, and it’s a global business. It’s a question of going after bigger publications and bigger business clients, the ones with real marketing and editorial budgets.

              Find large, successful organizations, and you find better — and more ongoing — pay. I even did a regional government contract for more than $10K recently that was billed at $60 an hour, and governments tend to be on the low end of the scale.

              I live on a tiny island, and haven’t had any trouble making $75-$100 an hour and more, from clients all over the world.

              I find if writers seek out bad news and buy into the negativity that all pay out there is in the basement now, that’s the reality they inhabit. If you believe you can find good clients, it tends to happen.

              • tara says:

                Carol,

                I came across your “blog” by accident, but I am quite tired of hearing people making your kind of claims.

                If you are making so much money as a freelancer, I suggest you post your PayPal account earnings or other proof of your income. Paula Neal Mooney, a former writer for examiner.com, did just that. At one point, she was earning about $35,000 a year writing for them. She posted a video on her blog that showed her earnings via Paypal. She has since expanded into writing ebooks – good for her.

                All of you people claiming to be rolling in money writing freelance articles or copy for private clients are full of it, especially in this economy. Newspapers still use freelancers, but that might mean two to four articles a month at $200 a pop – and that’s at a major metro. A thousand dollars a month as a freelancer is not much more than someone makes part-time at McDonald’s – although the job title of “professional writer” admittedly sounds more impressive. You’re just not making any more money than a fast-food worker, but that’s your little secret, of course.

                Further, most people who want copy for their websites, for example, will gladly pay a writing service peanuts to write instead of paying someone $200 or more. Many private clients will run you ragged trying to squeeze 40 hours worth of work out of you for that amount. It’s usually more hassle than its worth.

                In any event, quit perpetuating myths and lies, unless you can back up your claims with proof. And quit browbeating people who either have or are making a lot more money than you are writing for these so-called content mills.

                The days of $500 feature stories simply do not exist anymore. To tell new writers otherwise is doing them a huge disservice. It’s simply a lie. Those who get that much per article are far and few between, and they certainly don’t have time to write blog posts to browbeat others who are simply trying to make ends meet.

                • Carol Tice says:

                  Hi Tara —

                  I have posted a decent amount of proof here on the blog over the years, including one year a client-by-client breakdown of client type, how I found them, and what I made when I topped six figures. Since I don’t get paid by my freelance clients mostly on Paypal, showing a Paypal printout wouldn’t help with that.

                  But I’ve also learned that some people have a strong need to believe there’s no money in freelance writing anymore to normalize their own failure to build a viable income in this line of work. So no matter how much you document the wins, they still think you’re a liar. It’s something I’ve had to accept.

                  I’m sorry you don’t think $500 articles exist anymore — I was offered two $800+ ones last week, from an airline magazine. I turned them down because at this point I’ve moved to a different phase of my career, where after publishing two print books with traditional publishers, I’m focused on book ghosting, and on serving my Freelance Writers Den community.

                  I think if I was making it all up and my advice didn’t get results for people, the Den wouldn’t have 800+ paying members. In fact, members are posting their wins at finding new clients and getting better rates every day. If you get off the mills and proactively market your writing, you can find professional-rate clients…and not just me. I read about it from members every day in the Den.

                  While you’re right that newspapers are no longer a very lucrative market for freelance writers, they’re a great place to break in. And there are plenty of other markets left, both in business and publications, that pay well.

                  Not every client wants to go on Elance and find the lowest bidder. Some need expertise not any old writer can provide, and don’t want to have to do the project three times until it’s done right — and that’s where I come in. I’ve found most of my private clients a delight to work for and at $100 an hour or so, well worth the “hassle.”

                  But if you’ve concluded mills are the best place for you and that low pay is all that’s possible…that’s your reality, and I accept that I can’t change it.

                  PS. “This economy” has been in recovery for a couple of years now…it’s time for writers to stop blaming macroeconomics for why their business isn’t growing and get out and do their marketing!

  13. Nicely done. This is probably the most insightful and fact based article about content mills on the internet. Great case study that should open more eyes and push good writers away from the mills.
    Sarah L. Webb recently posted..Re-Routing: Why the Wrong Road Doesn’t Seem So Bad at First

  14. Jeanne H says:

    Fantastic analysis Carol. I’ve looked into, but not written for, any of the content mill sites because I just couldn’t bring myself to do it. A modern-day version of the Grapes of Wrath, only instead of picking peaches, writers are cranking out SEO tripe for pennies.

    I’m glad that visiting your site has drilled into my head the fact that I should never consider accepting such low pay. :-)

  15. Mandy Harris says:

    Great article, Carol. Demand Studios is going down, for sure. But that’s not the end of content mills. The Internet means corporations need more writers than ever, and as long as there are writers willing to work for pennies, there will be content mills.

    The new content mill model goes after these corporations, promising lots of content for cheap. These corporations already have a reputation that sells. They don’t need top notch writing–yet. Internet shoppers already seek them out. Textbroker and Skyword provide content for some huge companies.

    Here’s the thing, content mills have some really good writers. Also, they instruct their editors to be relentless, meaning that $15 article takes just as long as as a $100 article, even more because the writer does not have the benefit of communicating with the client. I’ve written most of my client-based articles more quickly than I ever did with a content mill and with fewer revisions.

    Personally, I wrote very few content-mill articles in an hour, as some writers claim to. I was happy to make $10 an hour mill-writing.

    Content mills aren’t going anywhere until writers refuse to work for their rates. Hopefully, Google will find a way to discourage shoddy content from those massive corporations.

    Until then, keep up the good fight!
    Mandy Harris recently posted..Can You Trust Your SEO Provider to Hire a Great Freelance Writer?

  16. Melissa Weir says:

    Thanks for this Carol! I am just beginning my journey to freelance writing as a full-time job. Of course I want to get clips now, so the mills are an attractive possibility. But what stops me is the math! I cannot sustain myself much less my kids on that kind of money. And while I’m generating content for mills I’m not doing the other hundreds of things that will eventually build a practice that buys my kids a season of soccer. For me, the “Carol Tice Method” makes more sense.

    Again, thanks for this fine piece of journalism!

    Melissa

  17. Jessica B. says:

    Wonderful post. It’s fascinating to hear how Demand does their thing, and it certainly doesn’t make me want to work for them. I’m so very thankful I found your site as a newbie freelancer and avoided the content mill life altogether! Thanks for your commitment to showing us a better way.

    • Carol Tice says:

      I’m amazed at how many writers say to me, “Well, I’m writing for mills, but you have to start somewhere, right?”

      Yes, you do…but you don’t have to start on mills! The woods are full of writers like me who started before they existed. And you can still do it the old-fashioned way, and move straight to clients that pay fairer rates.

      Glad you were able to avoid getting stuck in the content swamp!

  18. “If what they had on their sites was more valuable to people, they could drive traffic with natural search and readers’ social shares for free”

    This summarizes everything right here. Websites are finally realizing that they need quality, interesting,and engaging content; however, many websites are now focused on simply trying to pass off low-quality content as engaging content by adding pics and changing the formatting and then they get frustrated when the content is not shared naturally on Facebook. The day of reckoning is coming and I look forward too it!

  19. Sandra says:

    Wow, thanks for digging this up, Carol. I’m sure that if they better understood the inner workings of these mills, more writers would think twice about working with them. I’m just shaking my head here. Will be interesting to watch what happens next.
    Sandra recently posted..No Kickass Headline, Just What I’m Up To

  20. Sally Bahner says:

    A very good article. I had a brief experience with Demand about four years ago between jobs, two articles published and one rejected because it wasn’t dumbed down enough (the editor even mentioned it was well written and I was passionate about my topic). End of that, never looked back. No writer should get paid $5-$10-$15 for a professionally written and research article.
    Freelancing is tough, and though I found a good Day Job, I still freelance as much as I can.
    I’ll definitely share this with my writerly friends!
    Sally Bahner recently posted..Smithsonian/Wildlife cat study generates outrage

  21. What an in depth look at this situation! I have worked for a couple of content mills in the past and became very frustrated and annoyed with their treatment of writers. Thanks for breaking all of this down…very interesting. It answers a lot of questions!
    Sheila Bergquist recently posted..Stress Relief: Your Kitty Has the Answer

  22. Thanks for this awesome breakdown of Demand’s financial standing, Carol! Makes me glad they rejected my application years ago. :D

    Even if Demand pays $25 now for a 600 word post, that’s still only 4 cents a word. My first freelance writing job paid 10 cents a word, when I had no experience of marketing my services or negotiating rates. There’s no need for any writer to get into content mill work when there are so many potential clients out there!
    Sophie Lizard recently posted..Why I’ll Personally Pay You to Be a Freelance Blogger

    • Carol Tice says:

      Thanks for bringing that up, Sophie — think I also got those rates the minute I got into writing.

      People keep saying to me, “Well, the mills are a good place to start, anyway.” But they’re not. There are better first markets out there!

  23. Lauryn Doll says:

    I won’t lie; my initial draw to making money online was through the “niche” model. Niche sites took a popular web topic and created keyword heavy content that was optimized for search engines.

    I’ve dealt with those sites – and still do, but the cheapening of content and the production process for fast money has done a bit of damage to the system. Admittedly, paying $2-$5 per article overseas to someone else and then editing them for polish seemed like a good idea at the time for most people; however, the inner editor – the one who was picky about what sounded right and what didn’t – was way too harsh on accepting the work as is. I figured PLR was so much better.

    I’ve made a few bucks working from Demand, but as it stands, I haven’t produced an article for them since early 2011, when they started this weird probationary program to highly critique and nitpick your work and chop you if you didn’t make the cut.

    Moving forward, I’ve found pleasure in other forms of writing. I still create niche content, but I pay more attention to content and information – and adding something NEW to the industry – as opposed to chopping and screwing articles other people wrote and “spinning” them into something highly familiar with lots of thesauruses and synonyms. “Ain’t nobody got time fa dat.”

    Even better, I’ve focused heavily on info products and books. Quality books.
    Lauryn Doll recently posted..Creating Art Makes You Sexy

  24. D Kendra says:

    When I first looked at the freelance sites (I think it’s been four, five years now), I was just learning about copywriting. A few people (in forums) recommended them. Even then, as a rank newbie, I thought the prices were outrageously low. I disliked the bidding process as well (the lowest already on there was $1 / 5 articles. Are they kidding?). As a result, I’ve never used them and never recommended them.

    Thank you for the article. It makes me glad to see that my original assessment wasn’t as off the mark as I feared.

  25. Ken says:

    Hi Carol,

    As said numerous times, great post. Way to dissect DS. Like Sophie said, I’m kind of glad they rejected me. :)

    On another note, I received an email today about the Writer’s Den…I was on a waiting list. But when I follow the link in the email it’s asking for a password that I can’t find. Did I miss my chance?

    Ken

    • Carol Tice says:

      Yes, sorry Ken! We only had 100 available seats, and they went in less than 24 hours, which sort of blew my mind! Stay on the list and stay tuned for another opening opportunity after I staff up a bit more.

  26. Dana Sitar says:

    Thank you for breaking it all down, Carol! You’re right; $20 seemed like a fat payday when I was writing for content mills. Sites like yours made me realize what a waste of time it was to write about stuff I hated for money that wasn’t paying the bills anyway. You’re also right that the mills aren’t a good place to start, though they seem that way. We’re better off writing for free — at least that will build a valuable portfolio!
    Dana Sitar recently posted..28 Things I Loved on the Internet in February (Resources for Writers, Creatives, and Dreamers)

    • $20 for a well researched article is really close to writing for free. Isn’t it? Nowadays I only accept that amount for 10-minute sponsored posts I publish on my personal blogs. I recall the days when $20 looked like a big rate for what I considered a ‘write up’… When confidence starts kicking in and eyes open– that’s when we see the truth about the mills.
      Luana Spinetti @ Writer’s Mind recently posted..Can I Really Make Money Blogging? – Jane Sheeba Tells You HOW In 5 Ways (In Her New E-Book!)

    • Carol Tice says:

      It breaks my heart every time I get a writer in the Den who’s been writing for years — and has no clips, as they were all ghostwritten for mills.

      Instead, you could take a month, write several free samples for real clients, get their testimonials, and be ready to earn pro rates. That fast.

      So when people say to me, “Well, I’m writing for mills now, since I heard that’s a good place to start,” I just cringe.

  27. Catherine Lugo says:

    I used to write for Demand Studios, and thought I had really found a good deal. Gradually I realized how hard I was working for very little money. Their requirements are stringent, and then one day I got an email that I could no longer write for them. Just like that. No explanation at all. That stung, but I have moved on. The one thing I will say for them is that I learned quite a bit about writing for the Internet; and those skills have paid off in other ways.

    • Carol Tice says:

      I’m betting you’ll look back in a few years and see getting dismissed from Demand as one of the best things that ever happened to your writing career, Catherine!

  28. Raven Vinnie says:

    What about Cracked? They pay newbies $100 bucks a piece if it’s to the right standards, and for $100 bucks, I really don’t mind all that anyway. Vets get twice that! I

  29. Donna says:

    Carol,
    I liked the way you broke every thing down in this article and I liked your “voice.”

    I wrote for a mill for years after they hunted me down and I rejected times. I had some major personal issues that kept me from prospecting and writing the way I was used to and I could not work full time. So working for them kept my skills up, kept my mind sharp and my research skills fresh. I noticed that some of the writers on the site weren’t skilled and didn’t do their research but at that time, by marketing myself via word of mouth and social media I was able to make enough money to make me feel like I was seeing some type of reward for what I was putting in. It wasn’t enough $ to live on, but it was enough to make me feel rewarded and I was able to pay a few bills with the money.

    Years later that payment model has changed. Now because they changed the way writers get paid, all the work adds up to very little pay or none at all. I never really understood why they changed their payment method and paid so much less. I appreciate you making that clear.

    It is what it is. Things change. It just means it is time to move on. I would say to people here, that I enjoyed working for a mill for a time. But now I’m ready for more. So I want to get back out there and learn how to market myself again.

    For the people who are considering writing for a mill, if you want to do it, I would say try it and see what works for you. Just know that it is a mill. There’s nothing wrong, I believe in using a mill to create a portfolio. Just find one that let’s you write what you want to write, the way you want to write it. There are mills that have less rules and will give you flexibility.

    Just don’t use the mills as an excuse not to pursue more. Don’t get caught up in writing for them and not pursuing what you really want.

    You have to understand your value and trust that money is out there to be made. I just think that being negative isn’t going to get any one anywhere.

    • Carol Tice says:

      Hi Donna —

      Yeah…anytime rates are being cut, there’s usually a pretty basic reason:The company isn’t making money! It’s true at print magazines, too.

      The problem with “using a mill to create a portfolio” is that in fact, many times you aren’t even succeeding at that. Mills have such a bad reputation that you can’t use their clips to impress a publications editor anywhere – they disregard mill clips and might even not look at your pitch idea if they see you mention mills in your bio.

      The exception is if through a mill your work ends up on a more legit site such as USA Today, which I know has used Demand. That can help a bit.

      Glad you were able to move on to finding your own clients! What tore it for me was when one writer told me he had to get up at 2 a.m. to get any assignments before the few available ones were gone, because the volume of available work had shrunk so much. Yet another warning sign of a failing business model…and of time to get out and market yourself and stop depending on these sites for your income.

  30. Donna says:

    Hmm. Carol,
    I didn’t know that people would ignore my pitch if I included mill samples in my portfolio. Thanks for telling me. I really wouldn’t want that to be a hinderance. I guess it is time to dig out my old samples from years ago.

    • Carol Tice says:

      Well, glad I mentioned it then. Most major magazines, I think when they see clips from Demand or Examiner or somewhere, they just move on. There are so many writers on those platforms who don’t have the journalism chops to write a magazine feature, and they lump you in with that crowd. Even though I know many trained journalists who’ve written for mills…it’s just a stigma that’s out there.

      I think business owners are a bit less savvy about these places, so it’s more a coin flip if they’ll form an opinion. But if they do, it might be “I can get this writer to write for next to nothing.” Which is the other problem with mill clips. They know you’re writing for cheap.

      If you have real print clips, definitely dig them out! The age of clips doesn’t really matter much — they still show you can do it.

  31. Donna says:

    And yes I can relate to having to hustle to get one of the few assignments available at one particular mill. I didn’t write for that one for long. Stressful and strange experience. And my editors added errors to assignments during their rewriting process. This was the last straw that made me leave one of them alone for good.

  32. Richard B says:

    I’m glad you posted this, and reading it has alleviated much of my concerns. I had a bad experience when Demand accused me of plagiarism, then reversed my decision and told me I could write for them again. Once I did, the editors rejected everything they could for any reason they could find. I am ashamed to admit this would send me into fits of rage. It’s just as you described: I put in research, format my article, and write well. I get a rejection, or maybe a $20 payout if I’m fortunate.

    They say pay comes regularly, but with edit requests pay can take weeks. Especially when CEs drop an edit after requesting it and leave it for another CE to claim. The system of one screwup leading to rejection is unfair to writers and leaves us feeling like we are at their mercy.

    Reading your article showed me that Demand has to answer to someone.

    Thought I’m terrified of the prospect of losing the content mill work I already have, the back of my mind tells me that there is a reason for everything. Once again, thanks for the post. I really needed to read that.
    Richard B recently posted..Are you Ready for Some Football?

    • Carol Tice says:

      The writers I feel the most sorry for are the ones who CARE about their writing and don’t know how to slap up junk…and write for places like Demand, where that extra effort earns you nothing extra.

  33. Jon says:

    Hey there Carol. I agree with some of this, but I don’t think your basic premise that DM is paying writers poor wages because they’re not profitable is accurate. Your comparison of DM’s 16 percent profit margin to a 200 percent markup at a coffee stand is a huge false equivalence. A coffee stand that marks up its coffee 200 percent does not have a 200 percent profit margin. A 200 percent profit margin wouldn’t even make sense because you can’t have more profit than earnings. Take a look at the biggest coffee stand in the world: Starbucks. That company averages a profit margin of about 10 percent. The 16 percent DM achieved is very respectable. Yes, DM lost some money in 2011 – the year in which Google made their business model unsustainable. Since then, they have changed their model: distributing to third-party sites almost exclusively, increasing their pay and dramatically increasing their quality requirements. But yes, they still don’t pay enough. On that, we can definitely agree.

    • Carol Tice says:

      True, the markup on the COFFEE product itself is 200 percent. Obviously, Starbucks has other operating costs running its stores.

      And yes, DM is changing up their model — but if you read their financials, so far that’s not bringing them a whole lot of profitability, either. I’m sticking with my feeling that mill sites are not a good place to bet your financial future as a writer. They are struggling to make money…and that means you will struggle to make money, too.

      At their IPO, Demand’s figures were that they were bringing in about $54 an article, paying you $15 or $20…and still not making a profit. Because there are a lot of costs to running a large platform, too, and their markup is way to small for it to pencil out. That points the way to paying writers LESS to make it profitable. Or as you say, switching up the model to try to serve better quality content to other clients. With Demand’s poor reputation, though, not sure how many takers they will get for that offer.

      • Jon says:

        Your article got me thinking, so I went ahead and looked at DM’s financials, and I think you may have missed a zero there. 6/380 is roughly 1.6. So, I guess I have to retract my previous statement. They have been making a pathetic profit margin, and last quarter, they lost $10 million out of $96 million in revenue. It seems this is due at least partly to serious changes in management, though DM cited “declines in search referral traffic and advertising demand.” Welp, time to start working on my own projects.

        • Carol Tice says:

          Glad you rechecked the numbers…this is an older post, so I think you may be comparing recent figures to ones from a year or two back. But as you can see, the recent ones don’t tell an upbeat story about the future of content mills. Traffic and ad revenue continue to decline and likely that trend will not reverse.

  34. Chevy says:

    Thanks for this very informative and helpful article . I was researching about Demand Studio and i luckily i ended up here..I Didn’t know the Payment Is that low, well, i guess i’ll stay away from it .Nice Article
    Chevy recently posted..How to test for hardware failure in the computer

  35. Tesla says:

    As a former DMS writer, I’d like to add they treat their writers like crap. The ones that took the time to write informative articles were tossed to the side for those that wrote them fast. The editors were rude and it’s nothing to get a nasty response from them when they’re having a bad day. But I digress. However, I’d like to offer a little more insight.

    DMS had a First Look program that gave the “good” writers first pick of articles before the “mediocre” writers got a stab at them. The “good” writers were chosen based on their content and grammar scores, which is subjective based on which editor looked at their work. After a while, that program went kaput.

    They changed everything and made all the writers reapply for sections they already were authorized to write in, and then denied them assess. Thereby, “firing” thousands of writers. The writers could log into DMS database, but could not write unless they were approved for at least one section other than General eHow. Approval is/was a bear to get. Writers who wrote for a specific section were now told they were unqualified. What a way to cut costs, right?

    • Carol Tice says:

      Sounds like a way to cut the writer pool, which they probably needed to do because of the shrinking opportunity. Forecast: More of same, as Google continues to kill traffic to these sites.

  36. Rose says:

    Carol,

    Thank you so very much for this post. I’ve been looking to make some extra money blogging while in between jobs and had seriously considered Demand Media Studios until reading this article. Despite the fact that it’s over a year old, your piece was a huge influence on my decision not to join the forces of DMS. Thank you for being so honest and forthright, and I look forward to reading more of your work!
    Rose recently posted..First American Magazine Published Today in 1741

  37. Kathy says:

    Hi Carol,
    Well… I guess if my bubble was going to burst, it might as well happen now – BEFORE I got too excited, and applied to Demand. I love writing, and have been making websites and writing for hire (for independent web properties) for years now, and thought, “Hmmm… it would be cool to write for eHow and Livestrong!”

    So, I searched around a little, and came to your blog here. While I’m disappointed in the numbers, I’m at least glad that I didn’t spend too much time chasing this particular rainbow.

    I tried Suite 101 for a while, until I realized that there was no way I could get any links to my portfolio or anything – they said (at the time, and this was about 5 years ago now) that there would be some kind of ad pool (honestly, I don’t quite remember now), but I didn’t see anything from it.

    Back to the drawing board! But, thank you so much for bringing this into the open, Carol. Valuable information, and I’m grateful! :)
    Kathy recently posted..Great Gifts For People Into Self Development updated Tue Feb 18 2014 10:20 pm EST

  38. Denise Hilton says:

    I never knew what Demand Media was even though i had heard bout it so many times. I also read a review about this company but i still don’t know how to apply. They say they aren’t accepting any applications currently.

  39. Richard says:

    Hello Carol,

    Wow…that’s all I can say. I stumbled on to your website and you answered almost all my concerns I had about content mills. I belong to three because I honestly thought that was the best I could do, but ever since I joined three years ago I’ve never been very happy with my paycheque. No wonder, it’s a pittance of what I should have been making and I gave a lot of clients excellent (beyond words) value. Your website confirmed I need to shut that down and take my work elsewhere.

    To be honest I didn’t know where to look until I found your information and some very good links from the various messages that followed your article. I will now start marketing myself properly. Even if I get 10 cents/word I’m doing so much better than I was with the content mills. Sad isn’t it.

    I’m doubly embarrassed to say that I have been a journalist for a TV network and when I retired a few years back the content mills presented themselves as the “obvious” writing avenue. I should have known better, but online writing was a new experience for me, at least that’s my excuse.

    Anyway thank you again Carol from preventing me from going even deeper into the abyss. I was even considering Demand for my next move. No more. I would be very interested to apply as a writer to your Den. Are you taking applications?

    Regards,
    Richard

    • Carol Tice says:

      Richard, I do pay $50 for guest posts — you can read about it here: http://www.makealivingwriting.com/why-i-pay-writers.

      But I don’t hire writers on an ongoing basis, it’s usually just one post per writer. For more gigs, you might want to check out my sidebar for the post on 140 sites that pay.

      The bottom line, though, is that guesting for blogs isn’t the best-earning writing niche. With your journalism background, you should be writing for $1-a-word national magazies and things of that ilk.

2 Pings/Trackbacks for "5 Reasons Demand Studios Only Pays Writers Peanuts — and Won’t Change"
  1. […] producing a torrent of articles in order to appeal to search engines, is a fundamentally flawed one. Carole Tice makes the excellent point that content farms simply do not make enough money on ad revenue to pay for skilled writers. That […]

  2. […] If anyone tells you they can produce your content faster and cheaper, they probably can. Content mills churn out thousands pieces every day, for a fraction of what an agency would charge for the same volume. But their focus is on quantity rather than quality, and part of the reason they’re able to charge less is because they pay their writers peanuts. […]

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