Mass content mathematics

For anyone who used to make mass content sites and knows a lot about the issues involved in that task the rising profile of Demand Studios is an interesting one.

So is this business model a mountain too high for everyone else to climb? Endulge me here in my normal thought process…

Here is a few articles to get you started: -

http://thenetsetter.com/blog/business-models/quality-vs-quantity-approaches-to-web-publishing/

Here the creator of the Envato network discusses the plans of Demand Studios to scale up their content manufacturing

http://www.demandstudios.com/publishers/content/

And on their own site they talk about their workflow of: -

Pass search predictions to their algo
Run that through their ad revenue algo
Output a title
Have an outsourced army of content creators produce content to suit
Profit

Now sitting abusing the non-free wifi at my local soft play centre with Laura (I wasn’t paying the price they wanted so….) I cant help but start to work my way through the mechanics of this business model…

Article cost $15 (thats pretty high imo)
Copy Editor $1 per article (are you joking?)
Site overhead $1 per article (estimate)

So each article has to get a return of $18 to be in profit…
Hmmmmm

Now comes the fun part
If we assume a return of: -
17p per click
CTR of 2%
We need 5500 people to visit that article to get a return
Assuming they have a safety buffer of 1 in 3 articles that doesn’t pay back
We need 7500 people ish really to be safe

And we assume that they want a payback in 6 months max they need 42 visitors a day to that one article

Well thats possible with decent domains to start with and if that title choosing algo is reliable

Bear in mind that if it is the return per click will be far higher that my low assumption.

Interesting stuff….