It’s been a tough year for many high-profile startups-but one with valuable lessons about how to produce and use online content.
Among the recent spate of dotcom layoffs and company failures, big content-focused sites have taken some of the worst beatings. Webcaster Pseudo Networks shut down in September, laying off its entire staff of 180. Crime news site APBNews laid off most of its staff last summer, putting 140 people out of work. Around the same time, CBS, Salon.com and Oxygen Media all laid off online content staff. The previous May, broadband content company Digital Entertainment Network handed out pink slips to all 150 employees and closed its doors.
After a year like this, you might start to wonder whether offering quality content on your site is really such a good business idea after all. If these high-profile startups, loaded with talent and backed by tens of millions of dollars in investment capital, can’t make a go of their well-crafted ideas and words, then who can?
Don’t be fooled. What’s really going on here is that Web companies are realizing online content alone can’t support a massive editorial payroll. Instead, content production teams need to start small, growing gradually as online revenues grow.
In fact, the size of your content staff may need to be more tightly tied to revenues than that of any other online team. The reason is that content, with a few exceptions, tends to have a short shelf life and quickly goes stale. A big investment in content today will produce returns immediately-or not at all. It’s more important to keep a steady stream of fresh content appearing on your site than it is to have a large archive or many separately staffed channels. Fresh information will keep users coming back; a large archive appeals only to the occasional visitor.
It’s a lesson that’s as applicable to e-commerce sites and clicks-and-mortar ventures as it is to pure content publishers. For example, look at the success of REI.com (www.rei.com), the online arm of outdoor and sporting goods retailer Recreational Equipment Inc. REI.com comprises three separate sites (including a Japanese site at REI.co.jp and a discount site at REIoutlet.com), which have a combined 45,000 pages of editorial and catalog content. All of that content has been produced since the first site’s launch in 1996 by a comparatively tiny staff of writers, editors and designers, now numbering about twenty people. That’s a small slice of REI.com’s entire staff of 140. But it hasn’t hurt REI.com’s standings; the site consistently draws millions of visitors per month and boasts a conversion rate around 10%, according to Matt Hyde, vice president of online sales. Hyde attributes much of that success to the site’s content, which combines seasonal features about outdoor activities with relevant product descriptions. E-tailers, take note.
In fact, some of the most successful and long-standing Web content sites have been produced on shoestring budgets with skeleton staffs. For example, a tiny staff of two or three editors and a small army of occasional freelance contributors have produced the popular satire site Suck.com (www.suck.com) since its inception in 1995. Likewise, Feed Magazine (www.feedmag .com), which was also started in 1995, has taken a similar approach, keeping fewer than 10 editors on staff for most of its life. Much of the site’s content comes from a large body of distinguished freelancers.
Both Suck.com and Feed Magazine, despite their small staffs, have been able to produce high-quality, award-winning content, and as a result have attracted loyal audiences. The payoff came this year, when the two (along with pop-culture database Alt.Culture) merged. The combined entity, Automatic Media, won a tidy $4 million in venture capital-enough to keep the online magazines going for quite awhile, thanks to their low burn rates. At the same time, the merger lets the sites reap additional efficiencies by sharing infrastructure, administration and ad sales staff.
Even AOL’s editorial director, Jesse Kornbluth, is a firm believer in keeping content staff as small and scalable as possible. Ever since last spring’s stock market shakedown, Kornbluth says, content producers have been under pressure to produce results. “Losing money to IPO is no longer fashionable-now you have to have a real business,” says Kornbluth. “New Economy companies are being judged by old economy standards. That means that bloat is out.” The answer is to start with very low overhead, keeping permanent staff to a minimum. Add to your staff only when your revenues can support a larger payroll.
The bottom line: Concentrate on keeping your site’s content fresh, and do so with the smallest practicable staff. Otherwise, when your CEO starts to demand bottom-line results from the online team, you may find yourself in the unenviable position of having to trim a bloated content staff.
Dylan Tweney is an award-winning technology writer in San Mateo, California. His Web site is www.tweney.com.
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