There is a growing debate among media pundits and economists alike about the inflated valuations of tech companies like Groupon and Facebook.  These voices have raised the specter of a new and potentially bigger tech bubble developing.  Facebook, Google’s YouTube and other Web 2.0 giants have all pioneered business models based on user generated content—not professionally produced content.  Psychster’s recently posted study looks at the effectiveness of online video content in relation to production values.  In short, the study asks the question:  do web users engage with professionally produced video content more than they do with cheaper content?  Why is this important?  Lets back up a little and look at how video on the web has evolved over the last decade.

The collapse of the first tech bubble can partly be blamed on the limited bandwidth available to most Internet households prior to the millennium.  Remember–dot coms were basing their future value on their ability to deliver premium streaming content like music and video over the Internet directly to homes and businesses.  It was hoped that delivery outlets like MSNBC, AOL and others could underwrite that content with premium advertising dollars.  Remember that AOL purchased the content heavy Time Warner in 2000.  Time Warner didn’t purchase AOL.  Ultimately this model proved untenable without widespread adoption of broadband connections.

Fast-forward to Web 2.0 and the times and the technology have certainly changed.  But how much has really changed?

Today broadband connections are common and compression formats for online video are much better at shrinking the size of video streams without sacrificing too much fidelity.   With the advent of YouTube and Vimeo as distribution streams, the amount of video streamed to users has skyrocketed.  As a result of the low barriers to both producing and delivering video on the web, a new industry has emerged–content farms.

Content farms are companies that create very low cost media on popular topics for websites.   Companies like Demand Media have built a business model around delivering cheap content to sites that drive page views and presumably advertising dollars.  Content farms deliver all kinds of media–crowd sourced journalism, cheap photography and lots of cheap video.  Even the venerated Huffington Post might be considered a kind of content farm.  Most blog posts on “Huff-Po” are written for free by citizen journalists.  This business model has been great for the owners of the sites.  Recently, the Huffington Post was sold for a hefty 315 million dollars.  The purchaser?  Wait for it…AOL.

Critics of the content generated by content farms usually talk about how poor the quality of the content is and how low the pay is to produce that content.

For content creators, content farms are a nightmare.  You would think that the demand needed to populate these sites with content would mean more work for professionals.  The exact opposite has happened.  Content farms leverage the idea of crowd-sourced media by using amateurs or neophytes to produce relatively low quality content.  The pay is appallingly low so professionals can’t compete with their normal fees.   Content farms don’t really have an incentive in investing money into premium content because their audience isn’t really downstream viewers.  Their first target is the search engine analytical algorithms.  Content farms use search engine data found for free on sites like Google Trends to find popular search terms.  They use these firms to create targeted low-cost content and they place that content on websites where they will garner page hits.  A page hit to the naive marketing exec is the (unreliable) measure of eyeballs looking at potential ad-banners.

The process has become so widespread that Google recently e-jiggered its super secret search algorithm to reduce the likelihood of well-known content farms rising to the top of search queries.

Video from a content farm for eHow.

So where does the Psychster study fit in?

Asked why Psychster initiated the study, study architect, Psychster CEO and MCDM faculty member David Evans explains: “Allrecipes came to us with a simple, elegant research question: If they spent more money to make their how-to videos more glitzy, would would they be watched longer and liked more? Or in the age of YouTube could they be done with amateur cameras, lighting, and editing – and be just as watchable?”

The study itself is fairly complex.  Psychster teamed up with Allrecipes.com to poll a little over 6,000 people.  The study asked them to watch three videos on subjects chosen by Allrecipes.com.  The videos were on one of three topics:  how to boil an egg, grilling pizza and brining poultry.  Survey respondents received one of seven variations on one of the subjects.  The seven variables went from amateur quality to highly produced.  The survey them measured how long the respondents watched the videos and then there ratings of that video.

One of the “better” produced videos from Allrecipes.com.  Note the music and the snappy editing.

Once all of the evidence was sifted, the Study found that indeed there was an increase in how long people watched videos that correlated directly to the quality of the video…up to a point.  In short, people spent more time watching well produced videos than they did watching poorly produced ones.  But the attention leveled off when production values ventured into really slick or videos that could be considered “over-produced”.

According to Evans, after the results were analyzed, “We were struck by the dramatic increase in watchability as you climbed from rank amateur to mid-level professional quality. People watched the 3-minute videos almost 30 seconds longer. You don’t need statistics to confirm that was significant. But beyond that, Allrecipes was right, they didn’t need to spend any more on expensive effects. Ultimately the results helped them calibrate the quality of their videos to their users’ expectations and get the most for their money.”

For media creators and creative agencies, this study could be very important in convincing clients and publishers to spend a little more on their content. While page views are one metric, measuring attention is another potentially more powerful gauge of someone downstream engaging with your content and then clicking on your ad.

Will this change the industry back to the days of lavish commercial budgets with inflated per-diems and Spielberg effects?  No. And ultimately that might not be a bad thing.  But it will be a shame if the many talented and industrious film and video makers out there who are struggling to compete with farmed content leave the industry and never come back.

photo:  Wendy North

You can also see Chris’ other amazing works  at Rock/ DeMent gallery in Pioneer Square through the end of October.