Can a content business scale on the Internet?

That’s the question that’s bedeviled an uncounted number of start-ups, and established businesses, in the decade and a half of publishing’s Internet era. While many individual writers and small, community start-ups have found their way to ramen profitability online, big businesses (and aspiring ones!) continue to look for the formula that consistently allows them to build large-scale, national chains of profitable content-driven publications online, as companies such as Gannett and Scripps did with printed newspapers in the past century.

Two recent events involving AOL have brought this question back into my mind. The first was the leak earlier this month of The AOL Way, a strategy for the company’s writers to develop more (and more popular) articles on its various websites.

Critics derided the strategy as reducing writing to mere formula, with some comparing AOL to Demand Media.

Later this month came the second event, as AOL bought Huffington Post and appointed HuffPo founder Arianna Huffington to oversee AOL’s editorial operations. HuffPo’s given its share of critics the vapors, too, including the LA Times’ Tim Rutten who derided HuffPo as “a galley rowed by slaves and commanded by pirates.” (FWIW, HuffPo pays for its wire feeds of content from other news sources, just as the Times and other newspapers do. It also pays a staff of professional reporters, in addition to hosting blogs written by readers.)

So let’s revisit the question: Can a content business scale on the Internet? Can you run a large-scale, profitable news publication online? And if so, does it have to rely on hard, search-engine-friendly formulas or free writers to survive?

Writing begins as a personal act. An individual summons words from within his or her mind, then puts them to paper, voice or screen. That’s why I believe that seeing formulas put to screen enrages some writers. But unless you want to sound like the raving outcast on a random street corner, at some point a writer needs to employ some basic conventions to ensure an audience understands what you’re trying to say.

In that respect, all effective writing employs formulas.

Newspapers have been demanding formula writing from their reporters for generations: inverted pyramid, AP Style, citation rules, etc. Part of this demand lies in the desire to communicate effectively with a broad audience. But much of it also comes from a need to standardize production. Copy desks need consistent writing style from reporters so they can effectively edit large numbers of stories in a limited time. Wire services demand consistency in style and presentation so that articles can fit into a large number of publications.

Anyone who’s tried to crank out the copy for a daily paper knows that you can’t bother channeling your inner Faulkner (or inner Christopher Nolan, for OJR-reading movie fans), if you want hit your mandated byline count. You’ve got to stick with the formula.

So it’s no surprise that AOL would have wanted to play by those same rules. It just bothered to make those rules explicit for its growing army of writers.

There is another way to build a large online publication, however. And to do so in a way that allows individual writers to maintain more distinct voices. It’s the model employed by massively popular (and profitable) sites from Slashdot to Daily Kos to, yes, Huffington Post.

It’s to envision your site not as a top-down, centrally edited publication but as a community of individual voices.

This approach does not prevent site editors from influencing the direction, or even maintaining control, of the publication’s overall voice. But it does allow individual voices to publish without the hands-on editing of a higher-up in the organization (though members often have to abide by stated community rules, and in the case of HuffPo, get an invitation from an editor before being allowed to post.)

But is a free model fair to the people who write for these sites?

Personally, I find that question incredibly condescending. People aren’t idiots. If they don’t see themselves getting value in return for what they write on a website, they won’t write.

Thanks to Nate Silver, we now have a rough estimate of just how much hard-revenue value an individual blogger brings to HuffPo. And it ain’t much.

Silver demonstrates something that I’ve seen for myself in tracking the analytics on my websites for years: That pages revenue on websites adheres to a basic power law, and that per-page revenue diminishes sharply beyond a relative handful of high-earning pages. For most pages on a website, each individual page is worthless from an ad revenue perspective.

For both the writer and the publisher, value is found not in the ads served or clicked on those pages, but in the community surrounding them. For readers and contributing writers, their reward is being able to read and be heard within the community. For the publisher, the community creates a critical mass that creates ad and sponsorship value for the collection of its pages greater than its individual pages could leverage alone.

Don’t fall into the trap of seeing these writers as “free.” If a publisher isn’t cultivating a community of value for these writers, no one will submit a thing.

Of course, publishers can use community building and formula writing to create value. But I believe that community building offers one other huge advantage over simply employing an army of live or automated formula writers – it’s not nearly as dependent upon search engines to drive traffic.

Take Demand Media out of the Google search engine results, and where would that company be? (Hint: Getting less traffic than an old “All Your Base Are Belong to Us” photo mashup.) By contrast, take DailyKos out of Google, and would anyone even notice?

Communities drive their own traffic. They protect and cultivate individual voices. They create value greater than their individual parts. All reasons why, again, journalism leadership in the 21st century needs to move beyond the poorly-scaling editor-centric model and instead embrace the methods of community organizing.

Yes, content businesses can scale online. But only so far as the communities supporting them grow.