Aug
22
Telling the Truth about Content
Filed Under Blog, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, social media, Uncategorized | 2 Comments
Here on the South Shore of Nova Scotia, where I find myself in annual joyous residence, we are all fairly laid back about the big issues that seemed so front of mind in frenetic London. Let the market decide (a good philosophy if you have a strong economy based on extracting much-needed natural resources, and well-regulated banks that stayed upright when the rest of us fell over) seems to be the order of that day. Nova Scotians do not appear to panic easily so the absence of crisis-creating media exposure is part of the joy of being here. And being in Canada I have revisited the excellent website of the Toronto IP lawyer James Gannon. And I would in particular recommend to anyone the masterly satirical essay entitled “How I Learned to Stop Worrying and Love the Copy “. (http://jamesgannon.ca/2011/04/15/how-i-learned-to-stop-worrying-and-love-the-copy/).
Towards the end of his piece Mr Gannon quotes Michael Geist as saying “The truth is that you can compete with free if you provide value” and this simple statement has been giving me pause for thought as I walk the beach on my morning constitutional. What is it about this simple statement that has proved, in the last 30 years, so very hard to understand in the pre-internet content industry? We have, after all, a superb communications pipeline at our disposal, and it efficiently allows us to source all pre-existing media content through that pipeline. Those who do not wish to communicate in this way would be wise to withhold their content entirely from the network, since if they do not then one of two things will happen: they will be marginalized by competitors or, if the content has interest or relevancy, “outed” into the open web and illicitly re-used for free.
So “content” for its own sake is not a valid business model anymore? I think this is true now and will become much more obvious as time goes on. This is why putting firewalls around things only creates a temporary windbreak, not a permanent end to the forest fire. The valid business model is now service, and if we pitch the service solution correctly then we get adhesive customers, renewable revenue flows, and distance ourselves from that commoditization of content that increasingly afflicts the content value model. In fact, we should struggle to make our content available as widely as possible, implanted in our customer’s web environment, and maintained as a constant reminder of the tiered service value we can add. Tiers of service which begin with the App, and move forwards through customization and personalization of content to customization of analysis and focus. And that ziggurat of value is a climb where we cannot slacken for a moment, since competition will be fierce, and where we can never quite glimpse the summit, since value requirements will change over time.
Quite soon in this process much of the underlying content which we are so busily trying to protect will become a shadow presence, referenced and referred to but seldom read as such. Its presence will be taken for granted and content derived from the network process itself will assert its importance. As we move to this point it will appear absurd to be worrying about the underlying ownership status. I was reminded of this when looking at Amazon’s social reading initiatives, which seem to have edged into the market earlier this year without much public comment. This development (https://kindle.amazon.com/) competes with Amazon’s own Shelfari acquisition, and sites like Goodreads or Library Thing. If you were a publisher of general consumer books, surely this is the value point at which your acquisition policy would be focussed? And once you had readers who recorded all of their purchases and shared them with others on your site, including your books as well as your rivals, and you opened up the site to allow users to make comments on what they are reading, add footnotes, review, argue and correct, and then (as Amazon has done) you connected all this to Twitter and FaceBook, or in education to emerging social spaces around rentals like Chegg, then you are beginning to climb that value chain.
And then comes monetization. Some service values will be select, minority interests with strong membership and therefore subscription characteristics. Others will be populist, sponsored or maintained through online advertizing. The value we will seek to protect here is the service value, usually a function of underlying software and the way it works on content. And between visits to the patent courts to try to secure the unsecurable for 15 years, we will keep enhancing, changing, building the customer experience and competing through our ability to analyse the user experience and improve it.
Publishers used to do that last bit very well. They could do it again if they would relax around the content and follow the game. At the moment who do you see emerging on top? Amazon or one of their major publisher suppliers? No comment on that from my end of the beach, but you can always see who is winning by their willingness to be reasonable and offer concessions to the flagging pack following them.
Comments
2 Comments so far
Well said. It’s tough to get publishers to let go of the content when that alone has made money for so long and the transition to a service model can be painful — for editorial, marketing, management and everyone else involved in the business. The overall assessment is spot-on and those who won’t change are already being left behind.
According to Wikipedia (and therefore it must be true) Bill Clinton’s autobiography received a record advance of $15m. Assuming it ran to
100’000 words this equates to $150 per word written. It sold 2.25m copies and again assuming an average price of $25, allowing for two for the price of one at Tesco’s , generated revenues of c$56m for the publishers, equivalent of $0.00025 per word sold.
By contrast the average Sunday newspaper contains 560,000 words (according to Yahoo Answers! So I’m open to challenge) and following the demise of The News of The World , The Mail on Sunday is the highest circulated Sunday paper in the UK (according to ABC via nmauk.co.uk) with
c2m copies a week at a cover price of £1.50 or £0.00000027 per word sold.
By further contrast the Harry Potter series has sold in excess of 400m books and spawned a global franchise worth in the region of £5-7bn. So what if anything does this tell us about the economics of content?
Well I would suggest that assessing the value of content can be difficult, in doing so a complex equation of provenance of source, relevance and pertinence to the consumer, social and market trends and Zeitgeist combine to establish a market price. I have deliberately excluded control of the distribution channels for content, which may in the past have given publishers power to set prices but increasingly will be the refuge of last resort for publishers who fail to respond to their customers needs.
In my view personalisation in it’s fullest sense is the future of content. As a consumer I want to access content that is relevant and pertinent to me and in a way that I can use it most effectively. This is not a mere extension of cookie technology, or preferences, or indeed Google Analytics, but a future based on an understanding that I have multiple personas and each persona will consume content differently.
At work I will need content to inform the decisions I make and to keep me informed of latest trends and developments pertinent to me and my role, in my personal life I will consume content for leisure, decision making and educational purposes. And of course in this future I will create content of my own.
To achieve this requires a new contract to be struck between consumers and content producers. The level of intimacy required to fulfil this vision cannot be
achieved without the creation of trust between the individual as consumer and the organisation as provider beyond that which exists today. Consumers need to have confidence that by sharing detailed requirements of their needs with providers they will only receive content and tools that are relevant and pertinent to them. Providers in return need to ensure that they provide the most relevant and accurate content available, regardless of source, to the consumer in the format that the consumer has indicated they want to receive
it.
Some 15 years after the commercialisation of the Internet it is not surprising that supply and value chains are still evolving. It’s also not surprising that organisations are trying to recreate on line supply chains that protected them from competition off line. But if we have learnt anything about the Internet and it’s potential to change the world, it has to be in it’s ability to generate value from collaboration and co- operation between producers and consumers of
content. Therein surely lies the future for content.
a price the market is prepared to pay.