Technology Vs. Publishing
I was struck by this Headline on Tom Foremski’s blog
“The publishing industry is the new technology industry”
I suggest you read all of the pieces above. There are two points here: One which I have made in a previous post and the other which I think is a really important debate topic for the online content industry.
1. We are in the early stages of a new phase of our industry where many more layers of the technology industry have commoditized. If we can think of a previous era where the microprocessor commoditized and the OS commoditized and then value moved to the app layer. Now the hardware, OS, apps infrastructure and browser have commoditized and the value moved to the content. This low cost technology platform is revolutionizing the content/publishing industry very rapidly as it radically lowers both the cost of distributing content AND the cost of creating content. The value going forward is in the content and publishing and not the technology used to create it. Think about companies such asYahoo and Google running on commodity servers and OSes and companies like Vistaprint revolutionizing the printing industry in similar ways to the way Dell revolutionized the PC industry.
2. The key question in this new industry is whether more value is being created at the level of filterers/aggregators or content creation. Clearly in these early days, the aggregators are out ahead. Seekingalpha, the financial content aggregator, just took a Forbes Best of Web award; techmemeorandum, the blog conversation aggregator, is a must read for all technology people; and our portfolio company Metacafe is growing by leaps and bounds as are their competitors Youtube and Revver (and check out techCrunch’s review of FireAnt). But licensing and rights issues are coming to the fore and differentiation may require more content creation. Also, unique content that can develop an audience has big advantages as a stand alone business although it may be less scalable.
This quote from Foremski’s blog is salient:
“The first wave of technology-enabled media companies are corporations such as Yahoo, Google, AOL, Amazon, EBay, and Craigslist. They publish pages of content and advertising. Except that most of their content is obtained for as low cost as possible; it is harvested by servers and algorithms or their content is contributed by their communities of users, such as at EBay or Craigslist.
Content can also be spidered from other sites, collected, and spun into an index. Publishing the index provides Google and others with cheap content, much cheaper than the New York Times using its journalists to produce a page of content.
[BTW, my web site is spidered by 17 bots every day (a number that is increasing.) The bots suck up one third of my bandwidth and deliver about 5 per cent of my traffic. More than 90 percent of my readers come direct, they know where I live, which is a great position to be in and not have to rely on search engines for traffic. The bots slow down my server, so that means they must be slowing down the internet experience for millions of people as they visit sites like mine. I wonder how long that situation will last.]
Yahoo has tried to produce its own content in the past, such as its financial news channel, which was scrapped. And more recently, Yahoo has tried again and hired editors such as Patrick Houston from Cnet, to create some content in-house.
By and large, this first wave will give way to a second wave of technology-enabled media companies because of the effect of what I call “you can’t get there from here.” (This is a characteristic of all important transitions in industry.)”
[Originally published on 26th January 2006 by MIchael Eisenberg]