 |
|
|
Models for Success: 2005 Ushers in an
Era of Major Shifts in Content Business Models |
|
|
|
|
|
|
|
3 January 2005 |
|
|
|
|
As the year 2005 rumbles into view the prospect is for a
time in which the rubble of old business models that began
to come tumbling down in 2004 is pushed aside to make room
for new business models that span old categories and define
highly profitable niches where profits were never imagined
before. Shore sees four key areas in which the
rapidly shifting action will unfold in creating and
expanding these new models: cooperation, commercialization,
containerization and consolidation. There's a model
for success for many as this year comes to fruition, but
success will go to those who are willing to align
themselves with revenues from new models as quickly as
possible. |
|
The last of
the confetti and discarded party favors has been swept up and
the stale champagne poured down the drain: 2005 is here.
Welcome to a year that promises to be filled with even more
changes for the content industry than 2004's momentous
breakthroughs. As noted in last week's
year-end review the
Shore team is assembling a multi-faceted look at the year
ahead, but for now let's take a look at Shore's major theme for
2005: "Models for Success." In 2004 we watched the "walls come
tumbling down" as new and reconfigured players asserted
themselves in professionally-oriented content. Barriers
crumbled between publishers and the content and technology
partners that are succeeding where many traditional providers
have stumbled or stalled, creating opportunities for new and
more potent business models to assert themselves far more
aggressively than ever before. Vendors who were afraid about
what was on the other side of the wall have been watching the
dust settle over the last year and discovering that there's a
big pile of money sitting in the rubble of old business models,
money that's being picked up quickly by those who are less
concerned about maintaining old empires and more concerned
about having their fair share once the scramble is over.
Getting one's fair share of realigning
spending patterns as business models for content suppliers
shift rapidly will be the key to success for vendors of
professional content and related technologies in 2005. Profits
may prove to be outstanding for a few select players already
setting the trends for shifting business models and fair to
middling for others who are catching up, but the true victors
will be less those winding up with comfy profits than those
companies that are willing to position themselves aggressively
in 2005 for healthy chunks of overall market share and "share
of wallet" from institutional and individual clients in rapidly
changing markets. Those flush with revived online ad revenues
who are milking their old content cows more profitably may find
themselves wishing they'd been less contented by year's end. In
institutional markets aggressive publishers and aggregators
will be taking a fresh look at infrastructure providers and
partners and determining what the likely limits of their value
proposition are going to be moving forward as software and
systems providers position themselves increasingly as "content
service providers" for institutional clients. For individual
purchasers of content in professional environments share of
wallet both competes and blends with consumer-oriented content
purchasing and consuming patterns, creating opportunities for
vendors to extend their business models to take advantage of
these merging environments
In the midst of this scramble to deploy
new models for success Shore sees four "C"s being of particular
importance in guiding professional content suppliers and
implementers to come out a winner in the 2005 formula for
producing valuable content:
- Cooperation. As so many new
models for success have migrated from the control of major
publishers and aggregators to new suppliers of content value,
pure power plays are going to be few and far between in 2005.
Content value is increasingly unchained from specific
platforms and technologies in most instances, making specific
technology alliances very fluid instruments in a greater
model. Getting a strong share of wallet is going to require
building more sophisticated networks of cooperation with
customers and other suppliers to deliver value to
institutional and individual clients in as many contexts as
possible. All-singing, all-dancing proprietary content vendor
interfaces and exclusive distribution are "out": being
able to deliver information built to "just-in-time" custom
client specifications, facilitating the collection,
distribution and linking of content from individuals and
institutions and providing content through any and all
distribution channels desired by a wallet-holder are "in" -
especially those that build upon the search and aggregation
tools which enable users to create content value on their
desktops and in portable devices. Cooperation will also be
required to address the proliferation of multimedia content
that is becoming a greater part of the professional content
mix, with audio, video and animated presentations becoming an
expected component of services once devoted to text and
numeric content.
- Commercialization. With the
boom of online advertising and the proliferation of "rich
data" enhancements to publishers' Web sites in 2004 more
content vendors are recognizing that relying on "safe"
revenues from aggregators servicing professional markets
leaves a lot of money on the table that makes consideration
of new and additional monetization models a must. The wary
stance taken by many publishers as outlets such as Google
pushed head-on in 2004 with fearless new ways of monetizing
content underscores the need for content suppliers of all
kinds to leave no money on the table in 2005. This no longer
means just established premium content suppliers: as
individuals and institutions use tools such as weblogs to
deliver more high-value content to professionals, premium
content providers are competing with more self-styled
publishers and distributors than ever before. 2005 will be
the year in which the playing field for content
commercialization will be leveled as never before, rewarding
those suppliers that respond aggressively with
supplier-agnostic monetization and payment solutions and
punishing harshly those who fail to leverage their existing
monetization capabilities into new channels of value
creation.
- Containerization. Content is
increasingly neutral as to the venues in which it appears to
its users, with venues such as peer-to-peer networks, RSS
feeds, XML-based Web services, eBooks and portal-driven
intranets emphasizing the value of content that flows easily
from venue to venue at the behest of subject experts, content
enthusiasts and content technologies. 2005 will be the year
in which many suppliers in the content value chain will be
looking very carefully at how their content can retain and
enhance its value and monetization opportunities as user
interests and needs carry it from venue to venue by using
standardized digital "containers" to deliver, track and
enhance its value. The breakthroughs experienced in the
consumer sector with rights management packaging for
entertainment content and the parallel success of rights
management for protecting sensitive institutional content
will not likely inspire parallel breakthroughs for
rights-protected professional content in 2005, though.
Instead there will be more emphasis on adapting existing
delivery systems and venues to create content packaging that
will support the tracking of both intellectual property
rights and opportunities for content monetization.
Professional content will be playing "catch-up" with its
consumer and institutional brethren in this arena, but will
benefit from the lessons that they've learned in the process.
- Consolidation. While innovative
content and content technology companies are proliferating
again, key parts of the story of content in 2005 will be
written by companies that are able to absorb and
convert content from behind-the-times suppliers into more
efficient and profitable services and venues. Many journal,
newspaper, database and magazine publishers that failed
to anticipate the rise of online production and delivery in
2004 as the irrevocable center of future profits will
scramble to fold themselves into more aggressive business
units or radically streamline their current operations to
shift from being title-centric fiefdoms to client-centric
content packaging and repurposing machines. Major publishing
conglomerates will accelerate the rationalization of their
lines of business to cull out business units that no longer
fit in with refocused core missions, oftentimes leaving
long-honored titles and products in their wake as they divert
resources to capture market share via new channels and
business models. Search engine providers and aggregators that
have failed to diversify their strategies to account for the
rise of content that spans both public and private venues
will struggle to keep up with more agile players, resulting
in buyouts and fold-ins into stronger players more in line
with
The New Aggregation.
All in all 2005 promises to be an exciting year, one in
which the prospects of leading
vContent companies embracing diverse and innovative
business models will shine brightly as old stalwarts learn
quickly how to shift their models to where the money is
collecting in the emerging landscape of the content industry.
Let's hope that we're breaking out the bubbly a year from now
to celebrate the year in which professionally-oriented content
not only "got it" but went and got the money on the table.
-
John Blossom
To top of page
 |
