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Cleared for Takeoff: Aggregators Large
and Small Focus on Scale that Matters |
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2 May 2005 |
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Just as Boeing and Airbus are vying for air supremacy with
different visions of how to give airlines the most value in
routing their passengers through the skies, publishers and
aggregators increasingly find themselves having to choose
between working with ever-larger forces of content
aggregation and more direct routes to very specific
audiences. Scale matters in today's aggregation, but as
much as large-scale search engines and aggregation services
are winning many markets with efficiently collected and
targeted content, more direct routes between publishers and
audiences are gaining in popularity. Choosing what scale
you want to play on is more important than ever before,
leaving less and less middle ground for publishers and
aggregators to have it both ways. |
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I am in Boca
Raton, Florida this week at the spring meeting of
American Business Media, an easy direct flight from New
York airports. That "direct" part is important to me, because
I've seen one too many jetways rolling away from what was
supposed to have been an easy connection. The gradual
disintegration of "hub and spoke" routes for economic air
travel raises no tears in my eyes and is raising the hopes of
Boeing, which is taking orders at a fast and furious pace for
its new
787 "Dreamliner." The 787 is a highly efficient new
plane of moderate capacity designed to support both long- and
short-haul flights between hundreds of destination pairings
that would otherwise be uneconomical - like St. Paul, Minnesota
and Singapore, for example. By contrast Airbus celebrated
the maiden flight of its new
A380 jumbo jetliner this week, a gigantic new plane
creating economies of scale so large that only a dozen or so
airports around the world will be able to handle its weight and
size any time soon. Two different visions of creating value
through aggregation of flight services, each in their own way
destined for some measure of success.
From the perspective of publishing the alternatives for
success in aggregating content are lining up similarly to these
new air travel options. The "jumbo jets" of content such as
Elsevier and
Thomson are reporting happy earnings and industry outlooks
lately, even as Google and Yahoo! continue to thrive on the
open Web with large-scale content plays designed to serve the
masses. Big is still beautiful in many instances. But many of
the most significant changes in publishing are coming from
those who are able to use scale in a new way to link together
widespread content sources and audiences far more directly than
ever before. Weblog news feeds in XML formats such as RSS are
being used by both major news outlets and new sources of news
and commentary to distribute news and headlines, giving birth
to services such as
Findory
and Rojo
that make it easy for users to filter specific news and weblog
feeds for items of specific interest and to organize them
collaboratively with other readers. Small and direct can be
beautiful, too.
In
The New Aggregation scale is still an important
factor in creating content value, but increasingly it's a much
more personal scale that focuses on the on the immediate
demands and perspectives of highly specific audiences that goes
toe to toe with the big outlets. It's a great environment for
those who can define services that scale properly - and
miserable for those whose concept of scale is caught between
these the all-serving and the highly focused. Here are a few
thoughts about scale and publishing services that may be worth
keeping in mind as the big get bigger and the small get
nimbler:
- Choose your scale and excel in it. As in air
travel and many other business sectors, being in the middle
is not much fun these days and publishing is no exception, as
exemplified by
softening sales of ads in U.S. national-edition newspapers.
Before electronic distribution on the go became as ubiquitous
as hot spots at Starbucks these efforts made sense, but in
most markets they are anachronistic. At the same time
newspapers that are focusing their online efforts at more
input from local audiences and more locally tailored online
editions such as Boston.com and the newly announced
Washington Post local online edition are seeing very
favorable results overall. If your marketing mix is looking
flabby given the economies of scale that favor tech-centric,
large-scale aggregators then "get over it" as soon as
possible and focus on bringing together specific audiences
who identify with your brand's sense of community and that
your brand can encompass more efficiently.
- Match your margin expectations carefully to new
economies of scale. It's worth noting that the advent of
the new Boeing and Airbus planes aren't necessarily going to
lead to fluffy featherbed profits any time soon for airlines:
they are instead survival mechanisms that will allow the
strongest players to compete in a world in which
hyper-efficient pricing is demanded to keep up with fliers
who are a click away from a better deal. Similar pressures
confront publishers who see the packaging of their wares
stripped away by aggregators and institutional portals,
making the supposed uniqueness of their brands a suspect
lever for enforcing comfortable margins. The top line of
publishing is enjoying a comfortable time at the moment for
many but expecting to be able to enjoy the bottom line
without aggressive R&D investment is a moment to breathe that
most publishers and aggregators cannot afford to take just
now.
- Don't forget that your customers are aggregating,
also. The top end of air travel is being hit by an
increase in on-demand private jet services in many forms that
are taking harried executives and their families away from
the airlines altogether. Similarly major institutions and
individuals are learning how to aggregate content from
premium sources and to extract it from "raw" sources far more
effectively than ever before. Business publishers in
particular need to make their content more valuable in
environments where institutional clients are willing and able
to pick and choose the sources that matter to them more
directly and specifically. While this may still play into the
hands of major aggregators for some time to come, more alert
and adept publishers will learn how to scale for more direct
relationships with their institutional clients one click at a
time.
With more high-power technology in the hands of individuals
and institutions than ever before it's a more balanced approach
to servicing users empowered as highly effective content
consumers and publishers that's shaping much of the future of
the content industry. We'll be seeing major aggregators out
there for some time as surely as A380s will be rolling down the
runways of Heathrow and Narita for years to come, but
increasingly they'll be limited role players in a content
marketplace that favors the direct collection and
contextualization of content wherever possible. May you never
have another connecting flight as long as you live.
-
John Blossom
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