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Vanishing Frontier: Online Premium
Content Pioneers Adapt to a Crowded Neighborhood |
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18 July 2005 |
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As the second decade of the Web unfolds pioneers in premium
Web content such as Amazon and Hoover's are adapting to
increased competition from a broadening array of online
premium sources. While still holding advantages as
well-regarded online brands, these content pioneers are
having to redefine the frontiers of premium content profits
on both their home turf and arenas more familiar to their
more established competition. There really isn't an "online
content market" but instead many opportunities to leverage
online and other channels for maximizing penetration of
business and consumer content markets. The
pioneers may yet cut some fresh new ground in the process
of responding to these challenges, but it's a race to do it
before the competition gets more imaginative. |
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Years from
now when we look at the history of content ecommerce on the Web
two pioneers will stand out in the definitive stories of its
evolution:
Amazon and
Hoover's. Amazon
formed the template for ecommerce on the shoulders of books and
other premium content and then extended their mastery to a
veritable department store of goods. Hoover's introduced the
world to ad-supported core business content and then pioneered
a stratified approach to providing it both in an ad-supported
model and a subscription model. We can talk about the strides
made by search engines and major consumer portals, but without
content from sources such as Amazon and Hoover's to feed the
hunger for key content the story of premium content on the Web
would ring rather hollow. In their wake of their own impressive
success has come the emerging success of countless services
worldwide that are emulating the key techniques that these
services have forged.
But imitation is not the most profitable form of flattery.
As Amazon turns ten it faces competition from all fronts that
have trimmed its margins. Wal-Mart nips at its heels with both
online and store presences, even as their signature efforts on
customer service and contextualizing goods are mastered by many
leading online stores. Hoover's, once the sole outlet for
detailed online business profiles, now competes with one-off
and online subscription sales from OneSource and others while
channel partner Factiva begins to hone its own online and
corporate business information strategy using content from
Hoover's and its parent Dun & Bradstreet. Hoover's continues
with its signature media-based content strategy but with a more
marked emphasis on converting online clicks into subscription
relationships.
In short, making premium content available online has
expanded beyond the original visions of pioneers who proved the
viability of the open Web as a content marketplace. The
companies that were playing catch-up with online content
pioneers are mastering the technology and the mindset necessary
to succeed on the open Web, leaving pioneers to consider how to
manage their growth pitted against companies that have muscle
beyond open Web channels. There is no longer, if indeed there
ever was, an "online market" for premium content: there is only
the content marketplace as a whole with a proliferation of
channels and sectors that require powerful and sophisticated
strategies to reach readers and users who are offered more
choices than ever for content and its delivery.
Fortunately pioneering players like Amazon and Hoover's are
still very powerful and able to define new common ground with
traditional outlets and to carve out new opportunities where
traditional companies fear to tread. Here are a few things that
content companies "born on the web" should consider to breathe
easier in a congested market:
- Develop broader visions for
packaging and fulfillment. Search engines limit the value
of distribution partners for enhancing content revenues
online: a click that could go to a partner such as Yahoo!
could just as easily go to one's own site. Instead online
content providers need to think more aggressively about which
channels and venues beyond an online browser can provide
premium income. Amazon is moving into print-on-demand
services, which could open the door to "bricks" solutions.
The logical move would be to partner with or to acquire
Starbucks to provide a new kind of upscale "in the flesh"
content delivery experience that builds margins.
Hoover's provides an excellent online interface but can move
beyond the browser into packaging content into better formats
for offline presentation, analysis and workflow integration
as a premium service. Instant Powerpoint slides, anyone?
- Redefine the value of "the long
tail." Many of the premium content pioneers tend to stick
to traditional sources of content for core revenues, while
ignoring the ocean of content developed on the Web itself. "The
long tail" of traditionally published content will never
keep up with Web content, creating opportunities for
aggressive content packagers to create premium value from
repurposed Web content. If I were interested in a particular
topic would I like to mosey down to my local Starbucks to
pick up a custom-tailored book packed with the best of the
Web and traditional sources on that topic? Could be. If I
were a salesperson would I love to have a summary of not only
the latest analysis and financials on my competitors but as
well the latest updates to their Web sites? I'm thinking so.
Keeping one step ahead of publishers still wrestling with
what constitutes "legitimate" publishing can offer "born on
the Web" content outlets a long-term advantage for content
breadth and depth.
- Don't forget media strategies.
It's worth noting that ad-funded portals such as Google and
Yahoo! are becoming more adept at integrating premium content
sources into their product mix. While feeding these sites is
one logical choice, the broader question may be whether a
more media-oriented presence may not provide more
"stickiness" to sites that are trying to compete with both
media outlets and premium content purchasing channels. If
Wal-Mart can have its own captive lifestyle magazines,
there's no reason for Amazon not to think about repurposing
books, catalogs and other online content into its own media
presence. Hoover's has its own editorial team and
retains ads in its Pro subscription package, so it's more a
matter of where and how those resources are deployed. Is
there enough timely information gleaned internally by
Hoover's to put out focused and highly credible "business
pages" that can be picked up by news search engines and
premium news services? Worth thinking about.
When pioneers in the early western
frontier of America started to see smoke from neighbors'
chimneys, many decided that it was time to move on to fresh
territory. The territory in today's content marketplace that's
freshest is found not so much in unexplored media as it is in
the imaginations of content providers willing to look at
familiar ground in new and profitable ways. Imagination as a
frontier tends to favor those most willing to let go of tried
and true models - even if they seemed like pioneering efforts
not so long ago. Time to hunker down and think broadly, folks;
if not, the competition will.
-
John Blossom
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