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Outlook 2007 Preview: Reality Checks
for New and Old Forms of Publishing |
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2 January 2007 |
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With the confetti from New Year's celebrations barely in
the dumpster the hangover from a heady 2006 weighs heavily
on the minds of many content services providers. The pace
of change for content producers in 2007 doesn't promise to
slow down a whit - and in fact is likely to gain steam as a
stalling economy promises to push slow-to-change publishers
off the stage altogether and to accelerate the shift to
electronic revenues. Our preview of our full-blown Outlook
2007 focuses on six key "A"s for the new year: Audience,
Aggregation, APIs, Alternatives, Acceleration and Asia. |
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The fireworks for our town's
New Year's celebration were splendid this year, a joyous
celebration of new beginnings to fuel our hopes for a great
2007. But although the stroke of midnight can hold out hopes
for unlimited possibilities in a newly minted year, the dawn
comes and reminds us that we still need to take out yesterday's
garbage and to make our plans a day at a time. For the content
industry the dawn of 2007 seems to be ringing in its own
reality checks in the wake of a tempestuous year of massive
shifts:
- Our
Outlook 2006 theme of "Investing in Users" proved to be a
spot-on forecast of the enormous surge in user-generated
content services dominating the growth story for 2006. From
MySpace
to YouTube
to
Wikipedia to major weblogs and a host of other media and
enterprise outlets content's story in 2006 was about users in
control of content production, aggregation and distribution.
- Online advertising boomed as never before, creating
healthy sources of revenues for many media companies and
strength that is powering growth for an ever-expanding Google
empire. New advertising networks and a boom in custom
printing underscored the rising importance of monetizing
context with content that thrives outside of traditional
publishing venues.
- Private equity fueled both major acquisitions of
established publishing portfolios and a boom in financing for
acquiring and starting online content plays. This helped to
focus a great deal of capital on improved publishing
productivity - and began to wring real profits from online
publishing in more venues than ever before.
- Enterprises benefited from their own boom in social media
services, embracing weblogs, wikis, feeds and online services
that allow professionals to keep in touch with one another
through their own publishing efforts - and to rise above the
disintegration of email as a trusted service. Peer-driven
publishing also helped to fuel a broadening acceptance of
open access scholarly publications for scientific
researchers.
While Google seemed to cement its role as the dominant
source for global search and online advertising in 2006 the
rise of social media and vertical search services as places to
start a quest for knowledge began to shift the balance of power
in online content services. General search services are still
an important resource but with an explosion in available
content sources the ability to focus on the most relevant
content is swinging more users towards trusted human filters as
much as new technologies to help them make sense of it all.
While this should be good news for traditional editorial
sources today's audiences are swinging towards services that
can look at all sources of content with a neutral eye. Quality
content still matters, but as major newspapers, magazines and
media portals struggle to gain market share from monetizing
finite sets of content those who can point to the world's
content and put it in context are gaining the loyalty of
today's audiences.
The broadest result of these changes is that traditional
media outlets are waning rapidly as a true medium for getting
at news and information as well as entertainment and marketing
messages. From YouTube postings to corporate weblogs to weblog
coverage of elections to a cell phone video of Saddam Hussein's
hanging the messages that changed the world in 2006 were
oftentimes from individuals and institutions communicating
directly with the world. 2006 was the dawn of an uneasy
recognition amongst publishers that enabling the social media
revolution will be a core element of their future successes. It
won't be an easy transition - nor will many of today's social
media solutions prove to be long-term winners for audiences
expecting more sophistication from social media services. But
there will be reality checks on both sides of the publishing
equation in 2007 as social media becomes just another aspect of
expression through a multitude of channels.
One key factor in 2007's reality check will be a Western
economy that is reasonably healthy but showing signs of heading
towards a slowdown. Infinite content inventory facing a
shrinking demand for advertising will not necessarily kill off
every marginal online player but it may spell the end of
wishful thinking for many traditional outlets that had
underinvested in online and specialty print publishing.
Moreover, as more marketing money heads down the "long
tail" to reach highly focused audiences the impact of an
economic slowdown is likely to be felt more at the top of the
media food chain than at the bottom. Enterprise content budgets
will not be impacted severely for most of 2007 but as the 2008
planning season unfolds a "make do with less" cycle will be
encouraging enterprise content users to consider more
ad-supported and open access sources of content and to look at
how to leverage their own portal infrastructures more
effectively to access and publish content.
We'll be expanding on our "Reality Checks" theme in our
forthcoming annual Outlook 2007 report, but for now consider
six key "A"s that will require our attention throughout the new
year:
- Audience. In the heady days of 2006 the concept of
"clicks" regained popularity as content sites exploded across
the board and tried to gain a significant share of a
seemingly endless online audience. In a more sober 2007
marketers are going to be asking far more questions about
online audience measurement and looking far more carefully at
how they are reaching their target audiences through media
services and through their own direct communications efforts.
While this promises to be great news for publishers with
highly focused content services the other side of this sword
is that marketers aren't necessarily going to favor narrow
publishing solutions that cannot reach, engage and track
audiences on multiple levels. 2007 promises to be a year in
which required proficiency in delivering and measuring video,
audio and page-based content from both professional and
user-generated sources to sophisticated audiences will
challenge traditional publishers to revamp their operations
more than ever before.
- Aggregation. If 2006 was the year of the weblog,
2007 is shaping up to be the year of the Wiki. Wikis, along
with other content technologies that enable quick content
aggregation from a multitude of sources, are allowing both
individuals and institutions to collaborate on custom content
collections more easily than ever before. Content plays that
based their strength on aggregating captive general-purpose
editorial sources will be more challenged than ever in 2007
by tools that allow purpose-driven content to shine in highly
contextual venues. While in online circles this may mean more
content circulating through peer-to-peer distribution and
self-syndicating feeds for text, video and audio it also
means a movement in 2007 towards custom print publications
that pull together content from a multitude of sources for
elite audiences. Major media companies will try to play
larger roles in this aggregation push but today's aggregation
is a highly movable feast that may make any headway in
aggregation gained from acquisitions rather short-lived.
- APIs. Application Programming Interfaces - APIs
for short - are tools that allow tech-savvy users to develop
their own content tools using their own content and services
from content providers. "Tech-savvy" is a relative term with
many of today's APIs, many of which come packaged as easily
configured "widgets" that can be plugged in to an existing
page of content to deliver sophisticated information or
tailored search results with minimal or no technical
expertise. Expect 2007 to be a year in which APIs and widgets
from many sources pop up in a wide variety of contexts to
make it easier than ever to tailor content services to very
narrow audiences in a wealth of media, enterprise and
personal content applications. If you thought the word "mashups"
was a bit overused in 2006, be ready for far more aggregation
via API-supported mashups in 2007.
- Alternatives. While there is still plenty of
ground to be gained by content pioneers, a more competitive
market for media, enterprise and personal content services is
going to make 2007 much less of a year to favor first movers
in a given content sector. Instead the landscape is beginning
to favor content services providers who can offer better
"second generation" alternative solutions that extend their
marketing plans to solve more problems from more angles.
We'll hear much less about specific solutions in 2007 such as
search engines, analytics, video, weblogs and wikis and more
about services that combine these and other types of content
capabilities to focus on a broader range of user needs. The
search for alternatives will also begin to tug at some of the
basic infrastructure that has underpinned electronic content
services over the past twenty years. Are we ready to pack up
Windows PCs and email and commit to alternatives that are
more in line with today's content users? Many individual and
enterprise users are ready to say "yes" in a more serious way
in 2007.
- Acceleration. As we had predicted in our Outlook
2006 it was a wild year of wheeling and dealing as major
realignments took hold across many publishing and content
services sectors. 2007 promises to be another active year for
deal-making but the emphasis will be on yet another "A" -
acceleration. The closing of Tower Records music stores and
the selloff of dozens of major newspapers stores signaled one
of the key reality checks of 2006 for the content industry:
cannibalization is only a concern when there's still
something left to eat. Remember that spreadsheet that you put
together showing how your content revenues will be shifting
over the next few years? Better go back and redo it - 2007's
pace of change and weakening economy will accelerate the pace
towards new forms of publishing far faster than even many
futurists would have predicted. We'll see many surprising and
sobering foldings and fold-ins throughout the year that will
make us wonder when the shift to a new user-driven publishing
economy will ever end. Getting "how fast" right will be a
major preoccupation in 2007.
- Asia. While the U.S. and European economies are
slowing down, Asian economies continue to boom - and content
services are booming right along with them. There is sure to
be some fallout from Western slowdowns in Asia during 2007
but in large part the boom in electronic content services in
these markets is progressing independent of outside
influences. Hot online markets in China and India will be
joined by expansion in Vietnam and the Near East as countries
seeking a global stage turn to online content markets. The
pervasiveness of advanced electronic media in countries such
as South Korea and Singapore is providing Asian economies
powerful communications infrastructure that is likely to
accelerate their overall economic growth - and return more
fuel for investment in electronic content services. As
Western publishers wring their hands over intellectual
property rights and protecting existing services expect Asia
to push past these limitations and to challenge the West in
2007 with expanded scholarly publishing and business media
and information services.
So here we go again. The fireworks for the year's first
night have dimmed quickly, leaving the cold light of a new dawn
to greet a Content
Nation faced with challenging times and sober realities.
But sobriety can be a good thing if you're equipped to deal
with the aftermath of a content party that promised never to
end. Hello, 2007 - we're looking forward to you rewarding those
ready for your challenges.
-
John Blossom
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