content exchange "provides a single address that content re-sellers
converge on and feed off
Economic laws of increasing, rather than
diminishing, returns mean that every additional unit sold yields a higher
profit-rather than a declining one. The pie is getting bigger.- Sam Vaknin,
author of, The Disintermediation of Content
has been a sea change in the world of content on line.
In the beginning content on the Net had an immediacy which was riveting.
Much of it was excellent and because barriers to entry were low, niche
markets sprang up with very specialized content which could satisfy a
wide range of interests. Surfers were happy but web site owners and content
providers were in search of a business model which could support them.
By then, it was clear, surfers didn't want to pay for content, as least
in the form it was currently offered.
Distribution vs Destination
The content delivery format was transformed when ebusiness discovered
it could leverage content to enhance its sales channel. Large, well funded
companies, who could afford big ad bucks to attract users, began to look
to content providers to incorporate their expertise into a web site which
could then monetize those eyeballs by selling users their products. For
example, a giant sports retailer, might want to incorporate the content
from a small fly fishing site or content provider, to attract a demographic
seeking expert advice and information on various aspects of fly fishing.
The site would provide that content, then switch the end users' attention
to fly fishing rods and paraphernalia, expand it to tents and lanterns,
and maybe even upgrade it to Land Rovers. When an ecommerce transaction
was fulfilled, the site would profit and be in a position to share a portion
of any revenue produced with the fly fishing content provider, in some
financial arrangement or another. It was a reasonable exchange in which
both parties made a bit more money.
Content went from having the difficult task of having to earn enough money
to create a destination site, to the very reasonable task of providing
information, expertise and insight on a site which already had traffic.
Behind the scenes, one of the key drivers of this new model was the development
of new and powerful software, which allowed for seamless syndication of
Destruction of One Type of Aggregator Models
Content aggregation companies were formed to fill the content supply pipelines
for various ecommerce companies. However, new pressures have emerged for
this type of company. As the Net and new software drive continuous change,
the role or one type of intermediary may disappear, to be replaced by
The future looks uncertain for some of the biggest aggregators of content.
According to a Red Herring report, "ISyndicate, once hailed as one
of the most promising customized content delivery plays and backed by
some of the biggest names in the technology and entertainment sectors
having raised $97 million from companies like News Corporation; Microsoft;
Bertelsmann; NBC;Scripps Ventures; Labrador Ventures; Hambrecht and Quist;Infospace;
"iSyndicate's business model seemed asure-fire winner when it launched
in 1997. But today,companies and individual consumers can get the same
personalized content delivered free through Yahoo and others". In
the rush for an increasing supply of content, there has also been a tendency
to put up content which is less highly individualized, fewer fly fishing
commentary pieces, more of an endless stream of news items, which are
not very well differentiated. Isyndicate is in the throes of downsizing
and searching for another business model, hoping to sell it's technology
rather than its content, although it says it will continue to do both.
What went wrong? Perhaps nothing went wrong so much as the Net continued
to evolve and transform. Powerful new software is enabling new and more
efficient business models, creating competitive advantages for doing business
in a different way
The New Wave - Content Exchanges - Eliminating Middle Men, Raising
The newest wave of the net, enabled by powerful new software and a concept
elegant in both its simplicity and efficiency, is the emerging content
A number of sites are introducing content exchanges built on various business
models. Some make money on ad revenues, others let content providers charge
directly for content, then take a commission on each sale. Undoubtedly,
some of these models will prove more profitable than others, and once
more there will be a cycle of destruction and creation and the best form
for content exchanges emerges.But the central concept of a content exchange
seems destined to be a winner.
As Sam Vaknin, author of, The Disintermediation of Content, InternetContent.net,
notes "content brokers ( like Isyndicate and Screaming Media) are
relationship managers." But perhaps content providers don't really
need relationship managers. A company which offers a content exchange
steps back and offers content providers a platform where powerful software
can perform the tasks a broker offered before, providing not only content
syndication technology but also, updating content across an entire syndication
platform and logistical support: a means to offer various content packages,
uniform and customized pricing, consolidated sales reporting and transaction
auditing, customer support" all in a user friendly, automated environment.
"Content creators can thus concentrate on what they do best: content
creation, and reduce their overhead by outsourcing" other functions.
"The content exchange "provides a single address that content
re-sellers converge on and feed off
Economic laws of increasing,
rather than diminishing, returns mean that every additional unit sold
yields a higher profit-rather than a declining one. The pie is getting
Content Estores across the Web
Middlemen content sales organizations are scrambling to change their business
models, either by licensing their syndication technologies or attempting
to plant content estores throughout the web.
Web publishers are getting in on the action too, as new Net companies
emerge which offer publishers the ability to put a store on their own
Web site to sell their own syndicated content,
perhaps augmented by other publisher's content.
"As this tectonic shift reverberates through the whole distribution
chain, retail outlets are beginning to transact directly with content
The borders between the types of intermediaries are blurred",
Vaknin reports." Barnes and Noble has, in effect, become a publisher.
Many publishers have virtual storefronts. Many authors sell directly to
their readers, acting as publishers. The introduction of "book ATMs"-POD
(Print On Demand) machines, which will print every conceivable title in
minutes, on the spot, in "book kiosks"-will give rise to a host
of new intermediaries."
Endless Cycle of Creation and Destruction, Recreation
Once more, only the best of the new breed of content exchanges will survive.
The cycle of creation and destruction will continue with platforms for
content being constantly created, then deconstructed, transformed and
The current content exchange model benefits both content providers and
consumers, alike, as it allows providers to make a decent living and by
giving consumers, not editors and aggregators the ultimate choice, content
will be more efficient, tailored to what consumers want. High quality
content will therefore be available for those willing to pay for it. Although
some aspects may continue to evolve, the best of this trend, bringing
content closer to users, will persist in whatever transformational state.