Uncommon Wisdom

Feb 7 2011   6:31PM GMT

Content is again king — but in a less cool, grown-up business way



Posted by: Tom Nolle
Tags:
AOL
Comcast
Google
NBC
online content
OTT
portals
Yahoo

There are some new indications that the momentum of the web is shifting more decisively toward content, but not in the simplistic “content is king” sense. What’s happening is a combination of fairly complicated and interrelated shifts, and these are gradually changing the way the online business model works. How that will impact the online market players is yet to be seen.

One obvious shift is the increased interest of portal players in having their own content, something that we can fairly say is extended into the TV space by the recently approved Comcast/NBCU deal. Ads have to live in something that consumers want in order to be pulled into view, and so all ad sponsorship (and pretty much all of the online world) has to have that magnetic content.

It used to be that you could act as a portal by simply aggregating everyone else’s content, a move that played to early desire by practically every business and content producer to have a web presence. AOL’s decision to buy the Huffington Post (a growing liberal media site) reflects the reality that most content sites are now looking at monetization on their own. That means that portal/aggregator sites have less to work with—unless they start becoming producers.

What’s interesting about both the Comcast and AOL decision is that the choice is one of buying professional content and not going with the “crowdsource” trend that’s obviously cheaper. Google’s challenge in monetizing YouTube is most likely the reason, and the fact that crowdsourced portals would start to look a lot like social networks. Been there, done that.

Yahoo! is the poster child for the other shift—we’re seeing the semantic web not as an Internet trend but as an aggregator trend. Think “semantic portal.” The idea is to combine search and context with portals and targeting to produce relevant content for consumers. The relevance factor makes the portal more attractive, and presumably would therefore help Yahoo! monetize its higher overall scores at serving content to consumers (Yahoo! beat Google slightly in unique visitors, for example, in comScore results). That might let Yahoo! pay more for content and dodge the pay-wall trend.

What all this means, of course, is that the bloom is off the rose. We’re past the growing-up phase of the online world and into the hard business middle-age. I’ve noted issues of maturity as they apply to the ISPs in the last couple of posts, and the new trends show that maturity is upon even the OTT players. The question is how much of the online revolution is a fad. Here in the U.S., where alternative channels of information dissemination are the richest in the world, we have the lowest online penetration and the least interest in getting online among those not there already.

Does that mean that we’re already seeing an opt-out effect? It doesn’t seem so, but it does appear that we’re seeing the lack of universal opting in. That could be a result of a lack of “fad sensitivity” among a segment of the population. If so, the effect could spread as having your own personal website or being on Facebook or Twitter, or even playing with a smartphone at a party, ceases to be cool. Not only do we have to worry about reinventing the Internet as a network, we have to reinvent the coolness model every year or so, because the requirements to achieve the cool state shift rapidly. Good thing I gave up years ago!

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