Content Is Dead -- Long Live Content

When Viacom founder Sumner Redstone said “content is king,” it was in the context that additional distribution outlets give rights holders new ways to monetize the content.  Indeed, thanks to the Internet, there are countless new outlets for content owners to distribute programming, but also thanks to the Internet, there’s an infinite supply of content, which drives advertising rates down. 

In other words, the former increases the value of content -- but the latter decreases it.  Since money is slow to follow audiences and does so in the long term, the negative impact of infinite supply is felt faster and more profoundly than the creation of new distribution outlets, making it harder than ever for incumbents to be in the content business. 

Seeing that historically new distribution platforms increase the total amount of media that is consumed, then challengers and startups can leverage not having any traditional business worth defending to create new, valuable companies. 

The explosion in content leads to more clutter, making it hard for content creators to stand out and nearly impossible for businesses to market themselves.  This is why many technology companies are evolving into content businesses: because it’s more effective to stand out by offering great content, whereas advertising tends to get lost in the shuffle.

Everywhere You Look, Companies Are Becoming Content Creators

Back in 2007, I made the case that Apple or Microsoft should just buy the record labels.  Today, Apple is sitting on $100 billion in cash, so you can make the case that Apple could buy the movie and television industry, as well. 

Ironically, the record labels have seen their businesses continue to shrink even though there are more and more distribution options made available to them.  Was Redstone wrong?  Maybe.  Or, as we alluded to earlier, there are more opportunities for new companies, not existing ones.

While Apple is seen as a white knight thanks to its booming balance sheet, it’s not the only possible suitor.

Microsoft is ramping up its home entertainment strategy through the XBOX Trojan Horse, and has long been a content creator through branded content at MSN.com.  Google isn’t idle, either, spending “north of $200 million” on content for its YouTube unit and acquiring Zagat.  A few years ago we would ask if Google was a media company or not.  No one asks that question anymore.

It doesn’t stop there: LinkedIn is already in the content aggregation business, and  think it’s a matter of time before it starts producing articles and videos (or simply acquiring a company to get into content creation).   Facebook has poached Dan Fletcher, the former social media director at Bloomberg, to be its managing editor.  With Facebook’s impending IPO and a war chest of over $10 billion, it’s a safe bet that some of that money will go into its content strategy, whatever it may be.  Twitter, meanwhile, is putting on DJ sets with the likes of Tiesto live from CES (HP and Intel were the sponsors).

Tell a Story or Get Drowned in the Noise

For years now, marketers have been urged to become content creators. Social media and online video (or, fragmentation and the so-called death of the 30-second TV spot) have forced marketers to rethink their strategy.  Content is the most obvious way for corporations to get more for their dollar.

But wait, is this really new?  Of course not: back in the day, Procter & Gamble financed soap operas.  The details and execution have changed, but at its core you are seeing the Web move from infrastructure, to platforms and now to content.

If I’m a content producer, should I be happy or scared?

It depends.  The glass is either half-full or half-empty.

On the one hand, even if tech companies get fully into content, they will still need to hire, invest or buy content expertise.

But, on the other hand, this makes it more challenging for pure-play content companies because it creates far more clutter across the content landscape.  While content isn’t a zero-sum game, there’s a limit to how much content the average user can consume. 

As such, existing content creators need to remain relevant one way or another as deep-pocketed businesses with existing clients and brands get into the fray. 

Ironically, for years, producers have tried to win over marketers through branded content, but to no avail.  Once businesses become more proactive with content, they may be the ones courting producers.  Now that’s one ending that might catch Hollywood off-guard.

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5 comments about "Content Is Dead -- Long Live Content ".
  1. Paula Lynn from Who Else Unlimited , January 30, 2012 at 5:06 p.m.
    You may want to speak with Wayne regarding his MediaPost article today. Same points from different views (pun intended). Until the content providers can provide more time in the day, the pie pieces will get to be crumbs.
  2. Kevin K from Anonymous , January 30, 2012 at 5:12 p.m.
    "Content may not be king," but it is at least "a queen." Wth all the technological advances, owning and controlling one's intellectual capital is without question still very important for long term success. What will be interesting to see is how Facebook's content strategy plays out. I wonder how they will then feel about protecting it; as opposed to their current ambivalence towards others intellectual propery rights.
  3. Grant Crowell from ReelSEO.com , January 31, 2012 at 6:20 a.m.
    Content is still king (people even in the early SEO space were saying that same thing since the mid-to-late 90's). However, with all of the noise online today, there must be a new "queen," and that is CONTEXT. Social technologies are be improved at understanding what content to deliver to a user depending on their search and browsing behavior, but also based on their choice of device. In fact, better advertising content is already happening that matches up with the actual "organic" content, including with video content. If Content and Context decide to have two babies, they should name one of them "Conversation" and the other "Care."
  4. Ashkan Karbasfrooshan from watchmojo.com , January 31, 2012 at 7:55 a.m.
    Preaching to the choir, obviously content is king, but sometimes the king dies and the throne is passed on to someone else, so the real value lies in the castle/throne perhaps and not the king himself. Generally speaking, content + distribution go hand in hand. One without the other is a worthless proposition, so to speak. Also, agree about context: http://techcrunch.com/2010/01/30/context-is-king-how-videos-found/
  5. Jeff Bach from Quietwater Media , January 31, 2012 at 9:55 a.m.
    It seems to me that the supply of content is not infinite. To be a bit more specific, I would suggest that the supply of low value UGC may be nearly infinite. On the other hand, I think the supply of well done content that has enough appeal to a third party that they are willing to put their brand next to that content is far more limited.
    In addition, some percentage of that high value content at times struggles with discovery. So to me what the online video industry has is a "finite amount of high-quality content that is known about by the (small) community of decision makers". Jeff Bach Quietwater Media