Content Companies Don't Need To Outrun The Bear, They Need To Outrun One Another
“Two campers are walking through the forest when they suddenly encounter a grizzly bear.
The bear rears up on his hind legs and lets out a terrifying roar.
Both campers are frozen in their tracks.
The first camper whispers, ‘I'm sure glad I wore my running shoes today.’
‘It doesn't matter what kind of shoes you're wearing, you're not gonna outrun that bear,’ replies the second.
‘I don't have to outrun the bear, I just have to outrun YOU," he answers.’
Last week, News Corp. announced that Chief Digital Officer Jon Miller was leaving the company, before the split of Rupert Murdoch’s empire into two units and after the parent company’s failure to spin off IGN Entertainment. IGN is a blip on News Corp.’s P&L, which makes $35 billion in revenues from publishing and broadcasting. Let’s face it, for News Corp., the Web is a distribution platform for its core units (as their Roku investment shows), but not an area where they plan on investing in new, standalone businesses, evidenced by the sale of MySpace last year.
Ditto the New York Times Company: after a dalliance with Answers.com, NYT sold About.com to Barry Diller’s Ask.com for $300 million. “About.com has been a strong contributor to our company since its acquisition in 2005,” said Arthur Sulzberger Jr., chairman of the NYT, but in the end the “sale will allow the NYT to focus on the development and growth of our core brands locally, nationally and on a global scale.”
What’s Old is New Again
About.com and IGN are old sites: the former tracing its roots back to 1995 as the Mining Company while IGN was launched in 1996 as Snowball.com by Mark Jung (Disclaimer: Jung and IGN acquired my last company AskMen in 2005. I pitched IGN brass on the WatchMojo concept. They passed, so I left in 2006 to launch WatchMojo. Today, IGN distributes some of our video game content).
About.com rose to a pre-bubble valuation of $1.5 billion before selling first to Primedia for $690 million, and then to NYT for $410 million. Incidentally, About.com and NYT have never really cross-promoted one another the way they could have, and that’s partly because the NYT’s focus on traditional and investigate journalism was too highfalutin’ for About.com’s breed of “service journalism.”
Then when Demand Media landed on the scene, it spooked About.com. When Google reshuffled its algorithm via the Panda update, it killed any appetite the NYT had for the vagaries of content 2.0. Sometime between Panda and now, Answers.com and Ask.com made overtures to the Sulzbergers. It was only a matter of time, I guess.
Similarly, in News Corp’s view, IGN is on borrowed time: Jon Miller’s departure came on the heels of Roy Bahat’s departure as IGN’s CEO. The jury’s out on its future, but you have to be naïve to think it’s going to be “business as usual.”
Remember the Algorithm? Yeah, Me Neither
For Barry Diller, About.com will be Ask.com’s next attempt at remaining relevant against the Google.com onslaught. Ironically, before the NYT outbid others for About.com in 2005, Google looked at buying the site, too. At the time, Google was driving so much traffic to About.com, and About.com was raking in so much pay-per-click revenue from Google that it sort of seemed logical (the same logic that suggested Google may buy Demand Media, before Google instead tried to kill ’em all via Panda).
Since then, Google’s doubled down on content via acquisitions of Frommer’s and Zagat, as well as its massive video content investments via YouTube.
Different But Similar
With regards to editorial direction, About.com and IGN can’t be more different: About.com publishes timeless, reference, informational content; IGN publishes timely, entertaining video game releases. But they share a lot more in common than being around since the mid-1990s: both have – relatively speaking for their size and scale – underinvested in video. Don’t get me wrong: IGN and About.com have produced a lot of video and can claim big enough view counts, but About.com ceded more room than it needed to to DemandMedia’s eHow, while IGN.com totally gave the online video gaming crown to Machinima.
Content Companies, Too, Can Suffer From Innovator’s Dilemma
Content is a funny business: it takes time to scale, and once you hit a certain milestone, then it becomes really easy to maneuver on cruise control. But while content companies don’t need a winner-takes-all strategy and approach to outrun the proverbial bear, they do need to outrun one another.
In other words, both IGN and About.com suffered from the innovator’s dilemma and stuck to text content at the expense of investing in video. After all, from August 2010 to July 2012, YouTube’s views grew tenfold. People are obviously watching more videos, and while they’re not necessarily doing it on IGN.com or About.com but rather YouTube, it’s important for content companies to get with the times.