I got a thoughtful and irritable reply from Rick Bruner of MarketingFix on my analysis of the Online Publishers’ Association study of the size of the content market. Rick has gotten me to refine my thinking (but not to change my mind).
Defining content is really hard. I’m leaning toward dumping the term entirely because it’s so vague as to be meaningless. I think the OPA has exploited this vagueness to overstate the size of the market that online publishers can address.
I would include the following in my definition of content:
- News & Information: General news, magazines (consumer reports, salon), horoscopes. Excludes Business & Investing. Includes archive database revenue from a single site. Excludes aggregated content databases, such as Northern Light.
- Business & Investing: Wall Street Journal, TheStreet.com, Smartmoney. Does not include stock prices.
- Databases: Hoovers, Northern Light, Ancestry.com, stock prices. Includes database that aggregates information from multiple sources for flexible searching.
I would exclude the following from my definition of content:
- Services: Includes greeting cards, online games, fantasy sports, email, and personals. Personals aren’t content, they’re a service. You can browse the listings on Match.com for free. You pay to add your name to the database and to get contact information on people you want to meet. It’s not clear how much of Yahoo’s and MSN’s “content” revenue comes from services.
- Music: This seems like a different thing altogether. It’s produced, delivered, and consumed differently, using different media. It’s more like software than it is like published content. This includes streaming and downloadable music.
- Electronic documents: Credit reports, people trackers, and vehicle histories feel more like ebooks–single, indivisible lumps of content sold and delivered electronically. Aside from the fact that they’re delivered electronically, this business is a lot like selling books.
- Pornography (hard & soft core): Includes webcams, amateur sites, Playboy.com, etc. No one is buying Playboy.com for the articles.
What’s my objection to the OPA’s definition of content? Rick says on MarketingFix:
For those who maintain “users won’t pay for content,” I reply “neener, neener, neener.” Paid content would appear to now amount to roughly 20% of all revenue for online publishers, and spending for content roughly doubled in 2002 over 2001.
Rick seems to be saying that “online publishers” are getting all $1.3 billion–about 20% of the $6 billion in online advertising in emarketer’s 2002 estimate. He’s making the mistake the OPA wants everyone to make: inferring that there’s $1.3 billion dollars out there for online publishers to get their hands on.
But (a) Two thirds of this revenue will go to companies that cannot be described as “publishers”, (b) ten percent of the remainder is going to one property, the Wall Street Journal [NOTE: this used to read 1/3, but I overestimated the revenue of the WSJ], and (c) the growth rate of the revenue available to publishers is a lot less than 100%.
My conclusion from the OPA study:
Paid content is less than 10% of all revenue for online publishers, and that share will not grow in 2003. However, there does appear to be an opportunity for online publishers to increase non-advertising revenue by using their sites to sell services to their readers. The market for online services is twice as large and growing five times as fast as the content market.
Defining the online content market is a tricky exercise but is fundamentally important when sizing the market so everyone knows what is being measured. In putting together eMarketer’s Online Content report I struggled with this issue too. http://www.emarketer.com/products/report.php?content_on
IDC’s definition of ‘content’ for their market sizing purposes is: “Digitized information regardless of media type, made available over networks, such as text, music, pictures or video.”
This is clearly a very broad definition. What is also important in defining the market is distinguishing between ‘content’ targeted at individual consumers and ‘content’ targeted at organizations/businesses. The subscription metrics between the two categories are often very different and lumping them altogether can skew the market. This is my only quibble with the OPA report. They state they are measuring consumer spending of online content yet they include the ieee.org and eMarketer within their study, who are clearly targeting organizations/volume buyers for their content.
I commend OPA (and comScore Networks who do the measuring)for beginning to measure a market which hasn’t been measured by many research firms in the past. What is less important, in my view, than quibbling over what is or isn’t in the basket of online content, is ensuring that everyone knows what is being measured. OPA has clearly outlined what it is measuring in its reports which ensures readers can assess for themselves the accuracy of their assumptions and measurements.
cheers
Thanks for the note. I participated in IDC’s content definition meetings, so I have some insight into what they were trying to do. It’s important to keep in mind that IDC’s customers are hardware and software vendors. To them, all bits are content.
I applaud OPA’s explicitness about what’s included in their definition and am grateful for their willingness to break out the components. It’s great information. However, I still think they’ve positioned this study to disguise the fact that for most online publishers selling content on the Net is a sucker bet.