Category: Analysis

Gerry McGovern written a useful mediation on the nature of content and content management. His point is that most organizations think of Web content as a static thing and not something dynamic and interactive.

Words and numbers are not the act; they are rather a record of the act. An invoice is a record of the sale. It is not the sale. It comes after the sale. That’s where the Web is different. If commerce is selling with people, then ecommerce is selling with content.

I’ve been struggling with defining the online content market myself and he has given me something to think about.

I certainly believe that most current definitions of content are too inclusive, and that a lot of current interactive content is ill-advised. But when we create content for online distribution, it’s important to ask ourselves whether we’re using the medium to full advantage or imposing a model from the print media.

Everyone talks about Open Source software, but outside the geekiest media there is little discussion of open standards.

Jonathan Schwartz’s column in News.com last week makes the excellent point that open standards are a bigger threat to Microsoft than open source.

Open standards make it possible for anyone to play on a platform, without using any particular software or paying licensing fees. Open standards like HTTP and HTML (and TCP/IP!) built the Web. RSS is one of the engines driving the blogging phenomenon. Open standards produce network effects for software.

Open standards are certainly more important to online publishers than open source, because its the standards that determine whether all those bits can be understood by people. If Microsoft (or Adobe or Macromedia or whoever) owns the file format, your content has no inaccessible unless you play by their rules.

Microsoft is struggling with open standards right now, trying to figure out how to move its Office documents to XML while keeping its own proprietary lock your information. It’s no surprise that Microsoft is bringing XML to Office slowly.

It makes you wonder why publishers are thinking about making PDF the standard for digital edtitions, and the publishing industry is looking to make PDF a standard for archiving.

Paging Nicholson Baker !

The Apple/Universal thing has left normally authoritative analysts gasping for air.

This is no ordinary strategic merger. This isn’t simply another Sony/Columbia or Time Warner AOL. There are, as yet, no obvious synergies between the companies; no ways to save money at the back end or exploit sales channels. Nor would there be if Apple launched their music service. I think that’s a good thing.

This deal only makes sense if Jobs intends to revamp Universal the same way he revamped Apple when he came back–utterly. And then it’s a huge bet, not some supposedly safe merger of complementary companies.

Emarketer has a very interesting interview with the publisher of Economist.com. Highlights:

• The current revenue split is 60% advertising, 40% subscription and individual article purchases. “I think it’s hard to imagine that subscriptions become probably more than 50% of revenues, partly because I think advertising’s still going to continue to grow. I think it’s not that subs is less important; I think you’re seeing the overall growth in advertising being bigger or as big. “
• The Economist has separate print and online sales forces. Not only does it avoid sales people giving away online to sell print, but “It’s also that a lot of what we do is complicated. It’s variable. If you think of selling print, for example, it’s, “Do you want a color page or a black-and-white page?” Selling dot-com is very much about understanding the customers, understanding the technology. I think you need two sets of people doing those separate jobs. “
• There’s a lot of free content on the home page, but for you have to be a subscriber read most of it. It’s an important tool for selling subscriptions.
• They have 174,000 subscribers, but the bulk of them are print subscribers who have activated their free online subs. That puts online subscription revenue at under $6 million (174,000/2*$70/year).
• The average online reader is 10 years younger than the average print reader. If you excluded those free print subs, I suspect they would be even younger.

What comes across is a refreshing lack of hubris. The Economist, as one of the strongest brands in business and news, is as unique a case as the Wall Street Journal. But they are clearly focused on learning from their mistakes and building their business incrementally, instead of thrashing around with strategic shifts.

I love Netflix. I’ve been using it less than a month and I don’t think I’ll ever set foot in a video store again. Netflix is so good at what it does that it is able to overcome the lousiness of its Web site.

It’s a better way to rent movies. You tell them what movies you want to see. For $20 a month, you can have three movies checked out at any time, and they send you new DVD’s as you return the ones you’re viewing.

This has a lot of advantages, starting with the elimination of multi-day rental charges and late fees. Then there’s elimination of trips to the video store to rent and return DVD’s. Finally it helps me avoid seizing up when I can’t find the one or two movies I came to the store to rent. Oh, and it helps to have more information about the film than the blurbs on the box.

Their operations are brilliant. Their custom mailer doubles as a paid return envelope. They email you when they receive your returns and when they ship a DVD to you, so you know what’s coming. The whole thing is designed to be fast and inexpensive.

But their web site is awful. I’ve rated 40 films on the site, but Netflix’s Recommendations link returns an empty page. You can’t search for films by director. Their “Critics’ Picks” are awkward to browse. Their links to related films are unimaginative. The cumulative effect is that it’s really difficult to find films to add to your rental queue.

This is surprising because this is not a difficult design problem and it has been solved at least twice. I have no idea why Netflix hasn’t learned from IMDB or reel.com how to design a movie Web site.

I don’t doubt that a better site would improve their bottom line, but Netflix’s grassroot success is a lesson for us all. Even when the Web is your only presence in the market, getting the operations right is absolutely critical.

There isn’t an online publishing business model, says Vin Crosbie, there are manyonline publishing business models.

That’s absolutely correct. I’d go a step further and say there isn’t a single print business model, either. Vin seems to be saying that business publications can charge for subscriptions, and that consumer books cannot (or not very much, anyway).

However, there are plenty of great business publications who give away subscriptions to either 100% of their readers in order to have maximum coverage of a desirable market (CIO magazine), or give away a certain percentage of subscriptions to very important readers (like CEO’s) and sell themselves dear to lesser mortals (Forbes).

There are also plenty of consumer magazines who either charge close to full price for subscriptions (The New Yorker sometimes) or rely primarily on undiscounted newsstand sales (People).

In other words, there isn’t a single online publishing business model because there isn’t a single print publishing business model.

A couple of recent articles made me realize the importance of being good enough, but no better.

David Weinberger has a great note on the battle between those who want to make the underlying structure of the web more…structured, and those who see the advantage of the current markup mess.

Dave points out that it is precisely that inattention to well-formed and formal syntax that made the Web a runaway hit with people who were more interested in publishing than in coding. In the very early days of the Web, SGML veterans detested the sloppy HTML we were all writing. The early versions of Netscape were notoriously forgiving of bad HTML and we all benefited:

I mean, if the early browsers only read well-formed and valid HTML, the Web would be far neater, one-thousandth the size, and lifeless.

Meanwhile, Clay Shirky has yet another excellent essay, this time on the tension between “the [vision of the Net] everyone wants — ubiquitous and convenient — and the … the one we get — spotty and cobbled together.”

Clay’s point is that cheap and adequate networks nearly always offer better price/performance than expensive, optimized networks. And these networks can be incrementally optimized over time at a much lower, widely-distributed cost (and faster revenue ramp) than building the perfect network from scratch.

These “nearlynets” have the advantage that they are much less subject to abuse because they’re not owned by a single, inevitably large, investor/builder.

Mobile companies’ need for increased average revenue per user (ARPU) is likely to retard adoption of 3G technology, according to a new report from PriceWaterhouseCoopers and Microsoft.

Of course, the drive to increase ARPU is driven by carriers’ post-bubble balance sheets and not by the unproven value of 3G for consumers.

PWC and MS say that consumers in Britain are already concerned about the high cost of mobile calls, and the carriers’ pricing plans will double the cost for those who make the move to 3G. And that doesn’t include the GBP400 for the phones themselves.

This is the latest in the continuing struggle of mobile network operators’ to duplicate (and exploit) the growth of the Internet while eliminating the openness, choice, end-to-end philosophy, and low cost that made the Internet successful.

Search engine expert Danny Sullivan reviews the search engines of the past and present, with some hints for what is to come, on Clickz.

It’s easy to forget, in this Google-centric universe, how many search engines there have been, and how ruthlessly Darwinian was the process that led to the current situation.

I was surprised by the degree and speed of the consolidation in the business over the last five years, probably because I underestimated the cost of upgrading and maintaining a working search engine relative to the (short term) costs of simply buying the results. The trend toward paid listings will no doubt hasten consolidation because it requires a very new kind of selling infrastructure.

However, the sheer number of players and the low (in absolute terms) price of doing it yourself drive down the value of even a consolidated property.That’s what former high-flyer Inktomi discovered and what Overture is discovering.