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Content isn't king (ben-evans.com)
105 points by mooreds 123 days ago | hide | past | web | 78 comments | favorite



I think the author misses the point. He references TV, Music, eBooks, and Movies. Those are not the only forms of content. What about user generated content (Facebook posts, etc...)? Any _data_ that can be consumed, and of interest to an individual is content. An individual's desire to consume content is the lever used by technology to generate a profit.


That depends on what the point is. The question that's being examined is how content fits into the strategic model of Google/Apple/Facebook etc., which broadly speaking is how do you stop users from switching to competing products.

An individual's desire to consume content is not a differentiator/strategic advantage for any one company. Why is it really hard to build a successful new social network, search engine or smartphone platform? Because Facebook has the network effect, Google search is a superior product as it's improved each day by its 100 of millions of users and Apple has a vertically integrated ecosystem that locks users into using an iPhone.


Due to Facebook's network effect, it's hard to gather as much user-generated content elsewhere.

Google's search is barely rivaled by anyone because it returns the best results, which are content.

The network effect is important. One of the major reasons it's important is because it can deliver more and better content.


That's just semantics; of course everything in some way involves content. It just doesn't get you anywhere thinking in such broad terms. You may as well say every tech business is fundamentally about making money, it's true but it doesn't tell you anything interesting.

Understanding tech companies different business models and how paid-for content fits into that does.


He also missed that content (per MIT) is the most profitable business model of all. Case in point how much engineering and R&D dollars had to go into the "Harry Potter novels" or creating a Marvel Super Hero?

Even content from one's garage that users put up on eBay or the paint splatters up for auction at Sothebys New York?


Yes, people often overlook this, and it's evidence of just how absurd our copyright regime is. While big utility, resource, transportation, and retail companies may not have the best PR, it makes sense that they would be among the biggest operations in the world because they do things that are intricate, complicated, and irreducible. Every day they get the oil out of some hole in the arctic and into my local gas pumps, or they get a consumer good designed and built overseas onto a shelf in my local supermarket or shopping mall, etc.

These processes require precision, careful cost analysis, and ultimately employ 10s of thousands of people, all in the process of providing basic living essentials like food, transport, energy, medicine, etc.

What do Disney (#52 Fortune 500) or Time Warner (#95 Fortune 500) do that warrants their presence alongside the Pfizers (provides medication; #54) and 3Ms (provides all kinds of materials and plastics; #94) of the world? They throw mud at the wall until it sticks and then just rehash, rehash, rehash. It is far more profitable than any natural business, meaning a business that exist due to real market forces instead of artificially-imposed monopolies (without copyright, there is virtually unlimited supply to "content", making the market infertile at best).

We have given away the farm to content owners. Copyright must be substantially weakened. Content is only so grotesquely profitable because we threaten to imprison those persons who copy things without the consent of their local MegaCorp; that is, such transactions occur within a completely artificial marketplace. We need to fix this.


Most profitable by margin or absolute dollars? IIRC the tech industry is far bigger than any one "content" industry and maybe bigger than all of them combined.


The biggest industry in the whole world is food. As an industry it covers agriculture, dairy, fishing etc.

The best way to reply is to link to the M.I.T. PDF on most profitable business models - search the word creator: http://ccs.mit.edu/papers/pdf/wp226.pdf

"...Figure 4 shows the distribution of different business models in our sample of large US firms. By far the most common basic business model in our sample is Creator, with 46% of total revenues of the firms in our sample falling within this category.

Landlord type models account for 34% of total revenues, followed by Distributors with 18% of total revenues, and Brokers with 2%. In addition, an overwhelming portion (70%) of the business of large-revenue, publicly traded firms still involves physical assets. Financial and Human assets account for 12% and 13%, respectively, and Intangible assets are only 4% of the revenues of large firms. Figure 4 also shows the numbers of firms generating revenues with each model and asset type. ..."

Creating food is content as well.


How do you even tease out such a thing when you have companies like Comcast or Netflix which clearly fit in both categories?


A movie is like real estate... You make it and you can keep "renting" or selling it. Movies like 'Gone with the Wind, Casablanca, Snow White" are still making studios mad money on different delivery systems from the original theater showing on through to VHS, DVD, Blu Ray, 4000-pixels and streaming.'

These movies came out in the 1930s. They are almost 100-years old.

NetFlix got that fact pretty quickly when the studios wanted to renegotiate contracts and that is where the bulk of their money is coming from. [They are] the creator and the distributor.

edit to fix typo.


Potentially the most profitable. There's plenty of net negative value content out there, too.


There comes a point, though, that we end up abstracting discussions out so much that they don't really mean anything any more. Facebook posts and TV shows are not really equivalent in any meaningful way except that they both use data to download and take up time to consume.


There are plenty of user-generated videos on YouTube that rack up 100K+ to 1M+ views though. Commercially produced TV shows compete for eyeballs (whether they realize it or not) with these YouTubers.


Came to the comments to say exactly the same thing. "Content is king" really refers to the service becoming invisible enough to let the users get what they want out of it.

As product owners/creators, we can easily obsess about our platform and loose sight of the needs of the users we set out to serve, then scratch our heads when users jump ships to a crappier service (in our biased judgement) which happens to have more content.


Yes, and the tech giant are the only ones with enough users to let content producers reach an audience of relevance. Think that was the point the author tried to make, describing the switch from "content" to "audience". Content producers for films, music, and other expensive pieces do not have enough power anymore to reach a large enough audience to make a profit


"Content is king" was also not meant in that sense of "content", though.


I'm genuinely surprised that Facebook hasn't capitalized on the social aspect of watching TV. The prevalence of "watching parties", immediate episode reviews, and instant commentary on the released episodes/shows should point to the large opportunity here. I've wanted to create a startup around this - the ability to "watch a show with your friends" remotely. The problem is that the content is often locked down via Netflix or something, so you'd need an in there. But the opportunities are huge! Imagine watching the presidential debates, or sporting events, in tandem with other people. That would be amazing. Unfortunately, locking down the content is still in the way.


Isn't this something like what's been emerging on Twitch and YouTube the last couple of years?

Eg. during The Electronic Entertainment Expo 2017 (E3) in June there where multiple YouTube channels streaming with side chat, comments and what not. I think I have seen it with the recent Star Wars releases too. Maybe it is not quite what you describe, but this seems to be a trend

Recording, https://www.twitch.tv/videos/152047092


Yup! Though, I'd take it further:

- Have it be friends-specific. I don't always want to watch with strangers.

- Be able to talk to each other, but modify the audio on-the-fly so that it doesn't overpower the audio from the show. In the ideal case, I want to be able to "hear" from my friend on my "left". Hard to do, but worth it

- If it's totally public, there has to be a way to surface relevant content. Twitch has more of a "stadium" feel. I want something more high-quality. I want to hear what my favorite reviewer from the A.V. Club is saying, for example

- Emoji reactions!!!!!!!! Sticky-text isn't always the best thing, sometimes I just want in-the-moment ephemeral reactions

- Discovery for online watching groups. This can split out to something far better down the line

- Integration with PS4, XBox 1, Apple TV, Roku, and other TV platforms. I don't want to look at my phone while watching Game of Thrones or my favorite movie


The Xbox One was going to have this exact feature at launch, but I think they ended up killing it?


Just to offer counter-perspective on your estimation that there's a "large" opportunity as you describe - I have never heard of any of my friends or family holding or attending a "watch party" for anything other than a few American football games each year.

It seems to me that this does happen, but for all I know, maybe FB considered your idea, and the idea failed market validation.

Or maybe you're dead on! (shruggie emoticon)


In the last year I've been invited to watch parties for the presidential election, a G.L.O.W. binge, the Game of Thrones season premier, and the first couple of Twin Peaks episodes. FWIW, the physical constraints are big aspects preventing people organizing more. The hosts have to make sure their house is clean, people have to stay up later to travel and/or clean up, they don't get to watch in their boxers. Making it virtual on Facebook would relieve all of those practical constraints, not to mention that lots of people have an itch to check Facebook while they watch anyway (which is not a positive thing, but there it is.)

On the downside, it punishes people who can't start exactly on time and prevents people pausing to grab a drink or go to the bathroom, so it isn't purely a no-brainer. People who "fall out of sync" would need to disconnect to avoid spoilers.


> FWIW, the physical constraints are big aspects preventing people organizing more.

They are also big aspects of the value!

When someone says "it sure is hard to get my friends together for a party", it's not completely helpful to answer "so don't get together"


It's definitely been a thing for a while: https://www.youtube.com/watch?v=a6otjCKg594


While thinking about this problem in the past, I've ended up using the phrase "participatory meta-content" to describe this kind of content that's built around the audience's participation in the viewing of a show. I agree that the opportunity here is huge, but the garden walls are high.

Twitch is the closest thing to a major player in this space that I'm aware of -- they've even gone to the point of simulating the live-chat experience while you watch an old stream, by replaying chat messages at their correct time-offsets.

Things like this for television do exist specifically for group-watching with a known set of friends, but I think the really interesting part would be stumbling into a community you didn't know about in advance, and making new friends.

Anyway, it's a shame that the licensing regimes built around the media that garners these kinds of audiences are unlikely to permit the sort of experimentation required to find the right experience here! Maybe someone will figure it out.


I've used https://www.letsgaze.com/#/ a few times which worked pretty well. Only works with files you have access to, or freely available youtube content though.

I agree that it's a neat idea. I'm sure the content problem is why there aren't more attempts at the moment.


Thanks for that link! I had found http://syncplay.pl/ but it seems much more fiddly than that.


https://www.rabb.it/ let's you do this. They advertise about letting you watch Netflix, Hulu, Crunchyroll, and anything else with your friends. It seems to be just streaming the user host's screen to anyone else in the room. I'm not sure how legal that is.


Maybe they were too busy micro-optimizing engagement rates using a very large amount of A/B experiments and got stuck at a local maximum?


You may find this interesting: https://www.netflixparty.com/



This is what sports twitter is. Yes, you have to build up the list of people you follow and interact with people to build your followers, but I would much rather that than have to share a sporting event with every fan. I would rather have the content and the discussion separate. This gets even more important when something is a global (such as a Barcelona - Real Madird game). Everyone can join the dicussion and you can curate it to your preferences. I can only imagine having a chatroom with a half-billion (or more) people in dozens of languages. Sports also has the built in advantage of being the one thing most people will consistently watch live and is (typically) broadcast live across time zones. People also expect for results to be "spoiled" if they didn't watch live and know they are responsible for actively avoiding that information. Essentially, sports are (IMO) the last form of entertainment that dictates what time you watch.

I am convinced I love twitter as much as I do because I use it primarily as a way to watch and discuss sports with other people who love that team/sport/game as much as I do. Even among my real life sports fan friends, our interest in a particular game or sport differs. Not so much those who are actively watching and commenting on the games on twitter. You are there and engaged because you want to be. Due to this, I was able to meet fans of my teams that live in multiple countries and consistently talk to them, even outside of that particular event. Especially for sports, so much of the interaction happens arounds the games (who to play, who to sign, tactics, etc.). I would hate to only interact with people in that small time frame and miss all surrounding discussion from people whose opinions I find well thought out or think in a similar manner that I do.

The short snippets of text are great for getting stats and updates directly from reporters/teams/leagues, too. Highlights are able to be immediately played via twitter and photos, gifs, and screenshots are immediately shared. The NBA has really embraced social media with its content policies (cannot use more than two consecutive minutes of broadcast footage without a license; 20 minutes of spliced highlights is fair use) that lets fans make mix tapes, instant highlights, gifs, etc, easily and without fear of copyright takedown notices. In turn, the NBA essentially gets free marketing from its fans. This is where the NFL really blew things, even locking down offical team accounts. Teams are starting to use Periscope to broadcast press conferences, interviews, and warmpus to their fan bases.

If you want to see this kind of dynamic live, check out a big game or a night with a lot of games on NBA twitter. A good-ish place to start would be the SB Nation accounts for the teams and who they are RTing and interacting with. It can be a whole lot of fun and it is easy to catch the highlights of the other games or know if someone is having a monster game you should switch over to.

To me, the wider web of people that twitter catches is much more appropriate for these types of interactions than facebook ever will be. If your goal is to have your small group of friends watch a show, I can see where you find current offerings lacking. But when you want to get involved in an existing "event" twitter is really great for that.


What is Facebook Live if not that?


>Since music no longer stops people from switching between platforms, it’s gone from being a moat (especially for Apple, the one platform company that actually had a strong position)

The author might or might not be right on his general position, but this is a bizarro argument. Apple had in fact kickstarted the whole no-DRM thing.

Neither DRM nor their (meagre, since most just pirated and ripped stuff anyway) iTunes collections is what kept people to iOS / the Mac.


I think music was far more important in the early/mid 2000s in terms of getting people to buy Macs and iPods. Just anecdotal experience, plus remembering when iTunes wasn't available for Windows.


Well, when iTunes wasn't available for Windows there wasn't an Apple iTunes Music Store either though.


Actually iTunes Store existed April 2003 as Mac only before iTunes for Windows was available Oct the same year.

This was I think why at the time BuyMusic.com made a huge deal of launching its store as Windows only

https://en.wikipedia.org/wiki/History_of_iTunes


No, there was a couple of years where they had DRMed music and it was a de facto moat, even if it wasn't a strategic moat. I bought exactly one song in that period, from a Windows box, that I could play in iTunes or on my iPod. IIRC it was Amazon that used non-DRM as a differentiator, and then Jobs wrote his famous letter.


>No, there was a couple of years where they had DRMed music and it was a de facto moat, even if it wasn't a strategic moat.

How was it a moat? First, it only is a moat if people can't move platform. But:

1) iTunes was available for both Mac and Windows. So they could move OS.

2) Few people had any significant iTunes paid-for library, to make it any kind of significant barrier to live the iTunes music ecosystem. The huge majority of the songs on those iPods were ripped and pirated.

3) If anything, people kept coming INTO Macs FROM Windows (to the tune of Mac laptop share going from 2-3% to 10%), the other way around. Why would the existing Mac users even consider jumping ship (even if there was no moat as I say), if the general trend was the opposite?


It was a moat for Apple's iPod.

I don't know why you're particularly invested in denying it. I don't think Apple treated it as a strategic priority, but it was definitely a thing at the time; if you went down the iTunes route, you pretty much had to use an Apple portable media player. The alternative was MP3s and the freedom to choose any player you like, including iPod.


Napster did not have DRM. Nor mix tapes before it.


That's irrelevant, since the COMMERCIAL platforms that followed Napster did, and the record companies insisted that iTunes store has too.

Apple wanted to make a legal music store -- and for that needed license to sell music from the record companies.

Napster was a music sharing/download site so didn't need to have anything.


It's relevant because it is another way in which the assertion that Apple is responsible for getting rid of DRM'd music is at best misleading. Apple was largely responsible for the distribution of DRM encumbered music in the post Napster era. [1]

[1]: https://en.wikipedia.org/wiki/FairPlay


>It's relevant because it is another way in which the assertion that Apple is responsible for getting rid of DRM'd music is at best misleading.

Apple is responsible for getting rid of DRM'd in music sold legally.


> Apple is responsible for getting rid of DRM'd in music sold legally.

They are also responsible for the introduction of mass selling of DRM encumbered music. Like many cults, Apple provides the relief for the distress it, itself, introduced.


>They are also responsible for the introduction of mass selling of DRM encumbered music.

Are they?

Because at the time, and Job's later letter on DRM is proof for that, it was not Apple's idea, but a demand of the music companies in order to give their catalogues to the (still unmade and with not much leverage) iTunes store.

>Like many cults, Apple provides the relief for the distress it, itself, introduced.

Or, many people can't recognize that Apple accepted DRM (like every other outlet at the time) in order to be able to license major label music, and then came forward and helped abolish it.


On the the contrary, until iTunes, pretty much all music sold legally did not have DRM. Apple was responsible for the sale of DRM encumbered music on an unprecedented scale. Then Apple built a moat with the iTunes API's.


>On the the contrary, until iTunes, pretty much all music sold legally did not have DRM.

If you mean CDs, then yes. But that's not an argument.


"Netflix, of course, is a TV company, in the context of this conversation - it isn’t using content for leverage for some other platform (Spotify is the same, without the commissioning). But Amazon clearly is using content for platform leverage - as something else to speed up the Prime flywheel."

I don't get this part, Netflix is producing original or buying exclusive content which it tries to distribute globally. The same is true for Amazon. Who is this not competing with the best content for its service?


He's saying that Netflix is producing content in order to sell Netflix, but Amazon is producing content as an enticement to get people to sign up for Amazon Prime and spend more money on Amazon generally.


This piece has a lot of assertions and predictions but nothing clearly quantified or falsifiable. Somehow, I doubt he's shorting Disney or any other major content company but if he were (even in a fake money portfolio) it would make for a much more interesting argument.


he works for a16z, you'll see it reflected in their investments - or not.

overall this is content marketing for a16z, right along their great podcasts, etc. attracting start-ups and good candidates to work for them.

being a visible, renowned think tank is not a bad place to be, if you have the money and patience to execute along that line. it is amazingly hard work to churn out quality content throughout the year.


I know he works for a16z. They will ultimately be subject to judgement based on their investments, though the time horizon is long. And yes, it's clear that this is content marketing.

>"it is amazingly hard work to churn out quality content throughout the year."

One of the best examples I've seen of this was David Gardener's Rule Breaker portfolio in the 90s. He publicly wrote up analysis after analysis on technologies and companies, along with the occasional announcement he was buying or selling a stock. There were a few whiffs, but he got AOL in '94, Amazon in '97, and Amgen, eBay and Starbucks in '98. He was highly visible, forward predicting and right in a way that was quantifiable. I'm not a fan of the direction his business (fool.com) has gone in the past 10 years, but throughout the first dotcom boom, he made some great contrarian picks despite extreme push-back, particularly for Amazon.

The same can be said, on the whole, of the predictions of Ray Kurzweil. Even though he wasn't talking about individual companies, there were specific predictions and timelines that could be compared to predictions of his peer and what actually happened (e.g. a chess AI beating the top human player, the mapping of the human genome by 2000, etc) http://bigthink.com/endless-innovation/why-ray-kurzweils-pre...


"The tech industry has been trying to get onto the TV and into the living room since before the consumer internet - the ‘information superhighway’ of the early 1990s was really about interactive TV, not the web."

How was the early 90s about Interactive TV and not the web?


Because the "web" as we know it today did not exist until the mid-90's. Before then, there were a bunch of companies trying to sell their own Interactive TV offerings.

If you're interested in learning more about this era of internet history, I highly recommend this podcast: http://www.internethistorypodcast.com/


Yep. "Set top box" was the buzz word at the time and an Amiga chipset based one as the "next big thing" was an entirely plausible thing to consider.


It was also called WebTV (later renamed to MSN TV).

https://en.wikipedia.org/wiki/MSN_TV


Probably everyone working in the WebTV / streaming video space back in the late '90s remembers that The Onion article:

http://www.theonion.com/article/new-5000-multimedia-computer...


It still kinda rings true. Looking at CRT TVs the other day at a thrift shop, the picture wasn't nearly as bad as I remembered. Light static/snow was a much better degradation mode than with digital OTA TV, and if I were a heavy channel-surfer I'd probably be willing to trade HD picture quality for near-instant channel switching—delays on the modern digital tuners really suck. Not that you can anymore since the analog broadcasts are gone, but still.

Between all that and stupid pwnable "smart" TVs that take half a minute to boot up while adding no value, things are sort of worse than they used to be, in TV land. Thanks, computers!


I remember testing a web app on that in the early 2000s!


That's not from the early 90's.


I highly recommend a quick read of Marshall McLuhan's "The medium is the message": https://en.wikipedia.org/wiki/The_medium_is_the_message

Netflix, Amazon, et all - are not redefining content. They're redefining the medium.


> Something similar applies to ebooks. Like Spotify, the Kindle app is on any platform, so it doesn’t stop you switching devices. Unlike music, your books are still bought (mostly: there are some subscription services but they don’t cover mainstream titles), and locked with DRM, so it’s harder to switch away from Kindle than from Spotify, but that only locks you into Kindle, not any other part of Amazon’s platform: using a Kindle app or physical Kindle e-ink device doesn’t compel you to use any other Amazon products.

This seems confused. Ultimately Amazon's primary purpose is probably not to sell the devices and the lock-in works in the sense that you have your Kindle library (even if you strip the DRM you can't keep all your notes and highlights), your recommendations, and your more or less automatic impulse to go to the Kindle store for books.


The 2001-era paper by the same name and a different author (Andrew Odlyzko -- https://en.wikipedia.org/wiki/Andrew_Odlyzko) is a compelling read: http://firstmonday.org/article/view/833/742


And I would posit that the odlyzko article is much more well backed up with facts...


> People in tech and media have been saying that ‘content is king’ for a long time

This first sentence is just wrong. The phrase 'content is king' came up more than a decade ago, in a time when major media outlets struggled with the first wave of online tech. It was a desparate statement to play down the upcoming threat (and the media knew it). Tech never thought of content as king and media stopped saying this for a very long time.


You're missing the point of the article.

This is about the important of access to content in the broad strategy of online content distribution platforms. Once the major platforms have access to roughly the same content, the importance of content diminishes.

However, before getting to that state, access to content was a key strategic point for those platforms.


Content is king in many aspects though. A good example of which is video game consoles, people buy Nintendo products because they want to play Nintendo games.


If we have to king something, I will say "Marketing is king". It is a little more nuanced than that but not much more.


Is it just me and my biases, or does the author seems to have a consistently misguided view of each individual area and example described.

Perhaps this could be taken as interesting from some kind of "10th man rule" perspective? Otherwise it just seems like a lot of assertions based on causality I can't quite logically wrap my head around.


Canistream.it exists. Most popular content is part or totally exclusive. Content is still king.


It is an interesting coincidence that this hits the front page the day after Game of Thrones opens their new season, with the associated HBO Go crash, etc.

https://encrypted.google.com/search?hl=en&q=HBO%20Go%20crash...


Content IS king... but the author has a different definition apparently. He should have named it "Vendor lock-in isn't king". People have choice now. The content is what matters, not the platform.


Content has never been king - even though the content companies have been trying to convince everyone it is.

Distribution is king.

The company that controls the access to content via distribution controls pricing.


That's what the article is about, however. That access to content isn't a key strategic lever anymore for online content distribution platforms.

Most music streaming platforms share roughly the same library, so exclusive music is not a lever these days, but merely a marketing strategy.

I did not get his point of view on ebooks however. Do most online ebook distributors share roughly the same library of titles? Or is it even important to discuss, since Amazon seemingly has a monopoly on ebook distribution? What he mentions, instead, is that DRM in ebooks lock you into the app, but not the platform, so ebook exclusivity aren't a key strategic lever for that platform. If you cancel your subscription, you get to keep your content.

And then he's wondering how the effect of on-demand distribution will affect TV/Movies. Will the major tech distribution platforms transform the TV industry and render irrelevant content exclusivity?


It seems hard to explain a case like Spotify then.


Content is king in niche markets. One blog post can drive thousands of dollars in revenue. Its all about your market.


The gatekeeper is king, as they have control over all the eyeballs.

The content is just a means.




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