Saturday, December 9, 2006

Content centric businesses/organizations and scale

Scott Karp at Publishing 2.0 asks the question, “Can anyone think of a content business — meaning a company that produces original content — that has scaled dramatically in recent years?“ That‘s a good question. He answers his own question, “I can’t. Look at the businesses that have scaled — Google, MySpace, YouTube — all platforms for content, but not producers of content.“

Basically, technological changes and “platforms” like Wikipedia are so hyper-efficient that the traditional models can‘t begin to compete. The harder old-world organizations try the deeper they sink.

The result of unbundling, disaggregation, the loss of pipe control (to use Andy Kessler’s construct) — i.e. the inability to force people to consume content they don’t want — is that content businesses don’t scale anymore. That doesn’t mean creating content isn’t profitable — independent publishers like Mike Arrington and Rafat Ali can have nice little businesses — but the same phenomenon that allowed them to become business at all will probably prevent them from becoming large businesses. I’ve heard Mike Arrington say he wants TechCrunch to be as big as CNET — the problem is that CNET’s audience is not only being chipped away by TechCrunch but also by hundreds of other independent technology publishers, which limit the growth of TechCrunch as much as they shrink the reach of CNET.

It‘s not about the content, it‘s about creating technologies that allows people, everyone with a keyboard, to engage. If you don‘t get this basic tenet of what‘s occurring today you‘re pretty much screwed.

No comments: