Creators of Good Content Are Key Assets

When we witness the changes within the newspaper sector we see many journalists laid off whist the owners grapple with debt repayments, print and distribution fixed costs and volatile advertising revenues. However if we accept that Content is always King and being able to produce good content is a valuable asset, then is it wise to lay off the goose that could lay the golden egg and retain the mechanics that merely incur cost?

We have been reading interesting and thought provoking articles in Publishing 2.0 and by Mike Arrington at Techcrunch. They focus on AOL’s content strategy under its new CEO, Tim Armstrong. Whilst newspapers have released their journalists AOL has been acquiring them in order to build its online content driven powerhouse. Arrington points out that AOL assets now include former journalists from BusinessWeek, New York Times, USA Today, ESPN, Washington Post, Wall Street Journal, Forbes, Consumer Reports, Condé Nast and scores of regional and national newspapers and magazines. He even lists a number of these people and their respective resumes. It is claimed that AOL now has double the workforce they had a year ago, with some 500 full time writers and editors, plus a further 1,500 freelancers.

Why did newspapers make so many newsroom cuts? Why did they cut the people who actually reported and commented on the news?

AOL are building and buying scores of online media brands. Acquisitions such as Weblogs have continued to grow and their MediaGlow division has some reported 76 million unique monthly visitors (Comsore, May 2009) and AOL boasts 27 of the Technorati Top 100 blogs. With a policy to focus on the content and talent, new brands can be created at little cost and importantly the writers are available to make it happen.

Publishing 2.0 goes on to describe AOL’s Politico, which showcases its high profile journalists and their by-lines on every story. Interestingly, it is claimed that half their annual $15 million revenues comes from a print edition. However the print follows the digital edition and is targeted at a highly valuable niche market.

Authors, journalists, illustrators, photographers, creators are any publishing and media companies’ most valuable assets and it both interesting and refreshing to read how AOL have recognised that.

Nescape RIP

Today brings more news that demonstrates that no one can assume the right to exist in the digital world forever. Netscape Navigator, the world’s first commercial Web browser will no longer be developed and effectively die in February after a 13-year run.

Netscape once competed handsomely with Microsoft Explorer but could not compete when Explorer was bundled into the ‘package’. Netscape has since seen the emergence of its open-source cousin, Firefox and now other browsers such as Safari. Where Firefox now commands around 10% of the browser market Explorer dominates.

Some may argue that Microsoft’s dominance was bad and unhealthy but others would say it was good for development in that software only needed to be built to work on Explorer and often trying to port it to other browsers and maintain backward compatibility was a pain if not always possible. The new challenge lies in the mobile world and whether browsers such as Safari can become the de facto standard

People will still be able to download and use the Netscape browser indefinitely, but AOL who paid $10 billion for the product will stop releasing security and other updates on 1st February.

Health Warning as Internet Advertising is Bought-up

In the struggle for advantage in the digital advertising boom the search engines are buying up online advertising companies, sometimes for eye-popping prices. This week Microsoft agreed to buy the online advertising company Aqauantive for $6 billion, which is Microsoft’s largest acquisition ever. This month Google bought DoubleClick, a competitor of Aquantive, for $3.1 billion. , outbidding Microsoft.
Yahoo recently bought the 80 percent of Right Media that it did not already own for $680 million. The company operates an auction marketplace in which advertisers and publishers buy and sell online advertising space in real time. Also this week, AOL bought Third Screen Media, which operates an ad network for mobile phones, and Adtech, an online advertising firm in Germany. AOL was the first Internet portal to buy a major advertising network, Advertising.com, in 2004.

According to eMarketer, online adverts accounted for 5.8 percent of the $285 billion spent on advertising in the United States in 2006 and it estimates that the online share will rise to 10.2 percent by 2010. As dollars move online, the big Internet companies see a chance to capture an ever-larger portion of the advertising dollar.

Google, which leads the online advertising world, is among those trying to make inroads into Microsoft’s traditional software business by offering word processing, spreadsheets and other software free. Quantive, which is based in Seattle, will bring many advertisers to Microsoft.
The technology helps Web publishers earn the most for the ad space available on their sites.

The recent deals are also blurring the lines between the big Internet companies and traditional advertising companies and last week the WPP Group bought 24/7 Real Media, another DoubleClick competitor, for $649 million, to compete better with Internet companies.

As we see business models shifting to advertising based free content these shifts become even more alarming. Imagine if music, videos and even books where available free to download as long as you accepted the advertising feeds. Just like ITV and the other broadcasters it have done for years. What will that do to people who are still trying to sell in the traditional model and what will be the impact on price?