Is Content King Midas?

Everyone loves to spout off this idea that “content is king,” as if simply having content—lots of it—gives you an edge and ensures that the people and their money will soon follow. As the newspaper industry and other old media institutions in the age of blogs and YouTube have discovered, that’s not necessarily true.

The result is something Tom Cunniff addressed in his post “The Content Glut: Why It Stinks To Be ‘King,’” for MediaBizBloggers. “The world is absolutely drowning in content, and the laws of supply and demand are kicking in, hard.”

He argues that anyone with creativity and 10 minutes to set up a blog can now compete with the Big Boys, which is true only to the extent that we look at content as a commodity to be traded and the supply of which directly relates to its value. I’d argue that the value of the content is not dependent on the volume produced but rather on the demand, which again is not tied to supply but instead to quality.

Adding to the complexity is the idea that content wants to be free. Well, it does want to be free, but that doesn’t mean it’s free. Confused? Let me explain.

James McQuivey of Forrester recently said  that “people don’t pay for content and they never have… They have always paid for access to content,” which is dead on and core to the misunderstanding of the “content is king” clarion. It’s not that a scarcity of content is what drove the value but that access to that content was limited. As McQuivey explains, “In the past, access happened to be gated by analog constraints.” This is key and the heart of the newspaper industry’s problems. It’s no longer an access problem for the reader, so what is the new revenue model?

Rupert Murdoch would like to limit the access and is hoping (nay, praying) his competitors join in. But they won’t, because his competition is no longer just other media giants—at least those who still think of this as a supply-side game. So if News Corp. gates its content, the smart competition will remove any barriers and win the market share. Because there is no monopoly on news, Rupert can’t win this game. Cunniff nails it:

“Content companies will find new business models or die. Former giants will vanish, and our colleagues in their young 20s will wonder why those companies were ever important.”

So what are those new business models? Cunniff has some ideas, the most interesting of which relates to “real-time Web” models:

“The real-time Web (think mobile and location-based services, and real-time social media like FourSquare) will create new and more relevant advertising opportunities,” he said.

But I think the real money is going to be made in leveraging the two things the old guys have over the upstarts: infrastructure and brand equity. People read the Wall Street Journal and the New York Times because they trust them, not because they control the news or are even first to report (which is actually a benefit in the long run—see: trust). It’s time to leverage that trust into a syndication plan where third parties pay for access to your content in order to build their own traffic and brand equity. Think of “Powered by Google” or “Intel Inside” for content.

The bottom line is that content does want to be free, as in it doesn’t want to be constrained or closed in. That doesn’t mean it doesn’t have value, and that value is what makes it King.

Originally posted on the New Ideas blog.

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