Internetnews.com says "EMC's bid to purchase Documentum earlier this week raised more than a few eyebrows, particularly among rivals in the enterprise content management (ECM) space such as Interwoven, Open Text and FileNet."
Clay Shirky may not agree with me, but this is a literal no-brainer because content is what makes channels of communication useful and valuable. EMC is prepping a strategy for beginning to extract the value from massive amounts of data stored by its corporate customers. The mistake made by many people talking about "content as king" is thinking that content is just what we think of as a creative product that is a cost center and potential revenue source. Here's what Clay Shirky wrote recently:
People want to believe in things like micropayments because without a magic bullet to believe in, they would be left with the uncomfortable conclusion that what seems to be happening -- free content is growing in both amount and quality -- is what's actually happening.The economics of content creation are in fact fairly simple. The two critical questions are "Does the support come from the reader, or from an advertiser, patron, or the creator?" and "Is the support mandatory or voluntary?"
The internet adds no new possibilities. Instead, it simply shifts both answers strongly to the right. It makes all user-supported schemes harder, and all subsidized schemes easier. It likewise makes collecting fees harder, and soliciting donations easier. And these effects are multiplicative. The internet makes collecting mandatory user fees much harder, and makes voluntarily subsidy much easier.
Actually, the question is not who pays for the content, but what the creator intends to do with it; today, a lot of people are giving away their stuff because there is no way to find a new business model without some experimentation. But there are many enterprise examples that can provide the framework for a content-based strategy for conducting business. For example, an open source strategy in biopharma or at a software company could become self-supporting by integrating outside innovation with internal discoveries to create revenue-producing products more quickly. The open source intellectual assets of companies can also lower customer support costs and sales and marketing burdens by creating a legion of evangelists. In this case, the question of who pays isn't relevant at all -- it's who receives the ultimate value and even if the open source company has to share revenue with outside contributors, its investment in a content management system to extend its massive database of unstructured information is a logical step to turning those assets from sunk costs into revenue.
Not all the data will be profitable, but that is the nature of publishing itself, and that "hit-driven" environment will continue, albeit more robustly -- ultimately in publishing, you have to have a lot of dogs ("mistakes," if you must focus on the negative) to find the few pure breed winners. You let the content out and see what works and focus additional resources on increasing that business. Who needs micropayments? We need contractual relationships and long-term partnerships to extract value from corporate data.
In IT, most big things start with the corporate market. I've seen a little revenue from blogging, but it is the ability of a publishing company to package and sell "stuff" that turns into a living. The company actually adds value, but the creator's share of value is rising because they can do so much more than in the day when they had to work for a large company to have access to the data and distribution capabilities they do today. Once companies that have decided to approach the layers of data in their massive storage systems as assets to be mined for profit, the larger question of how the "content market" will change will come into focus, because the cost of the tools will fall over generations of enterprise tools and straightforward business models for collecting revenues will become more apparent.
Posted by Mitch Ratcliffe at October 20, 2003 10:25 AM | TrackBack