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By: Marc Spiegler

Dyson, Europeans Discuss Value Of Web Content

ZURICH, Switzerland – Web editors are fond of saying, ?Content is everything,? but is that really true? Over the course of three wintry days last week, the sixth annual Interactive Publishing conference covered a range of topics that included everything from copyright issues to open-
source development to a twisted Dutch version of MTV’s ?The Real World.?

But during the planned events and informal t?te-?-t?tes, a single question kept cropping up: Is content worth anything?

For a group composed primarily of content providers and content marketers, the issue has life-or-death implications. For them, the first day proved pretty depressing.

In the showcase event moderated by Internet guru Esther Dyson of EDventure Holdings, the panel disagreed mightily on whether or not Europe was a fertile ground for Internet-
company investors, and they all questioned a business model based around content. Underlying their pessimism were several factors:

1. Ad revenues are hard to predict.
2. Content is expensive to produce.
3. The Internet is flooded with content, so it remains difficult to find users willing to pay for any content – unless, of course, it’s highly actionable, such as hot stock information.

Content is a turn-off

Taking the hardest line, Swedish venture capitalist Hans Lindroth said, ?Content sites presume advertising revenue, and I’m very skeptical, so I don’t invest in that.?

For Nick Denton, founder of the United Kingdom’s ?internetworking group? First Tuesday, the very word ?content? was a turn-off. ?Don’t call your idea a content deal,? he advised would-be entrepreneurs. ?No quality money is going into content. Content isn’t scaleable, and the (venture capitalists) want scaleable models. So call it aggregation, or e-commerce, or a portal.?

Uli Hegge, the new-media point man for Germany’s Jahr Investment Group, however, refused to completely reject content – no surprise, really, given his years working for German media moguls Gruner + Jahr. ?The people I work with are not afraid of investing in content,? he said. ?But we need to see a plan that shows the content as a revenue generator.?

Forestalling what might have been a wave of resignation among conference attendees, David Graves of Reuters New Media provided an antidote to such pessimism the next morning. ?You’re seeing a lot of short-sightedness among many venture capitalists, because too many of them come from a technical or finance background,? said Graves, who is based in the U.S. ?To them it’s all bits and bytes. Content has its own culture and it’s scary to outsiders. If you go to Nokia and say ‘We need to send a Gulfstream Five to Texas, because (a movie star) has been busted up for drugs,’ then Nokia would say, ‘What?’ But in Hollywood, they say, ‘Send the jet!’ ?

Rather than being put out of business by the Internet, Graves predicted, traditional content providers will thrive. He drew a comparison to the movie business, whose death knell had supposedly been sounded by the successive arrival of radio, television, cable TV, and VCRs. In the end each technology created yet another potential revenue stream for films, allowing today’s bloated budgets.

?It used to be that Reuters could produce 1,000 stories a day, and a newspaper might use only 20,? Graves said. ?But there is a market for every story we produce, and now online you can see them all.?

Which is not to say that the Internet won’t force media outlets to reshape themselves and their content. Today, Graves said, the decision boils down to two choices: either become a portal, or align yourself with a series of portals.


Marc Spiegler is a freelance writer based in Zurich.

Editor & Publisher was a sponsor of Interactive Publishing.

(c) Copyright 1999, Editor & Publisher

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