Wednesday, December 06, 2006

Content Businesses Don’t Scale Anymore

Can anyone think of a content business — meaning a company that produces original content — that has scaled dramatically in recent years? I can’t. Look at the businesses that have scaled — Google, MySpace, YouTube — all platforms for content, but not producers of content. Compare those to original content businesses like Weblogs, Inc., Gawker, TechCrunch, Paid Content — they are successful at their scale, but that scale is still tiny compared to the scale of the aggregation businesses. Even portals like AOL and Yahoo are much more aggregators of content than original producers of content.

Jonathan Miller at Web 2.0, shortly before his abrupt departure from AOL, effectively conceded that the content business is losing scale. John Battelle asked him whether portals like AOL can hold onto their monopoly, or whether they will go the way of cable TV, i.e. infinite fragmentation. Although he gave the dutiful public company answer, that in practice he didn’t see why AOL wouldn’t hang onto its monopoly, his first answer was frank and honest — in principle, there’s no reason why these monopolies shouldn’t unwind.

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