Feed suppliers
The theme of the Content Summit 2000 was the content deal on the Web
The topic of the Content Summit 2000 was the content deal on the WebBy Thomas Brenzikofer Content brokers have discovered an obviously lucrative market niche: they buy and sell online content of all kinds to portals and increasingly also to websites of large companies. Most of the content comes from media companies. The question is whether these content providers are not cutting their own throats.
They aggregate content from various content providers, bundle it into individual packages called "feeds," and sell them to their buyers. We are talking about so-called content brokers such as iSyndicate, ScreamingMedia, YourNews or 4Content.
The content company Screaming Media shows that its business could be worthwhile, at least in the future. The U.S. company, founded by advertising veteran Jay Chiat, generated sales of $14 million in the first nine months of this fiscal year. At the same time, it accumulated a loss of $81.2 million.
But thanks to an IPO and private investors, Screaming Media has $102 million in its war chest. And it is confident of earning money soon: According to Grant Slinger, Senior Vice President at Screaming Media, large customers such as IBM are quite prepared to fork out over 20,000 dollars a month for their content feeds.
Prices are as high as the demand
Steve Outing, CEO of the U.S. company Content-Exchange, also noted at the Content Summit 2000 in Zurich: "Demand is great, and prices are correspondingly high." According to Steve Outing, online content in the U.S. currently pays three times more than print content. The best prices can be charged for content that has a strong media brand as a sender.
Content prices are governed by supply and demand. "We usually charge 50 percent of the revenue for our brokerage, but that can vary widely depending on the attractiveness of the content," says Allison Hartsoe, co-founder of iSyndicate, which is present in the European market through a joint venture with Bertelsmann.
Additional source of revenue for media companies
For media companies, content brokers represent an additional source of income. Jupiter Communications knows that this generates more than just crumbs: This year, it is reported that content has already been brokered for around 343 million dollars. In 2004, the market is expected to grow to 1.4 billion dollars. Content is playing an increasingly important role in the new media value chain.
But why should media companies deliver around half of the content billions to syndicators instead of taking the business into their own hands? "Because it is simply too tedious for media companies to negotiate individually with hundreds of potential buyers. In addition, it is also technically very complex to manage the deliveries," says Hartsoe.
Neutral program directors put together content mix
For Marcus Oltmanns, COO and co-founder of Hamburg-based 4Content, there's another reason why it won't be possible to do without intermediaries in the future: "To a certain extent, we act as neutral program directors and put together a mix of content from different sources in completely different formats for our customers. This consulting service creates added value that a single publishing house cannot offer in this way."
Nevertheless, media companies will have to think carefully about whether brokering their content is worthwhile. In particular, the question arises as to whether the additional earnings can outweigh the fact that the resale of the content leads to an inflationary reduction in the value of the content, which ultimately also affects the brand. Grant Slinger of ScreamingMedia is rather relaxed about this: "There are over 55 million websites. So it's not the creation of content that's the problem, but its distribution. Because content only becomes valuable when it reaches the right person at the right time in the right place."
Content brokers in SwitzerlandIn Switzerland, content broking is still not very mature. Two providers are active in this business, at least to some extent: Beat Curti's Swisscontent and the Internetmedien AG of former Blick reporter Beat Alder. The latter mainly supplies portal sites with news; Swisscontent is responsible for the content of the Yellowworld postal portal via its joint venture with Swiss Post, Yellowcontent. Recently, the online news agency Pressetext.ch also launched Newsfox (www.newsfox.ch), a hub between content providers and content buyers. Newsfox syndicates news as well as magazine content, photos, audio content and videos. The content comes from its own production as well as from partners. The German company 4Content (www.4content.de) also has its eye on the Swiss content market and, according to COO Marcus Oltmanns, has concrete plans to set up a branch in Switzerland.
They aggregate content from various content providers, bundle it into individual packages called "feeds," and sell them to their buyers. We are talking about so-called content brokers such as iSyndicate, ScreamingMedia, YourNews or 4Content.
The content company Screaming Media shows that its business could be worthwhile, at least in the future. The U.S. company, founded by advertising veteran Jay Chiat, generated sales of $14 million in the first nine months of this fiscal year. At the same time, it accumulated a loss of $81.2 million.
But thanks to an IPO and private investors, Screaming Media has $102 million in its war chest. And it is confident of earning money soon: According to Grant Slinger, Senior Vice President at Screaming Media, large customers such as IBM are quite prepared to fork out over 20,000 dollars a month for their content feeds.
Prices are as high as the demand
Steve Outing, CEO of the U.S. company Content-Exchange, also noted at the Content Summit 2000 in Zurich: "Demand is great, and prices are correspondingly high." According to Steve Outing, online content in the U.S. currently pays three times more than print content. The best prices can be charged for content that has a strong media brand as a sender.
Content prices are governed by supply and demand. "We usually charge 50 percent of the revenue for our brokerage, but that can vary widely depending on the attractiveness of the content," says Allison Hartsoe, co-founder of iSyndicate, which is present in the European market through a joint venture with Bertelsmann.
Additional source of revenue for media companies
For media companies, content brokers represent an additional source of income. Jupiter Communications knows that this generates more than just crumbs: This year, it is reported that content has already been brokered for around 343 million dollars. In 2004, the market is expected to grow to 1.4 billion dollars. Content is playing an increasingly important role in the new media value chain.
But why should media companies deliver around half of the content billions to syndicators instead of taking the business into their own hands? "Because it is simply too tedious for media companies to negotiate individually with hundreds of potential buyers. In addition, it is also technically very complex to manage the deliveries," says Hartsoe.
Neutral program directors put together content mix
For Marcus Oltmanns, COO and co-founder of Hamburg-based 4Content, there's another reason why it won't be possible to do without intermediaries in the future: "To a certain extent, we act as neutral program directors and put together a mix of content from different sources in completely different formats for our customers. This consulting service creates added value that a single publishing house cannot offer in this way."
Nevertheless, media companies will have to think carefully about whether brokering their content is worthwhile. In particular, the question arises as to whether the additional earnings can outweigh the fact that the resale of the content leads to an inflationary reduction in the value of the content, which ultimately also affects the brand. Grant Slinger of ScreamingMedia is rather relaxed about this: "There are over 55 million websites. So it's not the creation of content that's the problem, but its distribution. Because content only becomes valuable when it reaches the right person at the right time in the right place."
Content brokers in SwitzerlandIn Switzerland, content broking is still not very mature. Two providers are active in this business, at least to some extent: Beat Curti's Swisscontent and the Internetmedien AG of former Blick reporter Beat Alder. The latter mainly supplies portal sites with news; Swisscontent is responsible for the content of the Yellowworld postal portal via its joint venture with Swiss Post, Yellowcontent. Recently, the online news agency Pressetext.ch also launched Newsfox (www.newsfox.ch), a hub between content providers and content buyers. Newsfox syndicates news as well as magazine content, photos, audio content and videos. The content comes from its own production as well as from partners. The German company 4Content (www.4content.de) also has its eye on the Swiss content market and, according to COO Marcus Oltmanns, has concrete plans to set up a branch in Switzerland.
