Content Is Eating The World
Exactly 10 years ago, Marc Andreessen coined his famous phrase “Software is eating the world”. And he wrote in a Wall Street Journal that: “we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy”
Marc Andreessen was right. Not all the executive statements are created equal, and what he observed so accurately 10 years ago — most definitely takes the cake. Guess what, 10 years later, we are facing a brand-new phenomenon that is equally profound and far-reaching. IMHO, this is the decade of: “Content is eating the world” — for a number of reasons…
Firstly, digitization was already well on its way even before the pandemic. COVID-19 simply put it on steroids and the rate of digitization is now an order of magnitude faster than before. And nothing creates a greater demand for the content than the lockdowns — regardless of your age…
In my post: “Reinventing Andrew Lloyd Weber”, I covered the evolution of digital content by comparing Andrew Lloyd Weber’s strategies to Netflix. And among many other observations, I wrote: “To compare Netflix with ALW — I find the following metaphor quite useful: while Andrew is the world-famous DESIGN/BUILD architect of the composition, Netflix is the world-famous REALTOR — reselling the same content ‘000s of times, all around the world”.
As in my every other “Reinvention” post, I even recommended to ALW a specific strategy to follow. Lo and behold, I would classify ALW’s response as a… mushroom treatment (or, perhaps in more artistic terms, I should call it a “Tchaikovsky Treatment” — in reference to his Pathetique Symphony). The bottom line is this:
You can’t offer just a little bit of content the same way you can’t be just a little bit pregnant
And as Lee Iacocca once said in his TV commercial: “You either lead, follow, or get out of the way”.
Now, if ALW is lacking the 21st Century business sense — the MET Opera is showing to the world how it should be done. It already offers free of charge daily streaming and the content of its recent operas is more and more enriched by additional commentaries and interviews — which, BTW, is in line with some of my recommendations to ALW… So, wait until the lockdowns are over, and see what is possible. But don’t get me wrong — my comments are not limited to the entertainment business…
Content Is The King
Limited content access is not working, either. The best example I can offer is the difference between the two most prestigious business schools: Harvard and INSEAD. While INSEAD is publishing all its articles free for all — Harvard is not… One can only have free access to a limited number of HBR articles per month. And if you want to read more — fill out their subscription forms… and better have your credit card handy.
Perhaps in the past, access to printed materials against monthly subscription fees was the only game in town. But in a digital word? Please… Still not convinced? So, let me ask you this question: Is Gmail letting you send only 6 emails a month for free? Is WhatsApp limiting the amount of data calls you can make a month — before asking for your credit card? And somehow, they all figured out how to make it work…
My advice: put on your thinking cap once more.. and NEVER take it off. Rethinking and reinventing your business model never stops — so: Think, Plan, and Act accordingly…
As I mentioned in every Reinventing XYZ post, I see too many product-oriented entities focused on pushing their existing product out the door — while losing ~70% of possible new revenues. It’s time to start generating new secondary and tertiary revenue streams linked to the new content that doesn’t even exist yet. Such a strategy is scalable and sustainable, and it also offers revenue smoothing.
Yes, I worked with many companies in the past and some have done very well by analyzing their customers with granular details. Logically, they are selling their products and services to existing customers they thoroughly scrutinized. And yet, I firmly believe that there are HUGE and untapped opportunities to generate new revenues by focusing on …. noncustomers!
In similarity, one can only tolerate that many messages informing you that the “fantastic discount” on their monthly subscription is going to expire tomorrow! Subscribe now!
But what exactly happens if you don’t? Well, just wait until a similar message appears the next month, again and again… If I only had a dollar for each such NYT message that I receive every month. Nobody takes such threats seriously anymore — so, stop flogging the dead horse, please. Instead, read my Reinvention posts, or give me a call — and I will show you what else is possible…
The Benefits To Content Providers and… Facilitators
In Chapter 2 of my book “AI Boogeyman — Dispelling Fake News About Job Losses”, I spoke about how Digitization, IT, and AI advances redefine consumers’ habits. And as it happens, shopping for food and groceries also receives its rightful attention.
Most of the grocers are all trying to look alike, and they deal with the competition by rushing into costly acquisitions. My message: instead of doing what you are doing, your focus should be on how to redefine the problem, move away from a devastating race to the bottom, and create a much bigger growth opportunity — while at it.
Content providers and content facilitators can learn a lot from the grocers. Amazon did it. While profit margins from selling groceries are EXTREMELY low & hover between 1 to 3%, acquiring Whole Foods brought new and much bigger revenue streams to Amazon.
Such higher margins are linked to Amazon Web Services (AWS). Did you really think that following Amazon’s acquisition, Whole Foods is going to outsource its cloud-based logistics to IBM?
And while speaking about IBM… here is an important question: why companies like IBM are caught napping? Yes, bringing the new Chairman and CEO on board is nice. But isn’t it about time to change the narrative and rebuild? What’s the alternative — to see more startups such as Snowflake exceeding IBM’s Market Cap within one month from the date of their IPO?
According to Wikipedia, “The “THINK” slogan was first used by Thomas J. Watson in December 1911, while managing the sales and advertising departments at the National Cash Register Company. At an uninspiring sales meeting, Watson interrupted, saying “The trouble with every one of us is that we don’t think enough. We don’t get paid for working with our feet — we get paid for working with our heads”. Watson then wrote THINK on the easel. In 1914, Watson brought the slogan with him to the Computing-Tabulating-Recording Company (CTR) and its subsidiaries, all of which later became IBM”
So, in order for IBM to take advantage of such an impressive heritage, perhaps 100+ years later it is time to revisit the old banner and do both: Rethink & Reinvent? Well, now that I think about it (no pun intended) — I already know which company will appear in my next Reinvent post. That’s what good advisor is for, IBM…
As per a recent Red Shark News article: “Content is king but having shed loads of fantastic content makes you the king of kings. Having shed loads of fantastic, original and constantly fresh content? Well, that makes you God”.
Still not convinced? “To put that another way: Netflix is responsible for 45% of the overall content spending since 2010. According to JustWatch, an international streaming guide, Netflix spent two and half times more than the next nearest competitor Amazon Prime Video this year.
Another report by BMO Capital Markets predicts Netflix is on track to spend $26 billion by 2028. By contrast, Disney spent about $1 billion on original programming for Disney+ in 2020. HBO Max reportedly invested $2bn and Apple TV+ had a $6bn content bill in its first year”
A great time to be in show business and the entire content providers’ ecosystem, indeed…
As BusinessAI™ veteran w/ 30-yr hands-on AI expertise, I deliver unbiased AI investment advice to separate the wheat from the chaff. By joining Advisory Boards, I help VC/CVC/PE funds to turn their unicorns into stallions… instead of little ponies.
I am on a single mission: to Reinvent Corporate Prosperity. My goal is to stop the Dreams of Wealth from becoming Nightmares of Poverty. My structured finance expertise was acquired by financing over $1B of Renewable Energy projects. And now, I apply such skills to Healthcare, Fintech, Transportation, Construction & Manufacturing sectors.
And it is not about how to score one hit. It’s a process to beat the odds and it needs to be repeated time after time — just as I did w/ Verizon 20 years ago. I reached the stage in my life where I don’t care about office politics and water-cooler gossips. Nor do I offer fake flatteries to CEOs. All I care about is how to solve problems and deliver results — by managing change and uncertainty, resiliently…
