Repackaging to survive in a low-margin millenium
By David Walker (Google profile)
Anthony Ghattas has had a short career in online publishing. Before that, he ran a textile business. The two businesses may seem worlds apart. But working in a tough, low margin business seems to have prepared Mr Ghattas for the career he began last year at content management firm Horan Wall and Walker, where he's now chief executive. When he addressed an e-commerce content conference late in 2000, he set out a clear-eyed view of how to make money in online content.
Online content sounds like a brave, exciting new world. The reality is more prosaic. As Mr Ghattas puts it, "the value of content is dependent upon the application of the content". And while the Web is full of terrific content, that content is rarely being paid for. The Web generates less revenue for its publishers than any other major medium, and most of that revenue goes to a few large "aggregators" such as Yahoo! and ninemsn. The main source of revenue for most content providers - banner advertising - is drying up; most Australian Web sites are now plastered with ads for other parts of their own sites, a sure sign that banner ad prices are about to plummet.
How to make a living in this cash-starved world? Mr Ghattas's strategy in a word: repackaging. HWW is trying to make online content pay by ensuring that what it sells to online businesses also finds a home in newspapers, magazines, reports and on the internal databases of large organisations such as banks.
Mr Ghattas took as his example the Home Price Guide, owned jointly by HWW and John Fairfax (owner of this newspaper). On his count, content from the guide was earning money from nine different sources - everywhere from HWW's Web site, to paper-based per-postcode summaries for buyers ad and sellers, to guides for mortgage insurers and lenders. Often it was a different subset of the content, the price adjusted for a different market, but the same core product was sold in many ways.
How does repackaging differ from repurposing, the strategy of taking material from media such as print and putting it up on the Web? The packaging makes the difference. Once you realise that different media require different views of the content, different ways of presenting the data or the story, then you can create a package that plays to the audience. In the early days of the now-defunct Age Money & Investment Web site, we simply repurposed newspaper features for the Web. But our figures soon showed Web viewers enthusiasm for short eight-paragraph condensations that preserved the articles' essential points. So we moved from repurposing to repackaging, a marginally higher-cost strategy with a much larger payoff.
The repackaging strategy has its origin in the print publishing world, itself a tough, low-margin environment. There "second rights" revenues frequently make the difference between profit and loss for a publishing company.
Repackaging works for content buyers as well as content sellers. Find content that's already appeared in mainstream media, and its owners will probably be willing to provide it at very low cost.
You can take the HWW strategy a step further by applying it within Web sites, too. On many sites, visitors will be looking not for the latest information but for timeless advice. The right Valentine's Day gifts don't change much from year to year; neither do the basics of investing. Existing print and broadcast media companies, focussing on the "latest" to draw consumers, have driven too many Web sites to focus on expensive "fresh" content at the expense of timeless or effectively updated content.
Repackaging also gives you the opportunity to polish content in a way that could never happen if it was used just once. The response to articles can be examined week-by-week and month-by-month, flaws removed and strong points brough to the fore, headlines strengthened and images fine-tuned. This polishing should cost far less than generating a new piece of content from scratch.
Digital content lasts forever and can be transported almost for free. Time to take advantage of the fact.