Content, Technology or Something Better?

There has been a recent flurry of head-scratching (here, here and here) on the topic of when a media company should better be thought of as a technology company. It’s a good question, but it’s a question muddied by the slippery, umbrella term "media." I am of the belief that if you create and publish articles, you are a media company, even if you happen to be running on a proprietary content management platform.

But when it comes to data publishers, things aren’t so clear. Data is a form of content that plays very well with software. In fact, most data products would be a lot less valuable if they couldn’t be used effectively by software. The real question is: whose software? Those data publishers whose roots were in print directories had the business mentality of most print publishers, which was to ship out big fat books filled with information and let the customer figure out to how extract value from them. When these publishers first began to offer electronic versions, they followed the same approach, shipping out Excel sheets and letting the customers once again figure out what to do with them. Those who did wrap software around their data were known mostly for creating really bad software, and found that their customers were asking, sometimes begging, just to get the raw data without the software. This led to the conventional wisdom that publishers couldn’t and shouldn’t create software, and technology companies couldn’t and shouldn’t create content. In theory, the two camps were supposed to partner, thus marrying great content and software. But it never seemed to work. There were too many issues around revenue splits and who owned the customer, not to mention a bevy of marketing, sales and operational issues. It’s only been fairly recently that most data publishers woke up to the fact that that selling raw data was not only leaving serious money on the table, it was eroding their perceived value as well. Thus the smart ones began to invest to bring in the talent and tools they needed to create top-notch software customized not only to their data, but to the needs of their customers. The results have been uniformly brilliant. Data wrapped in (good) software means higher price points, more customer engagement and better renewal rates. It’s also forced publishers to get a lot closer to their customers, because you can’t build good software unless you fully understand its use cases. As I see it, data publishers can fairly lay claim to being technology companies. Indeed, many now report spending more on software development than content. But when you think about it, why would a data publisher want to be considered a tech company? In a way, that’s slumming. After all, what’s more valuable: a salesforce productivity tool, or a salesforce productivity tool pre-populated with high quality and regularly updated sales leads?