Why is data getting so much attention these days? Why is it such a good business? Why is it so profitable? Well, there are numerous reasons, but the one I’d like to highlight today is that increasingly, data matters.
What do I mean by that? Simply that data, to a degree you don’t see with other forms of content, gets relied on to make serious decisions, some of which have significant, business, economic and personal impact. Some people (many of them rich data publishers) have understood this for a long time. For others, this insight is a new one. And one consequence of data’s growing importance is that it is increasingly the focus of lawmakers. Consider just a few examples:
In a true "only in Hollywood" moment, the state of California now has a law that says data providers cannot publish the ages of people in the entertainment industry. Yes, actors have long been skittish about putting their ages out there, but in the old days, they simply lied about their ages. Now, they have the force of law behind them. The ostensible purpose of this law is to help prevent age discrimination, however, the law also specifically includes everyone in the videogame industry as well, so go figure.
Across the pond, UK financial regulators have taken Morningstar, the mutual funds data company to court. Its offense? A number of the funds to which it gave high ratings ended up under-performing relative to their benchmarks. Apparently your predictions are now required to always be accurate. Of course, if Morningstar could identify top-performing funds with 100% accuracy, my strong recommendation to Morningstar would be to get out of the data business and into the investing business, pronto.
We also have the example of health insurance company physician directories. Every health plan publishes a directory of participating physicians, and in many cases, these directories are woefully inaccurate. Examples abound of plan directories with physicians who have left the plan, moved offices (sometimes hundreds of miles away), retired and even died. This would be just another everyday annoyance except for the fact that many people select their health plans, and spend thousands of dollars, based on the network of physicians a health plan claims to offer. The federal government has stepped in on this one, and not to be outdone, California (surprise!) has its own legislation covering physician directories.
These examples are just the tip of the iceberg. Consider all the various laws around credit data, for example.
Back to my original point, all these rules and laws simply illustrate that data at its core is all about helping people to identify, select, assess and decide. And as databases proliferate, so does their influence and impact. There is power in data, which is why, increasingly, data producers are being held to higher standards of quality and accuracy. While painful for some, in the aggregate, good data is good for all of us.