The New Aggregation: Models for Success in Creating Content Value

RESEARCH

THE NEW AGGREGATION: MODELS FOR SUCCESS IN CREATING CONTENT VALUE

SHORE COMMUNICATIONS INC.

SCI-201001

ALL RIGHTS RESERVED

21 September 2010

SHORE COMMUNICATIONS INC. THE NEW AGGREGATION - SCI-201001

21 September 2010 COPYRIGHT © 1999-2010 SHORE COMMUNICATIONS INC. i ALL RIGHTS RESERVED

TABLE OF CONTENTS

1. REPORT PROFILE .................................................................................... 1

2. EXECUTIVE SUMMARY ............................................................................ 2

3. PREFACE TO 2010 EDITION .................................................................... 3

4. BACKGROUND .......................................................................................... 3

5. WHAT IS AGGREGATION? ....................................................................... 4

6. ATTRIBUTES OF AGGREGATION VALUE ............................................... 5

7. THE TRADITIONAL AGGREGATION MODEL : THE FACTORY .............. 7

8. THE NEW AGGREGATION MODEL : THE NETWORK ............................ 8

9. ATTRIBUTES OF AGGREGATION: TRADITIONAL VS. NEW ................ 12

10. THE IMPACT ON TRADITIONAL AGGREGATORS ................................ 14

11. HOW VENDORS APPLY THE AGGREGATION MODEL ........................ 15

12. SUCCESSFUL BUSINESS MODELS IN THE NEW AGGREGATION .... 17

13. WHERE TRADITIONAL AGGREGATION MODELS STILL MATTER ..... 19

14. A CHECKLIST FOR APPLYING THE NEW AGGREGATION MODEL .... 21

15. RECOMMENDATIONS AND CONCLUSION ........................................... 22

15.1 General Recommendations............................................................................................. 22

15.2 Recommendations for Commercial Aggregators ......................................................... 24

15.3 Recommendations for Publishers .................................................................................. 24

15.4 Recommendations for Institutions ................................................................................. 26

15.5 Recommendations for Technology Companies ........................................................... 27

15.6 Conclusion ........................................................................................................................ 28

16. ABOUT THE AUTHOR ............................................................................. 29

17. ABOUT SHORE ....................................................................................... 31


21 September 2010 COPYRIGHT © 1999-2010 SHORE COMMUNICATIONS INC. ii ALL RIGHTS RESERVED

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21 September 2010 COPYRIGHT © 1999-2010 SHORE COMMUNICATIONS INC. 1 ALL RIGHTS RESERVED

1. REPORT PROFILE

FOCUS The New Aggregation is an evolving model for commercial electronic content

aggregation services. It rewards content and technology suppliers that focus

product and service development on the specific attributes of content aggregation

that best suit the needs of audiences participating aggressively in the content

production, aggregation and distribution process. With today’s powerful and highly

affordable content technologies and universal network connectivity, commercial

content aggregators face an array of new challenges and opportunities in meeting

the needs of individuals and institutions equipped with many of these technologies.

This New Aggregation requires aggregators, publishers and the institutions that they

serve to rethink how they can face the future of content monetization effectively.

AUDIENCE Senior executives, strategists and marketing managers of content aggregation and

content technology providers seeking to position their firms for higher profits and

margins, most especially those reliant on institutional sales; senior executives,

strategists and marketing managers of publishing companies trying to maximize

profits and market penetration through online distribution while maintaining

revenues from traditional sources; senior information technology managers and

information professionals at major institutions trying to maximize the value of their

commercial content investments across content platforms and technologies.

CONTENT A detailed analysis of how changes in content technologies have rendered many

aspects of commercial electronic content aggregation obsolete. Numerous

diagrams and tables provide clear illustrations of how technology has impacted

business models and how new business models are filling in the gaps where

aggregators and publishers have failed to provide value. A diagnostic checklist

provides executives an opportunity to consider how their own operations are

impacted by these trends. Recommendations for clear actions to take in the light of

these trends to produce successful business models are provided for commercial

aggregators, publishers and the major institutions that they serve.

Vendors of products and services mentioned or discussed in this paper include: AOL,

Apple, Bloomberg, L.P., Connotate, Content Directions, Copyright Clearance Center,

ECNext, Eliyon, EMC/Documentum, Endeca, Factiva, Google, IBM, Inside Scoop, ISYS,

LexisNexis, MarkLogic, Microsoft, Movable Type, MSN, OpenText, PHP Nuke,

Thomson Dialog, Verity, Vignette and Yahoo!

USE An assessment that can be used to stimulate market research, product planning

and market positioning that will improve the operational and financial performance

of commercial aggregators, publishers, content technology providers and the

institutions that they serve. Those responsible for marketing strategies will find this

paper to be useful in considering how to position products and services by focusing

on those attributes of content aggregation most likely to yield high value in their

marketplaces. Implementers at major institutions will learn how to manage vendor

relationships in a changing content marketplace.



2. EXECUTIVE SUMMARY

Traditional business models for commercial electronic content aggregation are now challenged by

individuals and institutions equipped with powerful content technologies that see commercial content

as one component of a wide array of valuable resources at their disposal. Today’s leading corporate,

academic and public institutions purchase content from aggregators with increasing reluctance. They

see aggregators’ business models and operations methods being largely out of touch with their needs

for sophisticated content integration and much more efficient management of commercial terms and

payments.

Modern networking, search engines and more decentralized content publication and sharing techniques

have rendered many of these database‐driven content aggregator “factories” obsolete by reducing or

eliminating the benefits a vendor‐provided central database. Content oftentimes can be collected from

individual publishers more effectively in a client’s computer directly from publishers via Web‐based

technologies. This has turned the vertical “content factory” aggregation model on its side, exposing

specific attributes of content aggregation such as indexing and retrieval to exploitation by suppliers who

can service specific needs without collecting commercial content in an aggregator’s database. Some

aggregators have responded to technology threats by developing their own increasingly sophisticated

interfaces and tools to integrate content from their databases into institutional workflows more

effectively. But better interfaces from aggregators cover up the more basic issue of whether today’s

underlying business models for commercial content aggregation are viable in the long run. New

technologies and content consumptions patterns challenge these business models as never before.

The New Aggregation is the process of focusing product and service development on those specific

attributes of the content aggregation model that best suit the needs of specific audiences

participating aggressively in the content production, aggregation and distribution process. In the New

Aggregation model profits flow to those suppliers that can optimize specific attributes of the content

aggregation model most effectively, allowing clients equipped with powerful technology to select them

at will. In reaction to the New Aggregation some aggregators will focus on engineering more exclusive

content redistribution rights. This will be too expensive a proposition for both publishers and

aggregators to consider in most instances and ignores the ability of clients to be highly effective

commercial content redistributors when equipped with appropriate technologies. Most aggregators will

wind up having to select those portions of the aggregation model that will allow them to survive most

effectively. Most that insist on trying to make the old aggregation model more efficient will fail unless

they provide truly unique content that has little competition.

The onus is on institutions and publishers to demand significant changes that align with the New

Aggregation, but aggregators should consider major adjustments to their marketing and product

strategies that will allow them to transition to the New Aggregation model profitably. This paper

provides specific recommendations on methods and strategies for aggregators to consider in that

transition and models for success that already exist in the marketplace.



3. PREFACE TO 2010 EDITION

This is a white paper that was written originally by John Blossom in 2004. It is being updated to reflect

some of the changes in the content industry since that time, and will be reissued in a few months. What

is amazing is how this paper laid out the case for what was going to happen in the content industry for

the next six years. Almost all of its predictions and recommendations have proven to be the roadmap for

success in the content industry since that time. Almost none have been contradicted. Some of the

companies mentioned in this version of the paper have come and gone, while new ones have come

along. Source‐agnostic aggregation has reshaped the face of the content industry. Search engines such

as Google and Bing have used the New Aggregation roadmap to redefine what people view as a valuable

publication. New aggregators such as The Huffington Post have leveraged the New Aggregation model

to provide a source‐agnostic approach to creating value in publishing that challenges traditional

publishers to reconsider their models. More enterprise‐oriented publishers are now moving towards

interfaces and marketing arrangements for their content that maximize its value within a New

Aggregation model. And social media, referenced heavily in concept if not in name in this paper, has

changed the balance of what types of content need to be aggregated – and how they are aggregated.

In spite of these types of advancements, though, the publishing industry as a whole still fights against

the New Aggregation model. Therefore, the lessons of this paper are as valuable today as they were in

2004. Feel free to provide feedback on the paper that will help us to shape its next edition so that its

lessons may be adapted to the concerns that you focus on most today.

4. BACKGROUND

The concept of creating value out of a collection of content is as old as the cave paintings of prehistoric

humans, a concept that has formed the highly profitable basis of the publishing industry since its

inception. Through books, journals, newspapers, Web portals, databases and search engines publishers

and technologists alike have fashioned an array of products and capabilities that people have been

willing to pay for to get valuable collections of information and experiences at their fingertips.

Aggregation of content is a fundamental factor in creating knowledge that can lead to action: people

want to know they have most of all the information available and needed to make an informed decision.

People like having access to content collections, sometimes just for the sake of having them.

But over the past few years the content industry has reached a tipping point as to where and how value

in aggregating content is formed. Long‐held assumptions about how companies may create content

value in aggregation are being upended by the proliferation of technologies and content consumption

models that are challenging many of those fundamental assumptions. In virtually every segment of the

content industry established giants must grow ever larger to retain profitable operations. Something has

changed in aggregation, something that many publishers and distributors of content are reluctant to

acknowledge in its entirety.

Yahoo! was one of the early heralds of a new period in aggregation services when it started adding little

banner ads at the top of its search portal pages several years ago. Search engines were no longer



providing just technology but money‐making destination content, aggregation on the fly from a myriad

of sources that few would have taken seriously as content before search technology made them

available to anyone with a browser. More recently file sharing services such as KaZaa have challenged

premium content distributors to consider the power of individuals with access to new powerful and

affordable content distribution technologies that can easily bypass traditional electronic distribution

channels for premium content.

In major enterprises aggregation of published content is only a portion of a rich tapestry of content

weaved from internal and external sources into highly productive work environments. The advent of

powerful search technologies and Web content management systems are enabling institutions to create

portals that enable people in their organizations to take on content publishing and aggregation roles

traditionally reserved for external suppliers. With the advent of stringent corporate governance

regulations many of these institutions are now required to have more sophisticated management and

control of their own content than do the content aggregators that supply them with premium content.

All these and many additional facets of content aggregation have created an environment that requires

us to carefully how content aggregation as a business model may thrive moving forward. This paper will

consider these trends in detail and offer concrete and viable ways in which content suppliers,

aggregators and consuming institutions may benefit from the New Aggregation.

5. WHAT IS AGGREGATION?

Content aggregation is the act of assembling and managing sets of content collected for use by an

audience. Many different products and services may be thought of as providing aggregation. For

example, a newspaper is an aggregation of content from journalists, news wire services and other

sources. A bookstore or library aggregates books, journals and other media for use or purchase by

consumer, professional or academic audiences. A cable television service aggregates video channels and

related multimedia services through a common distribution mechanism to audiences in local or regional

markets. A database service (LexisNexis, Factiva or Thomson Dialog) aggregates news, journals and

professional information produced by other publishers for distribution to individuals and institutional

audiences. Online services like Yahoo!, MSN and AOL collect content from traditional publishers and

non‐traditional sources for presentation to global and regional audiences.

All these models remain highly successful in their own right. However, some companies using

aggregation business models are having a hard time demonstrating they are providing value to their

respective audiences:

Newspaper revenues are largely flat or in decline, with most growth centered on still‐young online operations.

Bookstores are facing challenges in maintaining content‐based revenues, becoming more like cafes and gift stores than aggregators to boost margins.

Library budgets in many public and private institutional sectors are facing severe challenges and stunting the revenue growth of aggregators serving these markets. The value of content



aggregation services that libraries provide is no longer a base assumption for many library patrons used to online content access, even where libraries are well used and appreciated.

The following table illustrates the relatively slow revenue growth experienced by many of the leading

traditional content aggregator services in comparison to leading Web content outlets:

Company 2001-02

2002-03

1H03-1H04

Yahoo! 33 71 163

Borders 3 6 9

Factiva 0 -2 5

ProQuest 7 10 1

LexisNexis 1 -2 3

The New York Times

-1 5 2

Underlying publicly reported revenue figures adjusted for comparison in similar calendar periods

Table 1. Percentage of Gross Revenue Growth for Select Aggregators, Period‐on‐Period

Certainly there are exceptions to this overall pattern, but even these few examples demonstrate that

aggregation is a low‐growth business for many prominent aggregators.

6. ATTRIBUTES OF AGGREGATION VALUE

To understand better why the value associated with content aggregation is undergoing significant

changes it helps to understand what provides value in content aggregation. There are several attributes

that comprise aggregation services:

Commercial Supplier Agreements. Much of the premium content aggregation business has been based on the concept of having the rights to multiple sources of hard‐to‐obtain content and managing the commercial agreements with these multiple suppliers. When institutions enter into commercial supplier agreements from multiple content vendors on behalf of their staff or patrons they, too, act as aggregators of content value. As institutions and individuals move more towards “just in time” purchasing of premium content for specific purposes and form large purchasing consortiums for key content sources, traditional aggregators face the devaluation of this kind of service.

Collection. The ability to collect content into a discrete and coherent collection is thought of as a core value in aggregation. Traditionally the concept of collecting content has implied storage of content in a central location. With the advent of search engines and underlying technologies that make traditional databases less important in defining content collections, though, aggregating content into standing collections is far less valuable than before.



Normalization. Content comes in many formats and in many degrees of quality. A traditional value in aggregation is to make content consistent in its form and presentation, as well as to provide checks and processes to ensure that specified standards of content quality are met. Quality controls may be mechanical, as in software that checks for likely data errors, or editorial, as in the process of approving content for publication or posting. With the advent of widely accepted technical standards for defining the structure of content and increased corporate regulations for reporting content internally and externally, though, normalization expertise provided by content aggregators is not as valuable as it used to be.

Value‐Add Content. Providing a collection of pre‐existing content has some value, but being able to add content to a collection that is unique to a given collection or usage context can multiply the value of aggregation significantly to both suppliers and users. In today’s content marketplace value‐add content comes from a wider array of suppliers than ever before and is delivered in new ways that challenge traditional aggregation models.

Indexing. Being able to locate content in a collection is as important as having a collection: without ease of access, the value of aggregation is highly limited. Today’s search engines minimize the value of a single content supplier’s indexing, though as more individual and institutional content users demand indexing that can span multiple content collections and place it in a broader context than one aggregator can manage.

Storage. Being able to store content efficiently for future use is an important aspect of providing aggregation value for archived collections. Storage costs have been reduced to virtually nothing for even vast collections of content, though, no longer providing aggregators with unique operational advantages. At the same time corporate governance regulations have pushed institutions towards far more sophisticated and reliable content archiving capabilities, oftentimes with more content security and rights management capabilities than provided by today’s aggregators.

Retrieval. Being able to retrieve and present content efficiently from a stored collection has been a traditional aggregator advantage. Search engine technology has made retrieval a general function, no longer requiring the specialization of content aggregators in many instances.

Access Control. Having an aggregator manage access to premium content in a secure fashion is oftentimes desirable from a publisher’s perspective. But many publishers now manage this function themselves with efficiency, even as content users demand the ability to access and redistribute content in a wide range of settings that challenge traditional access control methods.

Distribution. When computer networking was relatively expensive and rare the benefits of electronic content aggregation for managing distribution were fairly clear to both publishers and purchasers. Now ubiquitous and inexpensive networking makes the “where” of content both less important and more complex than ever before. Content distribution still provides an edge where expertise in distribution technologies is at the core of a supplier’s value proposition but most of today’s content aggregators and publishers can no longer afford to focus on those skills cost‐effectively.

All of these attributes are still part of the scenario for content aggregation, but as noted there are fewer

and fewer companies that can provide the full range of these attributes profitably. Why is that so ‐ and

where are the pressures on the traditional aggregation model leading today’s publishers and suppliers

of premium content?



7. THE TRADITIONAL AGGREGATION MODEL : THE FACTORY

In the traditional aggregation model, one company performs or contracts for all the functions of content

aggregation to provide a base of clients with a finished product based on content provided from

numerous publishers, authors and other content sources, including sometimes their own unique “in‐

house” content. Be it a publishing house, a newspaper, a news and journals retrieval service or a

business and scientific data supplier, the profitability of aggregation services has been premised on

having all the components of aggregation under its command. This is illustrated in the pyramid‐like

structure found below in Figure 1, in which one content production capability provides a base for the

next capability. It is similar to the model of manufacturing automobiles introduced by Henry Ford and

others when massive quantities of standardized components from internal and external suppliers were

assembled in a central facility to ensure the economies of scale, trained labor and product quality

required to produce a product affordably.

Figure 1. The Traditional Aggregator Service Hierarchical Model

In the era of printing press dominance, the correlation between the factory model and the publishing

and aggregation process was exact: publishers were manufacturers and distributors of content from

centralized plants. In the more recent era of computers the “factory” became a computer center, with

the relational database as the primary production engine , a software method for organizing content for

efficient aggregation. Databases allowed for efficient content collection, normalization, indexing,

storage, retrieval and access control, capabilities around which content aggregators developed

commercial supplier agreements and distribution channels.

Retrieval

Storage

Indexing

Value‐Add Content

Normalization

Collection

Commercial Supplier Agreements

Distribution

Access Control



Why did this model succeed so well for so long? In large part because it had no viable competition. As

illustrated in Figure 2 below, the underlying basis for centralized production control’s efficiency is the

premise that the producer has strong technology to produce a product and that the client for a product

has comparatively weak technology to produce the same. With technology dominance came premium

prices.

Figure 2. The Basis for Traditional Aggregator Strength is Technology Imbalance

In this representation of the traditional aggregation model, the production pyramid results in a “choke

point” –the point of value control ‐ at the top of the production pyramid at which the value of an

aggregator’s products and services can be easily established and maintained prior to fanning it out for

distribution to clients who have no choice but to accept the control that the vendor has over accessing

the content product. Once the product escapes the control of the producer it is in the hands of the

purchaser as they please.

8. THE NEW AGGREGATION MODEL : THE NETWORK

Content aggregation has changed forever due to two key factors: inexpensive, powerful computers and

the Internet. The average new desktop or laptop computer has the ability to collect, produce, store and

distribute vast quantities of content efficiently; even the relatively inexpensive, pocket‐sized Apple iPod

can store up to 40 gigabytes of information, enough for thousands of multimedia documents and

recordings, while the processing power of today’s desktop computers dwarfs the needs of all but the

Centralized Content

Aggregation

Centralized Content

Distribution

USERS WITH WEAK TECHNOLOGY

PRODUCERS WITH STRONG TECHNOLOGY

POINT OF VALUE

CONTROL



most demanding software designed for individual use. While it’s easy to imagine that new forms of

storage and new production technologies will create more demand for content storage and generation

by individuals, already at these levels simple and affordable devices intended for use by individuals are

capable of being both content “factories” and content “warehouses” of a scale that exceed the abilities

of individuals to absorb that content easily. To think of it in terms of traditional economics, we have

created an infinite supply of content production capacity and storage capacity, which creates huge

pressures on any factory‐oriented content aggregation model to produce goods and services at a profit.

The Internet exacerbates the problem of profitable content production in the factory model

significantly. With the Internet one effectively eliminates distribution as a competitive barrier, a factor

that favors not only traditional content “factories” but virtually any node on the distribution network

that can be both factory and storage units for anyone in the world. Designed inherently to resist

centralized control and bottlenecks, the Internet makes it simple for individuals and institutions to

create their own aggregation capabilities locally using powerful and affordable technologies and then to

create and to redistribute content to other individuals and institutions with ease. As illustrated in Figure

3 below, the point of strongest value control – the “choke point” – is no longer the aggregator’s

“factory” but the Web‐connected desktops of individuals and the computer rooms of institutions where

most content aggregation now occurs. Either of these new choke points can create their own pyramids

of aggregation from content sourced from the Internet and local sources and distribution pyramids

locally and within the greater distribution funnel of global content.

Figure 3. In The New Aggregation Strong User Technology is the Focus

Decentralized

Content Aggregation

PRODUCERS WITH STRONG & WEAK TECHNOLOGY

POINT OF VALUE CONTROL

USERS WITH STRONG & WEAK TECHNOLOGY

Decentralized

Content

Redistribution

POINT OF VALUE CONTROL

USERS WITH STRONG TECHNOLOGY



Thus the worries about file sharing networks representing an unusual outside threat to mainstream

content aggregation and distribution are largely misplaced. In fact file sharing networks and other peer‐

based content distribution methods represent the normative form of content aggregation given how

today’s content technology has empowered content consumers in far greater proportion than content

aggregators. The willingness of individuals and institutions to pursue their own aggregation schemes

using that technology is only natural. From simple weblogs collected by newsreader software to global

“server farms” to search engines scanning innumerable Web sites, the world is awash in technology that

allows any individual or institution to collect high‐quality content from any number of sources and share

it easily with others. File sharing is a simple example of capabilities that are deployed in many variant

forms that place technology‐empowered users at the center of the world of content. By taking in and

generating more content sources than any traditional aggregator could contemplate assembling in their

“factory” database, the networked world itself has become both the content factory and its warehouse.

In the view of Shore today’s leading publishers are the individuals and institutions equipped with

powerful and affordable publishing technologies who create valuable content for more audiences in

more venues than ever before.

Does this mean that aggregation is dead as a business model? Far from it: aggregation is thriving in this

environment – when its providers adapt to the concept of a user‐centric, network‐driven model for

providing their products and services and move away from the “all‐singing, all‐dancing” factory model.

The New Aggregation is the process of focusing product and service development on those specific

attributes of the content aggregation model that best suit the needs of specific audiences that can

participate aggressively in the content production, aggregation and distribution process.

Figure 4. The New Aggregation: The Unbundled Factory

Commercial A

greements

Collectio

n

Norm

alization

Valu

e‐Add Conten

t

Indexin

g

Storage

Retrieval

Access C

ontro

l

Distrib

utio

n

Collectio

n

Norm

alization

Valu

e‐Add Conten

t

Indexin

g

Storage

Retrieval

Access C

ontro

l

Distrib

utio

n

Aggregators, Agents and Networks

Individuals

Institutions Individuals

Institutions Individuals

Institutions

Commercial A

greements



In the traditional aggregation model, content is production‐centric, building a monolithic service similar

to our pyramid diagram in Figure 1. By contrast, as illustrated in Figure 4 above, the New Aggregation

topples that pyramid and turns it on its side, with individuals and institutions being able to select specific

attributes of aggregation products and services from multiple suppliers via aggregators and other agents

as well as without any intermediaries via network connections. At the top of the value chain Individuals

and institutions may in turn feed content to others to amplify its personal and professional value and in

turn gain value from one another via business or personal transactions. Understanding individual and

institutional users as key components of the aggregation model is a crucial factor in developing a

services‐driven aggregation model. The attributes that many aggregators once provided as necessary

components of the production chain are now often replicated by tools readily available to their clients,

who are able to combine them in innovative ways to create content value more efficiently than

traditional publishers and aggregators. When aggregators offer product attributes that are largely

redundant to client‐supplied capabilities they increase the likelihood of competitors eliminating those

redundant attributes to produce content value for clients more cost‐effectively. Clever marketing and

implementation techniques can overcome these redundancies to some degree but they cannot

eliminate the inevitable pressure on profit margins to eliminate them. Competitive stances for

aggregators therefore must be evaluated not only in terms of their positioning against other similar

companies but also on an attribute‐by‐attribute basis with all those suppliers that meet the needs of

their target audiences – including technology companies and the individuals and institutions equipped

with technology products.



9. ATTRIBUTES OF AGGREGATION: TRADITIONAL VS. NEW

The full force of why there is a new regimen for aggregation can be seen most clearly when one

examines what is happening in specific attributes of aggregation. The following table illustrates the shift

in methodologies from traditional aggregation to methods being pioneered and perfected in the New

Aggregation:

CONTENT AGGREGATION VALUE ATTRIBUTES

Attribute Attribute Methods

Traditional Aggregation

New Aggregation

Commercial Agreements

Licensing and Distribution Agreements with suppliers

Licensing Agreements with purchasers

Billing and payment services

Agreements for accessing databases

Precursor to collection or distribution

Redistribution discouraged, difficult to monetize

Agreements tied to distribution channels

Billing and payment usually centralized via aggregator

Agreements for accessing content objects

Objects may be distributed prior to collecting licensing fees

Redistribution encouraged and monetized

Agreements may be independent of distribution channels

Oftentimes no billing, direct billing via original suppliers or billing via other parties

Collection Making content available for control and distribution

Collection into central facilities controlled by aggregator

Collection generally mandatory for distribution

Generally project-driven by data center staffs of supplier and aggregators

Content oftentimes never collected for permanent storage, or indexing data only

Client oftentimes provides storage if required

Oftentimes automated with no supplier intervention

Normalization Presenting content in a normalized form and format for easier use and distribution

Identifying and correcting content that may not meet expected standards

Oftentimes requires adaptation of content from a proprietary supplier or aggregator format

Standards closely held, oftentimes opaque

Standard quality control an essential component

Content generally developed to widely accepted industry standards with no adaptation required

Standards open, public and easily accessed

Quality control oftentimes provided by peer review






New Aggregation

Value-Add Content

Deriving additional content to complement supplied content

Centrally designed

Centrally managed

Centrally archived

Oftentimes user-driven

Individual and collaborative sources

Generated or stored in content objects or local repositories

Indexing Generating information that will ease content storage and retrieval

Indexes generally limited to collections under license by aggregator

Additional content indexed separately

Indexing based on content attributes and established taxonomies

Indexes generally include all relevant content, whether under license or not

Indexing may include input from content users (links, usage, etc.)

Indexing may include dynamically generated taxonomies

Storage Retaining content for retrieval and delivery

Content stored in central databases of aggregator with some copying to client sites

Archive retention based on commercial policies of aggregators, oftentimes without long-term guaranteed access

Content storage oftentimes distributed, content retrieved and stored at client site, at individual publishers’ sites and separate archiving services

Archive retention requirements based on archiving standards or regulatory policies

Retrieval Locating content for delivery

Search engines tailored to highly structured content

Searches for aggregator’s content only

Multiple search filters and criteria

Interfaces oftentimes oriented towards information professionals

Search engines capable of locating both highly structured and unstructured content

Searches across multiple sources in multiple locations – including client sources

Simplified searches and “advanced searches”

Intuitive search interfaces, some using natural language






New Aggregation

Access Control

Managing permissions to access and use content

Database login “choke point” , limited to subscribers

Little direct management of redistribution

Multiple access models: open access, tiered access, federated access or digital rights management

Rights management and copyright management interfaces allow for effective monetization of redistribution

Distribution Making content accessible to individuals and institutions who are qualified for access

Physical and electronic media

Public and private network delivery

From central “choke point” to clients

Electronic media with physical as a service option

Primarily public network delivery to local networks, or vice versa

Distribution from multiple nodes and sub-distribution points, including publishers’ sites, download portals, clients and individual users

10. THE IMPACT ON TRADITIONAL AGGREGATORS

As the above table illustrates there are fewer and fewer attributes of aggregation in which traditional

suppliers of premium content hold a clear advantage:

Commercial agreements, while still the “bread and butter” of most aggregators, are slipping away as their own content and technology suppliers become more independent in their marketing efforts.

Content collection often falls in to the hands of their clients, especially as they become adept at collecting their own content via Web‐centric technologies and publishing content to their own networks of associates and clients.

Vendor‐proprietary content standards are largely in disfavor and content quality assurance is becoming a specialty service fairly rapidly, accelerated by the growth of cost‐effective services markets such as India.

Value‐add content just as likely to be generated via client facilities, using software and Web services (Web‐delivered digital objects that include both content and software functionality) developed by technology companies or their own staffs.



Indexing requirements for clients oftentimes exceed the large but universally limited universes of content provided by the traditional aggregator; storage of content needs to be more at the convenience of the client than the provider.

Retrieval of content can come via any number of client‐centric channels, rarely controlled by the aggregator.

Access control no longer aligns with the technology needs and capabilities of clients who require transparent access to content from multiple repositories.

Distribution can come via any number of established and innovative channels, most of which are not controlled by aggregators directly.

With so many points of potential weakness, the impact of the New Aggregation on traditional

aggregators is turning out to be immense, even though its full impact on aggregator and major publisher

revenues is seen mostly in terms of stagnant revenue growth. With traditional aggregators having

virtually no long‐lasting and clear‐cut technology advantages over their clients and suppliers,

aggregation as we know it today is held together largely by the inertia that comes from the

unwillingness to unravel established commercial agreements and increasingly clever work by

aggregators in distributing premium content via software applications that wed them more closely to

their clients’ needs. Yet since at the core of their operations many aggregators no longer offer significant

operational advantages via technology, distribution advantages may be short lived at best as content

suppliers employ other content distribution routes with more profitable or commercial terms

management or more effective content distribution.

The solution for many traditional aggregators is clear: they must decide which attributes will benefit

them in the New Aggregation model and move to focus on those attributes more exclusively. The

business models that come out of that focus, however, are likely to differ significantly from those they

employ today.

11. HOW VENDORS APPLY THE AGGREGATION MODEL

To see how aggregation models differ in the New Aggregation versus traditional aggregation, it may help

to compare an established aggregator to companies that are playing new roles in aggregation along the

lines of the New Aggregation model. For the purposes of broad contrast I have chosen for comparison

purposes:

LexisNexis, a major aggregator of professionally‐oriented content

Google, the leading open Web search engine used in both professional and personal settings

Verity, one of the leading search solutions providers in enterprise content

Weed, a technology company established to promote the effective sale of premium content via file sharing networks and other peer‐to‐peer and supplier‐oriented distribution channels

The following table summarizes how the key attributes in these vendors’ offerings vary from one

another in general terms:



CONTENT AGGREGATION MODEL COMPARISONS

Attribute LexisNexis Google Verity Weed

Commercial Agreements

Central attribute; traditional terms and conditions with suppliers and clients, central billing.

Mostly between suppliers and clients, no billing except for advertising services

May integrate premium content via Factiva, but not involved in premium content terms, no billing.

Central attribute; ability for suppliers and redistributors to collect via Weed, outsourced billing.

Collection Collects most content in a central database

Indexing and contextual content collected

Indexing only collected

Clients and other networks mostly responsible for collecting

Normalization Collected content is normalized into internal standards. high QA standards enforced by staff and technology

Formats under control of clients and distributors, standard Web interface, no content quality assurance

Formats under control of clients and distributors, standard Web interface, no content quality assurance

Enables industry-standard file distribution, no content quality assurance

Value-Add Content

Derived content stored and distributed

Derived content linked to in search results, contextual ads

Derived content linked via search interface and Web services

Distributors and clients provide value-add content

Indexing Indexes primarily databased content

Indexes all exposed Web content, some databased content

Indexes client content, federation of premium and Web content

Indexing responsibility of distributors and clients

Storage Primarily central storage in database

Only indexing storage

Only indexing storage

Primarily on client and file sharing networks, initial download storage

Retrieval Primarily via central database

Primarily via supplier sites

Primarily via client-internal and supplier sites

Via client storage and file sharing networks

Access Control

Database login or commercial terms, redistribution not controlled

Responsibility of individual suppliers, redistribution not controlled

Oftentimes integrated into federated access, redistribution not controlled

Rights management checks access rights for each item accessed, redistribution controlled and monetized

Distribution Via Web, private networks and mobile device networks

Via Web and mobile device networks

Via private networks, Web and mobile device networks

Via Web, file sharing networks and mobile device networks



Note in this comparison how new players in content aggregation gain advantage by paring away the

most expensive and complex components of aggregation – storage, quality control and centralized

commercial agreement management – and concentrating their business models on those aspects of

content that are least replicated elsewhere and most valuable to their audiences. Google still has

extensive infrastructure for content indexing, but it’s free to change that infrastructure with few

expensive dependencies on suppliers and users. This frees Google to concentrate more internal

resources on providing indexing power. Verity and other enterprise search technology providers also

steer clear of storage, QA and commercial content issues (though content management providers and

archival specialists embrace them in narrower niches), concentrating primarily on indexing and access

control management. Weed discards almost all attributes of the traditional aggregation model, retaining

only commercial agreements, standards and access control as primary attributes, yet provides effective

content monetization for multiple sources via numerous collection, storage and distribution models.

Each of these New Aggregation players discards those attributes of the “factory” that no longer make

economic sense to them and concentrate on those attributes of aggregation that benefit their audiences

most within user‐centric content distribution networks.

12. SUCCESSFUL BUSINESS MODELS IN THE NEW AGGREGATION

All major aggregators provide some blending of old and new attributes in their current offerings, even as

many vendors who provide New Aggregation services also opt for aspects of traditional content

aggregation. But overall there are distinct business models arising in aggregation that are clearly

different from those that have formed the basis of traditional publishing. Following are some of the

more significant models evolving from the New Aggregation model:

NEW AGGREGATION BUSINESS MODELS

Model Key Attributes

Key Strengths

Key Weaknesses

Examples

Open Collection Search Engines

Public and Enterprise facilities indexing content and providing relevance and context

Generally no limits to types, sources and volume of content

Source-Neutral; quality not presumed

Easily adapted to a wide range of content collections

Highly tuned new technologies

Reliant on others to provide access control to premium and restricted content

Limited content monetization capabilities

Content quality difficult to ascertain

Google

Yahoo!

Verity

Endeca

FAST

IBM “Masala”

ISYS

Content Sharing Networks

Collaborative content collection and distribution

With and without rights management

Enabling most knowledgeable and capable content experts

Infinite storage capacity and flexibility

Sometimes difficult to index sources

Archival access uncertain

Loose borders on content usage

KaZaa

Groove

Microsoft SharePoint

OpenText LiveLink





Key Strengths

Key Weaknesses

Examples

Archival Products and Services

Storage arrays with vast capacity with content-oriented addressability

Affordable, highly scalable mass storage

Minimize impact of “content glut”

Ensure that content in original form is accessible

Ongoing access

Standards for addressability still not universal

Efforts for independent archiving of commercial content weak

EMC

DOI (Content Directions)

Alexandria Project

Content Management

Database-driven development, management and delivery of content for individuals and enterprises

Integration of commercial content via Web services

Creating highly reusable content in enterprises

Workflow and collaborative content easy to develop

Weblogging and cheap/free CM packages popularizing publishing

Enterprise-scale systems expensive

Learning how to be an effective publisher is harder than most would think

Content ecommerce rarely integrated well

Vignette

IBM WebSphere

Stellant

PHP Nuke

MovableType

ECNext

Content Mining & Content Services

Deriving useful content from existing Web sites, networks and databases

Packaging derived content for reuse and sale

Outsourced quality assurance

Streamlining of content repurposing to specific client needs

Quickly configurable and highly adaptable

Derived content may lack quality controls comparable to commercial sources

With no formal agreements with sources content may come and go

Eliyon

Connotate

Inside Scoop

Rights & Distribution Management

Ensuring and enabling usage and commercial terms

Enabling authorized redistribution

Allows for content object use in many settings without logins

Ability to control value and security of content as it is redistributed

Implementation has been awkward in the past, but now much more streamlined

Lacking industry standards

Sealed Media

Copyright Clearance Center

Weed

eMeta





Key Strengths

Key Weaknesses

Examples

Contextual Advertising

Assembling and placing contextual ad inventory in Web Sites

Enabling automated bidding for ad inventory

Enhancing contextual content value cost-effectively

Enables otherwise invisible content to get exposure

Limited capabilities to date for placing content itself contextually

Algorithms used to manage bidding process not very mature

Google AdSense

Yahoo! Overture

Kanoodle

Many of these solutions have been available for some time in various forms and some are used by

aggregators for key operations. For example, content management has been used since the beginning of

the Web era and is used by many commercial publishers for their operations. But it’s been only recently

that content management suppliers have provided mature and complete enterprise‐level content

management solutions. Content management and Web portal providers now compete very effectively

with aggregators who are vying to provide workflow management software as a way to lock in content

sales.

No single example of a services‐driven aggregation model may appear to present an impressive threat

individually. But when taken in sum all of these are instances of increasingly successful businesses that

are taking away key segments of the aggregators’ traditional business model. These new suppliers

succeed with individuals, enterprises and commercial publishers who are looking to have content

respond to a far more sophisticated set of requirements than most aggregators can manage to

encompass without threatening their core revenue base and margins. Thus most aggregators fail to

invest in content technologies anywhere near the level required to compete with players running with

New Aggregation attributes. In comparison New Aggregation companies are invested very highly in the

breakthrough content technologies that help the individuals and institutions that they serve to produce

content value breakthroughs.

13. WHERE TRADITIONAL AGGREGATION MODELS STILL MATTER

In the world as we know it old methods and models rarely disappear altogether, but instead find their

way into new forms of use. There will always be content aggregators with useful databases, just as

newspapers and books continue to be published some twenty years after the advent of personal

computing. Content databases will continue to thrive when their contents are truly unique or add value

to audiences at crucial moments when their own processes could not hope to replicate their value. But

even in these instances, the content “factories” as we know them may find themselves with increasingly

abbreviated versions of the production pyramid, focusing on only those attributes of aggregation for

their audiences that are reasonably profitable. For example, having databases that store data that is

highly suited to the database technology in use and difficult to replicate elsewhere may remain the basis

for a very viable aggregation business model, but standards for querying and delivering that content



may “lop off” much of the traditional business model built around other aggregation attributes. So even

when the factory model still applies in terms of producing content it is really a choice between selecting

a smaller market in which the full model can still operate cost‐effectively or servicing a broader market

with fewer aggregation attributes. Improving production efficiencies and techniques may be necessary

to maintain competitive production, but the pace and breadth of technology development and

distribution is unlikely to allow those improvements to be long‐term market differentiators unless they

take full advantage of the peer‐to‐peer strength of the New Aggregation model.

At the same time there will continue to be numerous individuals and institutions that prefer to have an

aggregator service act as a “choke point” for simplifying relationships with content sources and services.

For these clients having a “single neck to choke” when managing external content sources still offers

them operational advantages and many content purchasers will continue to purchase professional

content in this mode for some time to come. But as the New Aggregation model continues to take hold,

suppliers of “choke point” content aggregation services are beginning to discover that in the long run

this may be an opportunity that damages both revenues and margins. The obligation to maintain a wide

array of content increasingly available via other channels continues even as clients continue to put

pressure on these aggregators to lower price points or to add more content sources to diminish the

commoditization of their databased content. As suppliers learn how to allow clients to “choke” specific

content aggregation attributes separately across a wide range of content sources these pressures will

diminish, leaving aggregators to enjoy a wide and flexible range of aggregation models to suit their

clients’ needs and focus on the specific components of aggregation that offer their clients the most

value.

The key operational advantage that traditional aggregators provide is quality assurance procedures to

help normalize content into highly usable and standardized forms and formats. With some forms of

data‐oriented content this advantage will continue to endure, but for many forms of content, especially

text‐based content and entertainment content that is easily normalized via Web‐oriented standards,

these advantages will be limited or best pursued as part of a business model using quality assurance as

one of a limited set of product attributes. Notably traditional aggregators known for data quality

assurance such as Dun & Bradstreet find themselves increasingly selling their quality assurance

capabilities as outsourced services for their clients trying to rationalize their own business content –

already providing some selection of formerly product‐centric attributes and packaging them as

aggregation services.



14. A CHECKLIST FOR APPLYING THE NEW AGGREGATION MODEL

The New Aggregation challenges publishing institutions adding value to content via aggregation to

consider how this major shift affects their operations. Not every aggregator needs to worry about this

shift immediately, but it will help to understand when concern is warranted. The following is a simple

checklist of key questions for aggregators and publishers using aggregation services to consider when

approaching whether and how the New Aggregation may be providing opportunities or threats to their

operations:

Is your revenue model locked in to login‐based access to premium content? The New Aggregation is both user‐centric and network‐centric: rights to access content must

follow its usage through both initial distribution and redistribution to multiple devices – an

environment more conducive to rights management schemes attached to the content itself

rather than to a database. Remember, individuals and institutions equipped with powerful and

affordable content technologies are today’s leading publishers. It is you, the aggregators and

publishers, who are gaining access to the world’s publishing arena, not your clients.

Are your content supplier commercial agreements tied tightly to your centralized storage and distribution technology? In traditional aggregation, locking in content suppliers to your storage and distribution

technology was a key tactic for ensuring supplier and client dependency. This works when you

control the technology that matters most to the client, but no longer works well at all for

secondary storage and distribution. Apple and Microsoft will do well with locking music

publishers into iPods and Portable Media Centers because the technology is close to the users’

needs and integrates well with standard networks and devices. Not since the Lexis UBIQ “Red

Box” and the eponymous Bloomberg data terminal have premium business content providers

tinkered effectively with their own user‐oriented devices. In this environment, tying commercial

agreements to centralized storage schemes will please neither the supplier nor the client and

lead to trailing revenues.

Is your content mostly text‐based? Specialized databases that have unique data as their primary content are less vulnerable to the

New Aggregation than text‐based aggregators. The original concept of storing text in a database

was to enhance indexing and repurposing. But effective indexing no longer requires storage of

content in a central facility and content repurposing is simpler now that standards based on

eXtensible Markup Language (XML) and other content normalization standards are prevalent.

Data providers still have much to worry about if their data is not certifiably unique in quality and

scope, especially since recent U.S. court judgments do little to protect databases of facts.

Does your ability to store and retrieve historical content provide real product advantages? The ability to store content indefinitely with immediate retrieval is not a major trick for most

institutions, which are required to do so in most instances for regulatory compliance purposes.

On the other end of the scale, petabyte‐scaled storage fits conveniently into the corner of most



rooms these days. If you can do clever things with historical content that distinguishes it, then

great – otherwise, consider outsourcing it ASAP to services more adept at long‐term storage.

Does your content integrate easily with client portals and processes? This is an area in which many aggregators have made significant progress in the past few years.

“Workflow” is the buzzword of the moment for many publishers, and rightfully so from many

perspectives. What’s largely missing at this point from aggregators is sophisticated integration

that makes it as easy to search for and insert content into a portal application as looking

something up via a search engine. If you’re on the cutting edge of portal development, you can

buy yourself some time to transition your business model into something more in line with the

New Aggregation’s long‐term trends. If you’re not, you had best pick your battles carefully – and

soon.

Can you easily enable, track and take advantage of content redistribution by clients as a marketing and revenue opportunity? Without an effective approach to rights management and content security most commercial

publishers and aggregators are slipping behind their institutional and individual clients in being

able to manage content value in ways that fit today’s content distribution realities. In a multi‐

device, multi‐role content consumption environment, being able to treat those individuals and

institutions as inherent and central components of the premium content distribution process is

essential to long‐term revenue growth. Those who control rights standards and methods will

control content commercialization in the New Aggregation ‐ leaving most publishers and

aggregators far from the action.

15. RECOMMENDATIONS AND CONCLUSION

15.1 General Recommendations “Good content is where you find it” is a favorite truism of ours at Shore. The marketplace for content

knows no borders, leaving most of today’s aggregators of premium content scrambling to figure out

how to position published premium assets. Most aggregators must confront a market that demands

much more value than most publishers and aggregators can provide individually. There is still a large and

significant place for commercial content aggregation in the New Aggregation model. However, the

shape of how money is made in content aggregation is changing rapidly because of this new model’s

strength. Except where content and central technologies are truly exceptional and unique, centralized

“choke points” will be of little use, leaving most content money to be made either inside user‐defined

and controlled choke points (search engine results, portals, local storage devices, online communities)

or very intertwined with high‐value network services (Radianz, cable television, XM Radio). Service

providers in the middle layer of this marketplace must specialize radically to survive in this new mix,

either on the basis of content sets or aggregation services – or both.



There is no perfect answer to this problem, but there are a few general strategies that should be

considered for all concerned with the fate of aggregation services:

Unless they provide real value, lose your databases. In many instances the persistence of centralized databases that repeat content found elsewhere

is a useless anachronism that will only isolate premium content from the true contexts in which

it will find value. Tools such as MarkLogic’s Content Interaction Server provide the ability to

access content from many sources in a normalized form without resorting to typical databasing

schemes. Unless the content is unique in its context, put database‐centric business models

aside. In most instances a centrally controlled database no longer provides a great marketing

advantage for major aggregators, even when it provides technological advantages within the

scope of its content.

Accept that monetization of distributed content objects is a necessary and ultimately more powerful commercial model than controlled access to databases. Again, good content is where you find it, so allowing content objects to flow to the point where

their value can be realized as quickly and effectively as possible is the most effective way to

ensure rapid and profitable content monetization. Enabling publishers of ALL content to create

and distribute these content objects with monetization capabilities built in to their framework

will be the cornerstone technology in the New Aggregation. Aggregators and publishers

servicing professional markets lag behind both their clients and consumer markets in developing

and deploying effective rights management techniques. The major aggregators that adapt

rapidly to rights management controls and move away from database access controls will be the

winners in the New Aggregation era.

Controlling distribution is not as important as controlling monetization. With so many powerful options for content distribution that are well beyond the abilities of

publishers and aggregators, including the current Information Lifecycle Management (ILM)

movement in corporate circles, it is largely pointless to control content distribution except in

those instances where there are few or no options for delivery (cable television franchises,

exclusive wireless networks, etc.). Allowing easily replicated electronic content to flow freely in

forms which ensure that monetization will be swift and convenient when it finds the right venue

is the key to effective aggregation services. Look at the Weed model of monetization carefully.

Like weeds, it’s far easier to have content find its right context when its movement is

unimpeded.

Be flexible in your approach to monetization models. In some instances rights management will be the key to this monetization process, but it need

not be the only solution, nor an “all or nothing” solution. Rights management and other controls

can enable not just purchasing but a wide range of access models, including subscriptions. Think

carefully about how your audiences value content in specific contexts, and work your

monetization models back from those human needs.



15.2 Recommendations for Commercial Aggregators As mentioned earlier many institutions are learning how to take advantage of the New Aggregation in

pieces and reaping significant advantages. But few major aggregators have embraced the notion that

these new techniques and technologies are anything more than useful extensions of their core business

model.

Accept that your storage‐bound search engines are of limited value. Your clients’ technology suppliers do it better, open Web search engines do it better – you have

neither the financing nor the positioning to provide superior content search capabilities in most

instances, in large part because your search engines are stuck on top of one database that’s

poorly integrated with your clients’ content and the Web. Except where unique content or

content structure makes their presence necessary or advantageous, try to allow content to flow

as readily as possible to where your search engine along with other search engines will

determine its uniqueness. If you can compete on a level playing field, the relevance of your

search will have credibility and will be integrated with other content sets far more easily. If you

can’t, then perhaps the searching business is not for you.

Choose which aggregation attributes will be your points of excellence. Quickly. With clients, publishers and common services taking care of storage for retrieval and search

engine companies taking care of indexing, this leaves the “front end” of the business –

interfaces, Web services and workflow products – and the “back end” – commercial

management – as the keys to success in supporting successful premium content aggregation.

Most aggregators will have to choose which of these will be their strengths, and work from

there.

Beware the lure of workflow. Products that integrate content into highly effective user interfaces are very hot right now and

can be expected to provide a great deal of value to aggregators for some time to come –

especially when they’re integrated into institutional workflows and operations. But for most

aggregators, workflow management can wind up being a shield that diverts attention from the

inherent weaknesses of their content base. For example, decades of improving client integration

and workflow via real‐time financial content products did not save market data vendors in the

financial securities sector from the inherent weaknesses in their content aggregation models

based on commonly available market data. Consolidation and thinner margins followed

inevitably, consolidation that is still unfolding. “Knowing the flow” can be valuable, but should

be part of a greater strategy of aggregation attribute repositioning.

15.3 Recommendations for Publishers Commercial content providers that produce mostly their own exclusive and original content have much

to gain in the New Aggregation model and have gained much already. The Web has enabled publishers

of all kinds to reach both consumer, academic and professional audiences via search engines and other

new channels without having to rely on traditional aggregators, opening up both challenges and

opportunities. The key challenge publishers using aggregation services face when introducing direct



Web‐based access is ensuring that direct Web access does not conflict with aggregation services in a

way that decreases overall revenue. Here are a few thoughts as to how publishers may approach the

New Aggregation and continue to reap benefits:

You must enable your content to be aggregated by anyone at any time without having to think about how it impacts your bottom line. Many publishers have implemented online registration processes to provide some degree of

control and knowledge of users. This creates a proliferation of “choke points” that reduces the

value of content in the user’s eye due to this inconvenience. Already tools exist to allow people

to circumvent these controls, a sure indication of their undesirability as a commercial

management tool. Premium publishers need to embrace rights management technologies

aggressively, preferably in standard forms that will allow them to provide a user with rights to

view content via any electronic distribution channel. Attaching enforceable commercial policies

to each and every content item distributed is an essential element in rationalizing traditional

aggregation channels with more user‐centric distribution methods. This will allow content to

flow into the hands of people who need it most and value it most as quickly as possible –

enhancing the likelihood of people recognizing its value.

Try to separate agents that can get content into the right context and agents that can manage the enforcement and fulfillment of commercial terms. Publishers have relied on traditional aggregators to provide both distribution and enforcement

of commercial terms of use. With distribution no longer a key strength of many traditional

aggregators, it may pay to consider how to license content for use by individuals and institutions

via agents that do not have to manage its distribution. Instead of having to negotiate dozens of

special deals with dozens of companies who would like to distribute your content, try to imagine

a world in which there are a handful of agents (ideally one) that can manage the technical

details of commercial use by consuming institutions and individuals independent of any specific

distribution channels via rights management capabilities. In this model there is still room for

traditional revenue streams such as subscriptions, “pay‐per‐view” and special redistribution

agreements, as well as new models such a peer‐to‐peer distribution. This new world of content

monetization is already upon us and promises to be very lucrative for those who know how to

manipulate the model to their advantage. Within this new model there is always room for

negotiating agreements that don’t fit this methodology well, but by focusing on simplifying

commercial terms with the ultimate consumers of content as much as possible it becomes far

easier to generate steady streams of revenue at maximum market penetration. This will all

happen – if publishers take the lead in fighting for it aggressively.

Focus on creating more fully featured content objects. Since content normalization is now more fully in the hands of commercial publishers and

increasingly redundant with the capabilities of traditional aggregators, it falls upon commercial

publishers to look much more carefully at how they package electronic content for use and

reuse. In earlier eras this meant looking at print, CD‐ROM and database options. But today’s

content marketplace favors rights‐protected content objects such as eBooks that can be moved



from platform to platform with relative ease and reuse. Publishers need to build features into

content objects that make them more useful to their audiences, features that can be upgraded

as necessary to increase the content’s value. This is likely an area where most publishers will rely

on suppliers and distributors to provide useful technologies, but unlike the traditional

aggregation model it need not be a matter of sending your “dumb” content into someone else’s

database where it gets “smartened up”: these services can be brought in‐house or added

externally via technology providers who do not have to take a role in content licensing and

distribution. The more of the content packaging equation you control, the more value you can

retain for yourselves, so getting smart about building content objects for Web services and

other forms of object‐oriented content distribution is an essential skill for every primary

publishing organization today.

15.4 Recommendations for Institutions In Shore’s view, today’s leading publishers are the individuals and institutions equipped with powerful

and affordable content technologies and a deep understanding of what people in their organization

need to accomplish their objectives. You are the real center of the content universe, yet you struggle

with suppliers of aggregated premium content whose products are still designed based on the premise

that commercial publishers and aggregators provide the leading edge of content value. In the meantime

your own content and Web‐sourced content demonstrate to you on a daily basis that while commercial

content is important and useful it’s not so important to be treated so differently from your other

content sources. The New Aggregation opens doors to new techniques that are already leveraged by

corporate, academic and public sector institutions in many ways beyond traditional aggregators’

capabilities. To accelerate the process of encouraging your suppliers to transition to more effective

services in the New Aggregation model, here are a few routes to consider when dealing with publishers

and aggregators:

Demand more unbundling of workflow applications, content licensing and other aggregator services. Many of these workflow‐oriented products are excellent, but the cost of locking in to one

aggregator at the expense of locking out content acquisition budget from other potentially

crucial sources that emerge is hampering the move to “on‐demand” content licensing and

purchasing. Appreciate the value that aggregators are providing in these applications, but

appreciate more fully how much you’re getting locked in to solutions that will hamper your

competitiveness in the long run. Content licensing should be fully independent from content

workflow wherever possible.

Consider carefully how you may employ rights management within your own institution to manage commercial content. Most suppliers of content for professional and academic use have been very slow to consider

how to implement digital rights management as a key content management technology. By

contrast many institutions have embraced DRM as a key mechanism to enable secure sharing of

content inside and beyond their organizations, even as DRM is gaining success quickly in

consumer content. If your content suppliers are unable or unwilling to adopt DRM, show them



the way by incorporating their content in your own DRM schemes. Combined with Information

Lifecycle Management storage schemes you have the ability to make commercial content a

permanent and well‐controlled part of your greater content infrastructure – no matter where

instances of it may reside. This will be especially important for corporate compliance purposes,

where the context in which commercial content has been used may be as relevant as the

content itself.

Consider how commercial content can be integrated into your search engine strategies more directly. Today’s major institutions are graced with both their own sophisticated search technologies and

open Web technologies to aid users in locating the right content for the right purpose. With

traditional commercial aggregation schemes, though, the best that most institutions can

manage for integration is federated search, an awkward mechanism at best, or indexed retrieval

via Web services. Caching commercial content “behind the firewall” is one widely‐used strategy

that can provide both more effective local indexing and less external knowledge of its use, but

can prove to be an expensive and complicated option for many. Consider how to source content

directly from publishers in a way that will enable its use more directly in your search

infrastructure, both via the open Web and via aggregators providing your search engines direct

access to their databases. Both publishers and aggregators may not feel terribly comfortable

with these arrangements at first, but when combined with digital rights management it makes

eminent sense to incite the movement towards object‐oriented publication by demanding

published content act the same as any other type of content in its ability to be manipulated by

today’s leading content technologies – regardless of its location.

15.5 Recommendations for Technology Companies Technology companies have much to gain in the New Aggregation model and have done so already.

Unfettered by many of the basic assumptions about content aggregation models companies like Google

and Open Text Have made tremendous strides by exploiting specific aggregation attributes with

precision and excellence. Yet it is not all sweet news for technology companies in this new environment.

Many struggle to find a business model that will take them beyond their own traditional models of

software licensing fees that are increasingly hard to justify on a component or feature level, while others

wrestle with what it really means to be a content services provider as opposed to a pure technology

play. Here are a few thoughts as to how content technology companies focusing on professional and

institutional sales can succeed in the New Aggregation environment:

Don’t get sucked in to the old business models as a growth strategy. Between a tiny number of lucky technology companies turned aggregators such as Yahoo! and a

galaxy of publishers and aggregators there are not many plays out there that are going to

capture significant market share replacing existing aggregators by doing their old models a little

better. Even Apple’s iTunes is starting to flounder as a destination content site as new

technology companies and distributors enter the picture to carve off pieces of the aggregation

puzzle. Stick to specific attributes of the aggregation model that match your strengths well and

let your clients decide how to mix and match them to their needs. Think IBM, which has been



successful at creating synergy with content providers while gradually developing key

components that strip away their core strengths.

Unless you’ve got really new technology, focus on specific content sectors. The graveyard of the content technology industry is lined with companies that tried to market

an idea without understanding which content markets were best suited for its exploitation.

Smart technology companies do research on which content market sectors need their

technology the most and develop highly tuned product development and marketing plans to

meet those sectors’ user‐level content needs. Get to know not just the stats and the outline of

those sectors but the personalities and work styles of the end users in great detail. In doing so

you’ll be creating content value and not just technology – positioning yourself for ongoing

marketing to that sector or a sellout to sector‐specific aggregators eager to hold on to revenues

and market share.

If you DO have really new technology, focus on dominating an aggregation attribute with it. Search engines and related technologies are glutting the market for indexing and retrieval

services, for example, but nobody does rights management well for content purchased by both

institutions and individuals. The company that can dominate with this capability will in effect

become the commercial hub for all professionally‐oriented content purchasing and licensing.

This may cramp the style of folks coming out of universities with concentrations in already

crowded content technology markets, but order them a few pizzas more to have them think

about that they can do with other more underexploited aggregation attributes and your new

technology will penetrate more markets far more quickly.

15.6 Conclusion In some ways the New Aggregation is hardly new at all: the Internet and the Internet Protocol (IP) that

enable both public and institutional networks have been with us for decades and the Web itself is hardly

a new phenomenon. What is different today is a far more sophisticated approach being taken by

individuals and institutions to content value informed by this long exposure to the Web and the absolute

ubiquity of IP as a worldwide communications medium. Having scrambled for the better part of a

decade to catch up with this phenomenon commercial aggregators and the publishers that they service

are at the edge of having to accept that the balance in their business models is about to shift over

permanently in favor of New Aggregation attributes as the way to highly profitable operations. Many

aggregators lack the financial depth to continue in their present form and will be challenged further as

more institutions and individuals demand that their suppliers fall in line with these new norms. It’s up to

these aggregators and publishers to embrace the New Aggregation rapidly – and it’s up to today’s major

institutions to push their aggregators and publishers to embrace it. The end result of these efforts will

be a world of commercial content that’s far more in line with how people have used content for

centuries. The center of publishing technology moved long ago into our own hands; it’s time for the

business methods and commercial models of commercial aggregators and publishers to follow that

movement at long last.



16. ABOUT THE AUTHOR

John Blossom President Shore Communications Inc. [email protected]

John Blossom is one of the most widely recognized content industry analysts, providing thought

leadership to executives in search of new approaches to rapidly changing markets for publishing and

technology products and services. Mr. Blossom founded Shore Communications Inc. in 1997, specializing

in research and advisory services and strategic marketing consulting for publishers and content service

providers in enterprise and media markets. Mr. Blossom’s engagements have included strategic

marketing consulting for major corporations and startups as well as speaking engagements at major

conferences and advisory services for senior industry executives. Mr. Blossom is the author of the book

"Content Nation: Surviving and Thriving as Social Media Changes Our Work, Our Lives and Our Future,"

published by John Wiley & Sons, Inc. in January 2009, and speaks frequently at industry and corporate

events on publishing in enterprise and media markets..

Mr. Blossom's career spans more than twenty years of marketing, research, product management and

development in advanced information and media venues, including the marketing and development of

financial information services at global financial publishers and financial services companies (Citicorp,

Quotron and for Reuters Holdings PLC), as well as earlier experience in broadcast media. Mr. Blossom

served as a Vice President and Lead Analyst at Outsell, Inc., where he provided research and analysis

coverage of content technologies and financial and corporate information markets for major corporate

clients, and developed successful online ecommerce services for research reports. For his excellence in

qualiitative research, Mr. Blossom was recognized with the Vendor of the Year award by Standard &

Poor's in 2001. Mr. Blossom's ContentBlogger weblog won the Software and Information Industry

Association 2007 CODiE award for Best Media Blog. Mr. Blossom is currently writing a book on social

media.

Mr. Blossom's extensive global experience with the marketing and management of financial information

services, including real‐time datafeeds, established him as one of the thought leaders in this important

market segment, leading to strategic assignments with the executive management team of Reuters

Group PLC. Mr. Blossom was also a key player in a number of ground‐breaking Internet‐oriented

initiatives at Reuters, including the introduction of content management services and a global effort to

integrate Internet‐based information suppliers into the mainstream Reuters information services

environment. Mr. Blossom has traveled to and is familiar with both European and Asian markets for

content as well as North American markets..



In 1999, Mr. Blossom joined Waters Information Services as Director of Market Research, where he

spearheaded the design, development and marketing of The Waters Survey, the first publicly published

survey to collect highly detailed information on financial information product usage from financially

oriented institutions in the United States.

Mr. Blossom has been interviewed frequently by the business press and has been quoted in many major

news and trade publications and media outlets, including:

The Wall Street Journal

Financial Times

Washington Post

Denver Post

USA Today

Marketplace radio

ABC Radio National

CEO Magazine

Information Today

EContent Magazine

Upgrade Magazine

BusinessNow television

Wall Street and Technology

Waters Magazine

Securities Industry News

Red Herring

Mr. Blossom speaks regularly at major industry conferences and events, including:

SIIA Information Industry Summit

SIIA NetGain

SIIA Financial Information Summit (Rome)

SLA Annual Conference

The National Press Club

The Commonwealth Club

ASIDIC

NFAIS

Buying and Selling eContent

Search Engine Strategies

Infovision (India)

InfoCommerce Annual Conference

OCLC Symposium

TransPromo Annual Conference

Uchida Spectrum User Symposium (Tokyo)



17. ABOUT SHORE

Shore Communications Inc. is a leading research and advisory service focusing on organizations that

create, market, purchase, deploy and use professionally‐oriented content and the technologies that

enable its value in individual and collaborative environments. Unlike many other research and advisory

services, Shore is unique in its focus on understanding not just content or technology or users but the

complex interplay between these forces that create value in enterprise and media content markets.

This positioning is important to our clients, who increasingly view their own operations in the same

unified manner.

Shore focuses on the research and advisory needs of the creators and consumers of content and related

technologies in the professional world. At the core of Shore's operations is a talented and experienced

team of analysts and specialists who are dedicated to an unbiased and objective approach to servicing

your needs. Shore’s team includes senior analysts with years of experience in providing marketing and

research services to major communications companies, including major quantitative and qualitative

research projects that have oftentimes set standards for coverage and quality. Shore’s clients include

major publishing companies, emerging content technology companies and other new and established

companies needing leading edge thinking to drive their product development and purchasing plans.

Shore is a stock‐issuing corporation incorporated in the State of Connecticut and in continuous

operation since 1999, with operations and team members throughout the United States. Our team

consists of numerous industry experts with years of experience in the publishing and communications

industry and who have worked as successful independent consultants providing research and advisory

services prior to joining Shore’s virtual team.

Shore works with its clients on a highly confidential basis. In general outline, our engagements have

included:

Major market opportunity evaluations for enterprise and media content and technology

companies, including competitive product evaluations, executive interviews, market surveys,

market research, narrative research, market sizings, marketing and product plan evaluations,

platform evaluations, go‐to‐market plans and strategic investments and acquisitions advice.

Services for major and emerging companies in financial information, legal, regulatory and

compliance information, scientific, technical and medical information, business information,

mobile markets, social media publishing, search, categorization and aggregation technologies.

Engagements and work experience with global enterprise publishers, including experience in

Asia and the EU.

For further information please contact us at:



Shore Communications Inc.

4 Merritt Lane

Westport, CT 06880‐1421

203.293.8511

http://www.shore.com/

[email protected]

Documents

The New Aggregation: Models for Success in Creating Content Value