Is Content King?
It seems obvious. For entrepreneurs trying to build new online content businesses, the great challenge is to create the best content. Content, after all, is king. So the business that builds the best content wins.
And, yet, like many so other seemingly obvious things about today’s online world, the belief that content is king is mistaken. Indeed, this assumption might not only be wrong, but may also be the reason why so many new content businesses fail.
No, it’s not content that is king on the internet. What matters, instead, are connections. Connections are, in fact, king. They are what distinguish successful online businesses from failures.
Rather than guaranteeing success, the lure of high quality content may, indeed, be a trap. According to the noted Harvard Business School professor Bharat Anand, the author of The Content Trap: The Strategist’s Guide to Digital Change, the most successful online businesses are those that enable connections.
This art of making connections, according of Anand, exists in three forms in the digital world. Businesses that enable user-to-user connections, such as Facebook or Twitter, are king. For Anand, then, the value of these online businesses – which are now collectively worth several trillion dollars – lie in their ability to empower their users to connect with each other.
Secondly, Anand argues, successful online businesses are able to leverage the value of connections associated with their product. So, in the music business, for example, he explains that the successful entrepreneur was able to recognize the connection between the appearance of free online music with the revitalization of the live music economy. Massive amounts of value have been created by the disruption of the digital economy, he says. So the challenge is recognize where that new value lies and to take advantage of it.
Therein, Anand says, lies the third reason why connections are king. “Context matters,” he says, in his explanation of what he calls “functional connections”. The real strategist recognizes this and acts accordingly. And so “doing things differently” is often what really distinguishes the successful entrepreneur. The only rule in the digital economy, Anand – who is the Henry R. Byers professor of strategy at Harvard Business School – might be suggesting, is that there are no rules.
It’s recognizing this “context”, Anand says, that represents the “next big thing” in online content. What entrepreneurs – of big and small companies alike – need to do, he says, is “piggyback” off previous success. And so, he suggests, companies have to be both “platform” and “content” businesses in today’s digital world. Therefore, even if content might be what he calls a “lottery”, he nonetheless believes that internet giants like Netflix, Apple and Amazon should be investing in the production of high priced online content.
By investing in Hollywood quality content, Anand believes, the internet giants are building value into their technology platforms. Context matters. And by becoming next generation Hollywood studios, he says, Netflix and Amazon are obeying the most important rule of the digital economy. Connections are king.
Watch my interview with Bharat Anand to hear more.