Content Isn't King

Content Isn’t King

A certain myth is common on the Internet. It is the myth that Content is King.

There are several meanings attached to this phrase. Let’s review how it all got started.

Bill Gates

Bill Gates may have started this Content is King hysteria back in 1996 with a column published 1/3/96, by the title of Content is King, wherein Mr. Gates opined thus:

Content is where I expect much of the real money will be made on the Internet…

I expect societies will see intense competition-and ample failure as well as success in all categories of popular content-not just software and news, but also games, entertainment, sports programming, directories, classified advertising, and online communities devoted to major interests…

If people are to be expected to put up with turning on a computer to read a screen, they must be rewarded with deep and extremely up-to-date information that they can explore at will. They need to have audio, and possibly video…

For the Internet to thrive, content providers must be paid for their work. The long-term prospects are good, but I expect a lot of disappointment in the short term as content companies struggle to make money through advertising or subscriptions. It isn’t working yet, and it may not for some time…

In the long run, advertising is promising. An advantage of interactive advertising is that an initial message needs only to attract attention rather than convey much information. A user can click on the ad to get additional information-and an advertiser can measure whether people are doing so…

…technology will liberate publishers to charge small amounts of money, in the hope of attracting wide audiences.

In other words, Mr. Gates expected the bulk of the money to be made by content sites, not by five-page or ten-page eCommerce sites.

The revenue of which he spoke was supposedly to come from advertisers buying ad space on content sites, and from subscriptions.

He was, of course, wrong.

The year is now 2003, and anyone with an IQ over 40 has realized that consumers don’t click through. Banner advertising is dead. Studies show that consumers train themselves to block out banner advertising within seconds of arriving at a website.

As we saw the banner click-through ratio drop to 0.2%, content sites scrambled to subscriptions, where they met with even more disappointment. The Internet is, after all, the ideal medium for the free exchange of information. And, as RIAA found out, not just information.

Ecommerce, Not Content

Ecommerce sites – not content sites – are where the bulk of the money is being made.

The Real World

content site with 1,000,000 uniques and over four million page views per month displaying Google Adsense achieves a CTR of 2.5% with an average click at $0.20. Twenty-five thousand clicks though’s and the grand prize is a paltry $5,000.

By contrast, an eCommerce site with the same 1,000,000 uniques per month, selling hosting at $100 per year with a conversion ratio of 4% just grossed $ 4,000,000. Do the math. Content isn’t King. It never was King. It never will be King. Welcome to the real world.