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Community content is vital to publishers

It's easy to underestimate the value to a publisher of community-created content, even at a time when blogs, amateur video, and social-networking sites are soaring in popularity.

After all, lots of other kinds of content are popular, too. A typical piece of amateur content is unlikely to match the appeal to a broad audience of a typical piece of professionally created content. Non-professional work often doesn't measure up, though there are exceptions. So why is community-created content so special?

At least two factors make the potential value of community-created content much greater than might be intuitively obvious:

  • Network effects, which lead popular services to become more popular
  • The rise of "professional amateurs" (or "pro-ams"), who use great tools to create content

Many kinds of community-created content are subject to network effects. This is the name economists give to the idea that de facto standards sometimes emerge when a network of people are involved in an activity, and that these standards confer value to those who control them.

The canonical example is Microsoft Windows, which is a fine operating system that has become a de facto standard less for its specific features than because so many people use it. Lots of operating systems have features, but Windows also has by far the largest community of users and publishers. Software publishers almost always create a Windows version of their products and often only create Windows versions, because that's what people use. Computer users, in turn, pick Windows in part because the software publishers support it. Microsoft is in the fortunate position of owning the place where the community of users and publishers congregate--though the rise of the Internet is a paradigm shift that threatens Microsoft's ownership of the place of congregation.

Newspaper publishers have for decades been the beneficiaries of lucrative network effects in their classified advertising businesses. Classifieds are an example of community created content--in this case, the content being the ads themselves. Traditionally, almost anybody with something to buy or sell would use the classifieds of the dominant newspaper, because that's where the community of buyers and sellers congregated. Newspapers have been the fortunate beneficiaries of network effects--though the rise of the Internet is a paradigm shift that is profound.

Telephone companies have owned the place of congregation of business-related directories, with yellow pages advertising representing a very lucrative place in which a community of buyers and sellers congregates.

In recent years, E-bay, Amazon, MySpace, and a variety of other companies have made fortunes by creating Internet destinations where the worldwide community can share and consume its own content, whether that content is auction listings, customer reviews, or autobiographies and vanity sites. (E-bay and Amazon compete in auctions, and have similar technologies and lots of marketing muscle. But it's really no contest because buyers and sellers know that when it comes to auction items, the community congregates at E-bay. There's not much Amazon can do about that.)

At Alki Software, it has been our contention since 1996 that publishers should strive, above almost all else, to own places where important communities gather to share and consume their own content. Once a publisher owns a place of community congregation, it is almost impossible for another publisher to displace them. Indeed, it typically takes a paradigm shift in order for one publisher to displace another who has benefited from network effects.

The value of community created content is further enhanced today by the emergence of inexpensive professional tools and talented people who are eager to use them. Amateurs, armed with software packages that give them exactly the same tools as professionals, are turning out high-quality content for the fun of it.

It's not always easy to quantify, but there appear to be a lot more high-caliber writers today than there were two decades ago. This can be attributed plausibly to the availability of tools such as Microsoft Word, and to the ease with which content can now be published to a potential audience around the world. Everybody has professional tools and lots of people have an audience, and quality is on the rise.

Similarly, the software used by professionals in photo studios, music studios, and movie studios is now available for just a few hundred dollars a copy. Barriers to creativity have fallen. Hooray!

In the second half of the 1990's, Alki Software Corporation started building online communities and the tools that could help other publishers build online tools. Alki sold these lines of business in 1999.

Now we're back at it, not building tools for others, but using our insight and expertise to conceive of and build products that have the potential of mixing professional and community created content in compelling ways.

Copyright 2006, Alki Software Corporation. Alki is a registered trademark of Alki Software Corporation.