CONTENT FOCUS WILL REALIGN THE SERVICE PROVIDERS MARKET – AUGUST 1998
Content constitutes the strategic core of the residential Internet market.
Over the next few years the emphasis will rapidly move away from telecommunications services as in basic voice services to value that is added to the traditional telecommunication services, including data. This makes customer services and marketing far more important than it has been in the past. Control over the end-user will be both a source of revenue and a strategic necessity.
The industry structure will change from a vertically integrated one to a horizontal one. A redefinition of the newly developed ‘Internet chain’ – access, selection, classification, marketing – will be needed. This will see a destabilisation of ‘traditional’ players such as the access or online service providers, navigators or search engines.
A large number of new players will enter the content market: telecommunications operators, traditional content publishers and companies with well-known brand names.
According to market researchers IDATA, the residential Internet market strategies of content services can be segmented along the following lines:
· The advertising model: diversity of advertising models, advertising market trends, maximising the audience, the platform model, segmentation strategy.
· The subscription model: payment for the content packaging service, access to specific services.
· Subscription and advertising: evolution scenarios, diversity of financing methods, importance of access providers in content services, the example of Yahoo! Online.
· Editorial promotion: birth of an economic model combining content and promotion, new competition for content publishers, towards direct marketing.
· Other financing methods: payment by connection time, pay-per-use, multiplication of revenue sources.
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