Jupiter Forum: Content providers are now niche players

Bricks-and-mortar content providers hoping to conquer the Internet with their unique offerings got a sobering surprise at Jupiter...

Bricks-and-mortar content providers hoping to conquer the Internet with their unique offerings got a sobering surprise at Jupiter Media Metrix Media Forum in New York yesterday, when they were told it would not happen.

That was the message from keynote speaker Peter Winter, president of Cox Interactive Media, who took pains to inform the crowd that they had already lost out to the Internet's axis of power: Yahoo!, Microsoft Network (MSN) and America Online (AOL).

"MSN, Yahoo! and AOL have already won and everyone else is running a niche," Winter said.

Winter's cut-to-the-quick remarks were based on his own experience forging Cox's successful online properties, which he has taken pains to keep independent from Cox Enterprises' numerous newspaper, television and cable properties, he said.

Winter added that keeping a company's online business separate from its bricks-and-mortar ventures is essential, because many companies simply duplicate their offline business on the Net, and fail to create a unique Internet business that draws an audience.

Online ventures often have to feed their parent brand, he continued, which inhibits them from building their own business. Left marooned in a narrow market and competing against much larger players, many brick-and-mortar companies' online projects are doomed.

"Only hubris sustains a business plan like that," he said.

Winter warned against other common strategies employed by companies trying to balance offline and online businesses, such as touting Internet properties as value-added products. What tends to happen is that the offline property usually subtracts from the Net business, because the offline brand dominates the Net venture, he said.

Winter's remarks may have come too late for the content providers attending Jupiter's ninth annual media forum, as many of them have already discovered the perils of taking an offline business online.

His keynote did provide some clarity, however, in a conference marked by an "it depends" tone. The questions of how and when sites should charge for content and how they should exploit broadband were energetically debated. But the answer was the same - it depends on your business.

Nevertheless, Winter's comments that many companies approach the Net with hubris and naïveté were hard to swallow, especially for attendees bruised and battered in last year's Darwinian market.

"[Surviving] requires a dispassionate, cold-blooded, ruthless analysis of your business," Winter said.

Jupiter's Media Forum ends today.

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