As Data Gets Cheaper …

By now, it is pretty clear that the major effect of digitizing our lives is to reduce the cost of sharing data. When you think about this, consider that there was a time not too long ago when a book cost more than a house. Sharing data was rather limited. But that was better than not having any books, right? Now the cost of distributing books is essentially zero. Nice, but that is not the end of the story. What about the cost of making the content for those books? That is not zero. Why not?

Think about it. The reason is that we produce the content in books the way we used to make everything — one at a time. As craftsman. One might need a year or more to write one. The industrial revolution changed the way we think about production, and now we make most of our stuff by assembling standard components into final products. So why not apply that idea to content development? Can we standardize the content components that go into books to reduce that cost?

We do that a bit already.  There are some formats that have been standardized. The encyclopedia — now evolved into wikipedia — is an example. Dictionaries are another. The series “XXXX for Dummies” is a more complex iteration. Each of these “books” is composed of a standardized collection of components that makes it cheaper to make and easy to use. So we are not working from a clean slate here. We do this now, albeit to a limited degree.

Can we go beyond these rather primitive tools? Of course we can. To get started, we need to think carefully about what content products people want to pay for. And by “people”, I don’t just mean consumers. Google et al showed us a long time ago that sellers pay for content too.

We are used to thinking in terms of categories of content products that we inherited, like “news” in newspapers and magazines, “fiction” in novels, “textbooks”, “directories”, and so on. Just go to any bookstore and you can see all the categories physically in front of you. These categories translated into various well developed markets for different types of product. But these categories are less useful now that we can access content in many categories without buying the product. Like news. And like fiction (now freely available on lots of free media).  So one issue that has lots of smart people scratching their heads is whether we defend these product categories or move on. There are arguments why some categories should be defended and I won’t get into them here. I will make the basic point that defending a given category is not likely to turn it into a growth market.

So what about moving on? Well, what content will people be happy to pay for? Michael Bloomberg and others figured out a long time ago that folks will pay a lot money for content if it is targeted to improve what they do. This simple idea made Bloomberg a billionaire. Why? The targeted audience (like financial analysts) has no choice but to buy the content product if their competition has it. So Bloomberg doesn’t sell just “news”, but news targeted to anticipating variations in company valuation that financial analysts can base buy and sell decisions on. The key take away for us — the value of content is linked to the value of its application or use  (what we do with it). So if you want to upgrade content production, it is useful to start by seeing more clearly what we use content for.

This idea takes us to the next question. What types of content improves what we all do? Hmmm … what is it that we all do? Well, we all use stuff to get through the day, like housing, clothing, food, transport, etc. Voila, we see how data content management is affecting some of these things already. For example, Uber may alter your decision on whether to own a car.  Airbnb creates an option whether you want to share your living space. One step down the road, the “internet of things” is likely to target data transfers that make it easier for us to manage all of the stuff that we use. If you are now thinking that the internet of things isn’t really about things at all, you are right. It is about reducing the cost of managing data about things. It is about standardizing data components to make it possible to share useful content more seamlessly.

But managing our stuff is not all we do in life. Unless you are a collector of fine stuff (like art or sports cars), managing stuff is not even the most important thing that we do. What is more important? Well,  we tend to call that thing “work” – how we make a living. We already have lots of content targeted to various areas of work (remember Bloomberg, et al?). But a lot of their high value content is generated the old fashioned way, one unit at a time.

Can we do better? Well, we can if we target high value uses, break down the content product needed to upgrade the results of work into components, and standardize production of the components. Ambitious? Yes. Doable? Yes.

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