The Content Value Chain
How content distribution mimics the trends of offline distribution
Have you ever thought about how you get content served to you? We dont use the term 'value chain' often in context of content but there's a clear distribution mechanism of content.
To understand how content gets served, let's first look at the traditional value chain - how physical goods get served. The goods value chain looks like this-
The manufacturer invests their time, capital and labour to produce goods.
These goods are then sold to a distributor. The distributor provides two key advantages:
Network - the social capital of retailers that distributor has built.
Credit - the social capital also helps distributor in giving goods on credit to retailers, to enable more consumption
These retailers purchase the goods, devote shelf space to them and sell it to the consumers.
How is content value chain any similar?
The content creator invests their time, labour and some capital in creating content. Then there are content curators, who themselves dont create any original content, but have made their reputation by curating good content. Finally, consumers consume this content.
There are many problems for the manufacturer when there are multiple players in the retail chain:
The manufacturer does not get to capture the full value of his product
The feedback from customer gets lost or distorted in the way
A middle player might choose to go upstream with all the data + distribution they have (e.g. Private labels of retailers) and hence become a competition
Hence, we see the entire wave of DTC brands.
On the content side, things are slightly more complex. Often, consumer feedback is not captured monetarily but in terms of engagement. Often, curators pass off other's content as their own creation.
The content curator's role has evolved quite a bit in the media landscape.
The erstwhile curator pre-internet were media veterans in newspapers and TV, who aggregate content from different reporters/content producers. They used to decide what to show and when.
With the rise of social media, curators often were people with a large following. However, as I wrote in this article, Internet produced more abundant content than individual people can curate and hence algorithms became important.
This marks a pivotal shift as now, algos take the role of curation. There are platform specific nuances as well on algo curates the content. E.g. Platforms predominantly based on follow graph like Facebook or Twitter have still a scope for people to become curators. Platforms based on interest graph like Tiktok leave no room for people to rise as 'curators'.
However, content creators face similar problems as a manufacturer:
Creator doesn't have a direct relationship with the consumer
The platform creating the algo can always produce content and prioritise it (E.g. Netflix originals)
Hence, we see the wave of Substack, that eliminate curator layer completely and transfer user ownership completely to the creator.
When we put content and commerce together, we realize how their abstractions are the same and how something as simple-looking like "Internet removes middlemen" has so far reaching consequences.