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So what does our second-annual paidContent 50 list of the most-successful companies in digital content say about the state of the business in 2012? Here are six things that struck us:
1. You’ve come a long way, baby
The paidContent 50 collectively are generating $150-billion-a-year in digital revenue. That number is impressive, and shows how far our industry has come in less than 20 years — digital media has never been more relevant or influential.
But it makes up just 16.5 percent of the total revenue of those 50 companies. One reason: Many media companies still have a way to go before becoming truly “digital.” Another: for many companies on the list, content is just a small part of their business.
2. China has become a force in media, too
This year, we included non-U.S. companies in our paidContent 50 list, and Chinese firms were a big beneficary. Asia’s experiencing a smartphone and internet boom (shipments are growing 16 times faster than in the U.S.), and that has created a digital content market with awesome scale, supporting “hyper-growth” in mobile apps. Now that growing chunks of its 1.3 billion people are getting wired, China’s portals, telcos and online games are becoming major players on the global stage.
3. ‘Digital’ becomes more visible as it becomes more meaningful
Our perennial reporting challenge with this list is that many companies refuse to identify “digital revenue” except when it suits them. For instance, CBS happily discloses 17 percent of Simon & Schuster revenue is digital, though doesn’t do the same for other CBS units. But some companies are changing their ways as their digital content sales become more respectable. When it was $20 million, digital revenue for the cable channel Discovery used to be tucked inside “Other.” It has since grown to $109 million, and can be found under “Distribution.”
4. Paid and free pay equally
Skeptics may argue the internet is a land of the free, where publishers will struggle to charge for content. But the content companies on our PC50 list are split almost equally between chargers and non chargers. Also: They may not be sexy but business-information publishers that sell content are making a pretty penny in the migration from B2B print publishing to digital data provision. We estimate Bloomberg, Thomson Reuters, Wolters Kluwer, Dun & Bradstreet, Reed Elsevier and Informa collectively make around $23.5 billion from selling digital content.
5. Ads add up for big companies
Advertising-related content features prominently on our list, just as on the internet. But our list of 50 are mostly not ad-funded publishers. Instead, it is advertising sellers themselves who dominate. It may be telling that advertising sellers are forging ahead of the publishers they serve: Does this inequity point to a problem with the economics of web advertising? Four of the world’s largest ad agencies, which have been buying heavily into digital, are high-rollers in our 50, while smaller companies in the online ad chain are harder to find, with YP Holdings, Yell Group and SuperMedia clinging to the rear.
6. Where are all the startups?
“You know what’s cool? A billion dollars.” The hottest young startups are all but absent from our list. Spotify doesn’t yet make the grade, Twitter is still M.I.A., Flipboard isn’t yet threatening an entrance. But Zynga, Groupon and Facebook have graduated startup school and are playing with the big boys, overtaking old-line media behemoths like Gannett, Disney and Viacom. Welcome to the club! Don’t be surprised to see more upstarts here in future.
Check out our complete paidContent 50 list.