Web Content Market Analysis
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Should one apply the five forces model of M. Porter to the web content market
Should one apply the five forces model of M. Porter to the web content market, (web content providers are considered those sites that do not act as just an additional channel for a conventional business):
Providers are web hosting providers, software providers, web page designers, market makers (e.g. SEO), (in certain cases major search engines act also as providers of SEO services). Providers do not hold substantial power, given that the same services of comparable quality are offered by many.
Competition: heavy competition exists by many content providers. The heavy supply of information creates a very competitive environment, in which the ability to attract Internet users becomes increasingly difficult. Certain publishing or media organizations with well known brands and revenue sources from conventional publishing or media activity (e.g. magazines), achieve economies of scales by producing content and automatically distributing it to the different channels.
Web content providers have potentially thousands or millions of small (in revenue potential) Customers (the few big customers concept is not common).
Web content supply activity is primarily regulated by the Big 3 on-line search, which hold substantial power.
Regarding the threat of Complement products, the web content market is rather positioned as offering highly promising complement products to the conventional publishing and media market ones.
Barriers to entry: Capital expenditure is less of a barrier compared to other activities. The ability to produce rich & innovative content (brainpower), cannot be fully controlled by any major market players, therefore there is no such major barrier. However, the presence of many competing content portals, as well as the inherent difficulty to identify a subject of high interest and limited content supply, creates a ‘knowledge barrier’.
The web content market is one of the most globalised markets, given that the only barrier to global reach, is the language barrier. Should we assume that English is the global language, this barrier exists only to the extent that certain parts of the population do not understand English. The increased Internet penetration contributes to the increased globalisation of the market.
Opportunities exist, given that one can argue that free information content supply is still limited. Information on many subjects exists, but many sites offer only introductory content, while trying to promote products.
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