|
EXECUTIVE SUMMARY
Introduction
Every day, competitive
intelligence and information
professionals rely on a wide
range of digital content
publishers and technology
providers to monitor and
extract information in their
respective industry sector.
For most of these
professionals, however, the
electronic news publishing
industry remains a difficult
and often confusing
environment. Which vendors
provide the greatest value,
and by what standard?
Over the past 10 years, as a
leading integrator of
competitive intelligence
software, Cipher Systems has
developed an extensive
knowledge of the leading
segments of the digital
content market place,
including:
-
Electronic Publishers
and News Aggregators,
such as Reed Elsevier
(LexisNexis), Factiva,
Reuters, and Thomson
Publishing (Thomson
Dialog, Thomson West,
Thomson Scientific,
etc.)
-
Multi-Client Study
Providers, such as
Freedonia or IDC Multi
Clients.
-
Search Engines and
Extraction Technology
Companies, such as Clear
Forest, Convera,
Insight, Inteliseek,
etc.
Report Objectives
Cipher has decided to
leverage its knowledge
and experience of the
electronic publishing
market place by
compiling a
comprehensive market
assessment and user
survey of the leading
Fee-Based News
Aggregators. Our initial
report includes a peer
survey of end users of
fee-based news
aggregator services, as
well as detailed
profiles of each of the
leading news
aggregators.
In the end, the main
objective of this report
is to help business
research professionals
answer the following
questions:
1. Who are the leading
electronic news
aggregators and what are
their respective
corporate affiliations?
2. What specific content
is offered by each of
the leading news
aggregators and what
degree of content
overlap currently exists
among the leading
providers’ Portfolio?
3. What do other
subscribers currently
think of the performance
of their respective news
providers?
4.
What is their level of
satisfaction?
5. What are the most
common sources of
complaints identified by
current users, and how
can other users benefit
from their feedback?
Methodology
In selecting the
companies profiled in
this Report, Cipher
applied the following
definition to the
denomination of
“Fee-Based News
Aggregators”:
“Companies that offer
for a fee, general news
content that is
business-related and
electronically-delivered.”
Each firm had to meet
the following criteria
in order to be featured
in our study:
-
Provide general news
aggregation services for
a subscription fee
-
Provide services that
are typically utilized
by businesses, not
individual consumers
-
Be an established player
in the field
Introduction to the
Fee-Based News Aggregator
Industry
The Cost of Information
Every manager at every level
in every industry is
responsible for making good
business decisions. But in
order to make those
decisions, managers must
have reliable and readily
available information. A
2000-2001 study conducted by
Outsell, Inc., the leading
research and advisory firm
providing actionable market
analytics for the
information industry, found
that American companies were
spending $107 billion a year
paying their employees to
search for external
information. The Outsell
study, which was
commissioned by Factiva,
Dialog, and KPMG, found that
knowledge workers were
spending about four hours
per week looking for and
gathering information; and
an additional four hours per
week reviewing and applying
external information. The
average salary for these
workers equated to $30 per
hour. Searching for and
reviewing external
information at $240 per
person per week was a
significant investment of
employee time and corporate
resources. Undoubtedly,
those costs are much higher
today.
The real cost of information
to companies is a key reason
that fee-based services
(also known as “value-added”
services) offered by news
and database aggregators
such as Dialog, Factiva and
LexisNexis continue be
highly important in the
overall information
industry, even though they
are facing new challenges
every day on the Web from a
multitude of information
products and search tools.
Advantages of Fee-Based
Services
Traditional
fee-based business
information services such as
Dialog, Factiva and
LexisNexis offer
high-quality information
from a wide variety of
sources including newswires,
newspapers from around the
world, trade magazines,
news-letters, investment
house reports, scientific
and medical journals,
patents—and much, much more.
All of the information
needed for a particular
project may very well be
available from one or two of
these services that
encompass huge collections
of databases. And, the full
text is often available for
immediate download. These
value-added services also
have extensive archives of
periodicals and historical
financial data. A key
drawback of general Web
searching is that archives
are limited, often not
extending beyond the
mid-1990s.
These fee-based services
offer powerful tools, which
enable researchers to search
hundreds of sources covering
current and archival
information simultaneously.
Search results can be
downloaded, printed or
e-mailed; and electronic
clipping features keep
business researchers
informed about topics they
select.
Disadvantages of Fee-Based
Services
In spite of these
advantages in using
fee-based information
services, the environment
for the traditional
aggregators has been
somewhat difficult. Content
creators and publishers want
as much revenue as possible,
and many people believe that
all the answers can be had
for free on the Web simply
by using Google and other
search engines to find
needed information.
Shore Communications, a
consulting and research
services firm specializing
in enterprise and media
publishing, reports that
traditional business models
for commercial electronic
content aggregation are now
challenged by individual and
institutional information
searchers equipped with an
array of powerful
electronic-content
technologies, who see
commercial content as only
one component of a wide
array of valuable resources
at their disposal.
Corporate, academic and
public institutions are
buying content from some
traditional aggregators with
increasing reluctance.
Besides they fact that they
have more choices, these
customers see some
aggregators’ business models
and operating methods as
largely out of touch with
their (i.e., the customers’)
needs for sophisticated
content integration and far
more efficient management of
commercial terms and
payments.
Modern networking, search
engines and more
decentralized content
publication and sharing
techniques have rendered
many of these
database-driven content
aggregator “factories”
obsolete by reducing or
eliminating the benefits a
vendor-provided central
database. Often, a client
can collect content more
effectively by using a
personal computer to obtain
the information directly
from the publisher, via
Web-based technologies.
Some aggregators have
responded to technology
threats by developing their
own increasingly
sophisticated interfaces and
tools to integrate content
from their databases into
institutional workflows more
effectively. Other
aggregators, however, have
been slower to adapt.
New fee-based information
services in the news and
database aggregator category
are available today,
including some such as Ovid
and ProQuest that evolved in
part from earlier services.
Others have been launched
more recently, including
HighBeam and Alacra. The
newer aggregators operate
under business models quite
different from the
traditional services,
largely due to the influence
of the World Wide Web; the
traditional aggregators were
in place before the Web.
Brief History and
Description of Key Fee-Based
News and Database
Aggregators
The online news and magazine
aggregator business has been
around for over 35 years.
Dialog was started in 1972
and Lexis in 1973 (Nexis was
launched in 1980). Besides
Dialog and Lexis,
aggregators such as OCLC,
SDC ORBIT, MEDLINE, The New
York Times Information Bank,
and Dow Jones News/Retrieval
all were offering fee-based
services during the early
1970s. These early
aggregators targeted
different content areas and
markets, although some
overlap and competition
existed. The earliest major
aggregators, Dialog and SDC
ORBIT, began with
collections of scientific
and government databases,
and later added business
content. These two offered
the first major groupings of
databases as a fee-based
service, and naturally,
there was competition
between the two.
Estimated
Market Value
It is difficult to estimate
the market size for the more
traditional aggregator
services. One report
published in 2004 stated
that services like Factiva
and Dialog NewsEdge made up
a half-billion-dollar
market. However, it is not
clear if that report
referred just to the news
services, or also included
Dialog’s revenues from its
extensive database
collection.
The research and advisory
firm Outsell has reported
that the overall information
industry had aggregate
revenues of $358 billion in
2005, and grew at a 6.3
percent rate over 2004.
Revenue growth for specific
segments of this industry
were as noted below:
Search,
Aggregation & Syndication
Services (SAS): led the
industry with 14 percent
growth, to $36.3 billion in
revenue.
Market Research,
Reports & Services (MRRS):
grew 12 percent, to $25.7
billion in revenue.
Scientific, Technical &
Medical Information (STM):
grew 7 percent, to $19.2
billion in revenue.
Credit &
Financial Information (C&F):
grew 9 percent, with $32.6
billion in revenue in 2005.
Unfortunately, these figures
do not provide a clear
picture of the market value
for the more traditional
fee-based news and database
aggregation services in our
survey. Broad-based
information distributors
Time-Warner and Thomson
Corporation, and search
engine giants Google, Yahoo!
and Microsoft led the SAS
segment. Aggregators are
hidden in the “Rest of SAS”
segment. The STM segment
includes Thomson Scientific
(and thus Dialog, one of the
traditional aggregators).
LexisNexis owner Elsevier is
also part of this segment,
along with Wolters Kluwer
Health, and Springer Science
+ Business Media. The C&F
segment includes Reuters
Group PLC, Thomson
Financial, Bloomberg L.P.,
Moody's Corporation,
Standard & Poor's, and Rest
of Credit & Financial. News
Providers and Publishers are
in yet another segment with
a combined 2005 revenue of
$134 billion. Thus, it
becomes obvious in examining
these segments that
aggregator services do not
fall neatly under any one
segment.
News Aggregator
Trends
Digitization & the Internet
Digitization has had a huge
impact on how users receive
information and how content
is created. Digitization has
changed how we use news.
We’ve moved from paper to
electronic text (a la in
Dialog and LexisNexis).
Thanks to digitization, we
can now read content
electronically over the Web
and view electronic images
that were not available 15
years ago. Digital content
can be more easily stored,
searched, and retrieved by
an individual; and
digitization allows for
precise information
retrieval and storage of
search results. Digitization
has also enabled content
creators to track and
license their content and
has created new business
models for valuing that
content.
Digitization has changed how
information is distributed.
How many of us remember
ProQuest terminals in our
libraries with content
delivered via CD-ROM? At
that time ProQuest was
unique because it provided
images with the text, which
up to that time was lacking
from news aggregators such
as Nexis and Dialog, and
which was so important for
scientific and technical
literature. Today ProQuest
delivers its content via the
Web, expanding its reach and
user base.
Over the past 15 years,
digitization has changed how
we receive the news. Pew
reports,
“A decade ago, just
one-in-fifty Americans got
the news with some
regularity from what was
then a brand new source –
the internet. Today, nearly
one-in-three regularly get
news online.”
In fact, Pew found that
those that got their news
from the Internet grew from
2% in 1995 to 31% in 2006.
In addition Pew found that
“web news consumers
emphasize speed and
convenience over detail. Of
the 23% who got news on the
internet, only a minority
visited newspaper websites.”
Most Internet news gatherers
say that what distinguishes
web news is its format and
accessibility – the ease of
navigation, speed with which
information can be gathered,
and “at my fingertips”
convenience.
Changing Business Models
The
business models of News
Aggregators and Syndicators
have changed tremendously
over the last 15 years. They
have grown by acquisition.
For example, consider
Dialog: originally owned by
Lockheed, then purchased by
Knight-Ridder, and now owned
by Thomson. The trend
continues, as news giants
Reuters and Thomson are
expected to finalize their
merger in April 2008. News
aggregator products have
moved from online fee-based
databases to the
distribution over the
Internet. News creators are
finding alternative channels
to distribute and syndicate
news. They are partnering
with a whole host of
aggregators, with new news
aggregators popping up
everywhere. The original
fee-based news aggregators,
LexisNexis, Dialog and later
Factiva, are still there,
but they are finding their
own niche, according to
Outsell, a research and
advisory firm for the
information industry:
“ ‘Traditional’ aggregators
have focused on
high-value-added solutions
and on reinforcing their
long-standing positions in
the market. Factiva has
rolled out a series of tools
and enhancements in the past
year, both independently and
in partnership with search
engine companies like
Google, Yahoo, and MSN.
LexisNexis has continued to
expand the depth and breadth
of its content offerings
and, like Factiva, has
strongly emphasized unique
analysis tools.”
Shift from Product to
Service
News Aggregators and
Syndicators are seeing the
phenomenon of news shifting
from a product to a service.
There is a growing consumer
desire for “Just-in-Time”
news…whether it’s via an RSS
feed or a user created news
alert sends news to the user
via email or via Short
Message Service (SMS) on
another Internet-capable
device. News consumption is
becoming continual…and
finding better ways to
provide a “News Service” to
end-users is critical to the
future of News Aggregation
and Delivery.
Delivering News as a Service
(NaaS) means a difference in
how content is provided to
end users. The editor of one
of the country’s largest
newspaper sites said that
fully two-thirds of the
traffic to his paper’s site
now comes not through the
home page but, in effect,
through the side door;
through aggregators, blog
links, and other means.
News Aggregators bring with
them the service of
providing news from many
sources to their end users.
This allows news-hungry
users to be able to read the
news from a variety of
content providers. Not only
do
the users get the advantage
of a “one-stop news shop,”
but they also get the added
value of being able to read
the same story from multiple
sources, with multiple
points of view.
A new trend may be on the
horizon that could adversely
affect News Aggregators;
some of the major news
content providers are
beginning to offer their
content for free. The New
York Times began offering
previously fee-based content
for free over the web in
late 2007. That drew in
“indirect readers, who were
unable to gain access to
articles behind the pay wall
and less likely to pay
subscription fees. These new
viewers were seen as
opportunities for more page
views and increased
advertising revenue.” In a
similar move, global media
giant Rupert Murdoch, owner
of News Corp., considered
eliminating the paid content
requirement for the Wall
Street Journal Online. The
paper was thought to be
losing more in potential
advertising revenue from
higher traffic than it was
gaining from subscriptions.
However, Murdoch said in
January 2008 that the paper
would continue to charge
readers for access to much
of its Web site content.
Personalization
The trend
toward News Personalization
comes in several flavors.
There’s the shift to
end-user searching, which
opens up the news to the
actual user. News is now
directly available to people
who don’t know (or need to
know) Boolean-based search
terms. News can now be
purchased by the end user
and not the librarian.
Access control to the news
change dramatically. News
services have started to
hone in on these end-users,
offering pay-as-you-go
pricing and Web interfaces
that make these products
attractive to users who are
not information
professionals.
Another trend in
personalization is the rise
of end-user content
creation, such as the online
journals known as blogs (Web
logs) . With the arrival of
blogs and wide-spread
Internet service, we have
entered the era of the
“Citizen Journalist.” With
its low barriers to entry,
the Internet has made it
cheap and easy to launch a
website and begin blogging.
Mainstream news providers
have shown signs of
accepting this
personally-created content.
An example of this comes
from a 2006 Washington Post
special report:
“On the day the Indian Ocean
tsunami struck, Reuters had
2,300 journalists and 1,000
stringers positioned around
the world. But none of them
were on the beaches to
witness the disaster, he
told the Online Publishing
Association. The amateurs
were there and they were
prepared. So for the first
24 hours the best and the
only photos and video came
from tourists armed with 1.3
megapixel portable
telephones, digital cameras
and camcorders. And if you
didn't have those pictures
you weren't on the story."
Some News Aggregators have
added blog content to their
content. However there are
still issues about the
veracity of the content
found in blogs and Pew
reports that, “just 4% of
Americans say they regularly
read online blogs where
people discuss news events,
but that figure increases to
9% of those ages 18-24.”
Convergence
Convergence (or
the delivery of the same
thing, i.e., voice or data,
over a variety of devices)
is the next opportunity
enabling news to become a
service. While the numbers
are still small, there is a
growing market for news
delivered via the Internet
to a phone, personal digital
assistant (PDA) or pager.
Pew reports in its 2006
survey that, “While the
growth of internet news has
stalled among the very
young, a significant number
of young people (13%) say
they get news via a cell
phone, a personal digital
assistant such as a
PalmPilot or Blackberry, or
an iPod or similar portable
music player.”
Another report in July 2007
by Avenue A|Razorfish, a Web
design firm, “suggests usage
of the Internet through cell
phones is higher, with 36%
using them to check weather,
news or sports headlines.”
Leading search engine
companies such as Yahoo have
established a mobile news
service, and major
newspapers are following
suit. The New York Times
announced in January 2008,
the launch of a text
messaging service that will
deliver the latest news,
feature articles, and
columns from the newspaper;
as well as features from The
Times Magazine to cell
phones and mobile devices.
All this content is provided
at no cost.
Whether News Aggregators
will take advantage of
mobile news delivery remains
to be seen. It would be yet
another way to provide News
as a Service and expand news
aggregation beyond the
computer.
Survey Highlights
Who Were Respondents?
Cipher
polled over 100 end users of
fee-based news services over
a two-month period,
representing many industries
and job positions. There
were multiple respondents
from the pharmaceutical,
telecommunications,
insurance, healthcare,
manufacturing, financial and
competitive intelligence
industries. Respondents
ranged from corporate
librarians to CI analysts to
directors of competitive,
strategic and business
intelligence.
Survey Methodology
Over its
last 10 years of operation
as competitive intelligence
software integrator, Cipher
has developed an extensive
knowledge of the digital
content market place,
including the key players in
the news aggregation
marketplace. Cipher utilized
a 15-question online
questionnaire, constructed
by our own analysts based on
our experience. Questions
were focused around
satisfaction levels with
current providers, as well
as seeking to identify the
current issues facing the
industry. Respondents were
gathered from interested
parties off the Society of
Competitive Intelligence
Professionals and Special
Libraries Association
websites, as well as from
Cipher’s own internal
database of contacts.
News Aggregator Benchmarking
Survey Summary
Please note:
where shown, percentages are
of those who responded to a
question.
Most used provider: Factiva
Listed as “most important to
everyday job”: The terms
“Others” ranked higher than
Factiva and the other
players. These included
specialist medical journals,
internal newsletter
distributions and other
smaller specialist news
vendors. It appears that
other data sources are more
important to end users than
general news. This fact is
also reinforced later in the
survey, where most
respondents cite the need
for additional sources of
information, and decry the
lack of a one-stop shop (see
Common Complaints, located
at page 10)
Most people
noted that their company has
used their provider for over
5 years (32.3%). Clearly,
once a provider is accepted,
they tend to keep their
customers. This is explained
by the responses to question
“How often do you or your
company switch or
re-evaluate providers”.
Most
companies change or
re-evaluate providers only
when a new need is
identified. Therefore, most
providers’ business appears
quite stable, even in light
of any dissatisfaction.
On
the whole, most people are
satisfied with their
provider. 75.0% of
respondents feel good about
their provider, saying that
it either “Completely Meets
My Needs” or “Meets the
Majority of My Needs”, when
asked what value the
provider gives to their
specific job role. However,
we can also see that 19.6%
rated themselves as
“Completely Dissatisfied” or
“Somewhat Dissatisfied”.
This not an insignificant
number, and is borne out by
the number of verbal
complaints reported
elsewhere in the survey.
Respondents were asked to
indicate their affinity with
some statements concerning
news aggregators. The
following are the top 5
responses:
1. My provider has
content from reliable
sources.
2. I wish information
services were less
expensive.
3. My provider has
search capability and other
features that I like.
4. My
provider updates their
content in a timely manner.
5. I feel there are gaps in the
information available for my
industry.
Of those that have
changed their provider
within the last 2 years
(39), the reasons were
mixed. The biggest reasons
were “I felt another service
better fit our needs” and
“Unhappy with customer
service”. Cost issues,
denoted by “Too
expensive/Increased Cost”
and “Budget Change”,
accounted for 20.5% of
switches. The most
compelling reason for most
changes was “I felt another
service better fit our
needs” (27.7% of responses),
followed closely by cost
issues (20.0%).
60% of respondents indicated
their company had a
user-specific contract
relationship with their most
important provider. Nearly
half (45.5%) of those
respondents said that the
subscription was for 5 users
or less. News is still
considered the right of the
few. Most companies pay less
than $1,000 a month for
their subscription (47.1%).
A notable few, however
(5.9%), pay over $15,000 per
month.
Common Complaints
Although the majority of
respondents indicate
satisfaction with their
providers, the following
documents representative
complaints about the
offerings:
I think Factiva
has done the job pretty
well, but I need to
supplement this with other
types of searches and make
it more timely.
Good for the
advanced searcher, probably
not as good for the
end-user.
The searching
technology has not lived up
to my expectations in terms
of removing duplicate and
irrelevant stories.
I wish
it was a one stop shop (i.e.
no need for additional
providers).
I would like
stronger tools for finding
exactly the content of
interest.
We only use one
provider that I am aware of
and I'd like more
understanding of the others
available--how do they
differentiate service?
Good
information feeds but not
comprehensive enough.
Content is not narrow enough
- noise to signal ratio is
high.
Great for basic
searching, but leaves
something to be desired when
I'm looking for more
in-depth data.
There is no
source that is
comprehensive.
I would like
more publications included,
and better quality control.
The above seems to indicate
two overarching issues
within this industry: The
need for better search
capability to focus on
in-depth or more relevant
information The need for a
one-stop shop. Most
organizations must use
multiple providers to get
the breadth or depth of
information they require. On
average, respondents
indicated using at least 2
providers.
Like Most About Your
Provider
Generally, the scope
provided is universally
appreciated:
I like the
worldwide coverage and
extensive list of sources
and access to many
languages.
Broad scope of
content.
Satisfied, because
it gives me all information
that I want.
Our company is
unusual, it comprises two
disparate verticals and this
provider covers them both
thoroughly. It also allows
very specific searching for
the advanced searcher.
It
offers the most flexible
delivery options, with the
ability to add unlimited
content sources.
Dislike About Your Provider
There is a broader array of
items that cause
dissatisfaction, including
timeliness of data, cost and
targeting ability:
I don't
find it (the news)
particularly timely.
I'm…not
thrilled with the cost. For
me to roll this out
enterprise-wide would be
enormous.
…there are still a
lot of duplicates and
irrelevant stories caught by
the search strategy.
I find
that they are overall too
expensive.
Useful but still
a lot of material to wade
through each day/week.
Content is not narrow enough
- noise to signal ratio is
high.
Not targeted enough to
our specific businesses,
which then requires that we
purchase more content to
handle our current awareness
needs.
…timeliness is
lacking...typically receive
morning recaps of following
day.
The company have little
automation skills, e.g.,
little efficacy in search
robots. Their search
function is too basic. I get
too many irrelevant hits.
I
still get a considerable
amount of “out of the
targeted range” information.
…the time it takes to get
search results is way too
long.
Our global contact is
responsive, but our US
contact has changed several
times and we've had poor
response from all.
Communications in general
are poor…
Overall Results
In general, end-users like
their news aggregator, and
most do not consider
changing often, even in the
face of dissatisfaction.
However, there are some
common issues users have
with the news provided that
could be better addressed by
the news providers:
1. Broadness of content –
Although this was cited as a
major strength, it was also
a downside for many. End
users would like increased
functionality to enable them
to more accurately pinpoint
news of interest to them and
their industry, both in
automatic filtering and ad
hoc search.
2. Service issues –
Everything from timeliness
of data receipt to customer
service was mentioned. In
spite of this, most firms do
not seek to change vendors
very often. Changing needs,
not service issues, was the
reason given for a switch by
most respondents.
3. Information Gaps – Many
respondents felt that there
was not enough information
specific to their industry
available through the news
aggregators, and that
multiple sources of
information where therefore
required. This has served to
drive internal budgets
higher in an effort to
procure the right mix of
information, and increase
user frustration.
4. Cost –
Cost was mentioned
throughout the survey, both
in decreasing budget
problems and increasing
service prices. Most people
seemed willing to pay
however, with one respondent
summing it up: “Information
is NOT free...and you get
what you pay for. It appears
the costs are high...but
factored over the value of
that information to your
company...it actually may
not be as expensive as you
think it is. If it helps you
win a multi-million dollar
contact...is it really THAT
expensive?”
For complete survey results,
please see the Appendix
section in the
full
benchmarking report.
| 
