Content providers are generally perceived to be Web sites that supply different types of online information—including news, entertainment, traffic reports, and job listings—that is regularly updated. The first content providers were entities such as America Online (AOL), which provided content to users for a subscription fee. More recently, however, many providers offer some or all of their information services free of charge. Unlike e-commerce sites, whose user traffic ideally generates sales, content providers tend to derive revenue from sources such as banner ads and other forms of advertising and syndication. Some content providers purchase and aggregate industry-specific information from sources such as Lexis-Nexis. Many news content providers, such as Dow Jones, Hoover's, and Lexis-Nexis, also furnish archival content for users.
Among the most important controversies to surface in conjunction with the online distribution of copyrighted content (particularly e-books, music, and streaming media) is "digital rights management" (DRM), which pits the "fair use" of content (for example, for educational purposes) against the financial rights of the content's creators and purveyors. The federal Digital Millennium Copyright Act (DMCA) of 1998, which critics argue goes too far in protecting content providers, prohibits the "manufacturing, importing or offering to the public, providing or otherwise trafficking" in unlawful circumvention devices. Special software to prevent unauthorized duplication encrypts the content so that users can view or listen to it free of charge, but only duplicate or download it for a fee. Other means to record content usage also were under development in the early 2000s.
The most common business model for online content providers, the click-through model, faces an uncertain future. While the bulk of content providers derived a substantial proportion of their revenues from banner advertisements, the utility of those ads was increasingly questioned in the early 2000s, as click-through rates plummeted and firms realized the ads were too often ignored. Future growth areas for content providers include mobile phone operations, where providers can supply users with relevant information connected to location-based services such as malls, restaurants, and entertainment venues. Many content providers expect that customers will readily adjust to paying per-usage fees for such content, since they already do so for cellular phone service. Other content providers, such as those that show movies on their own Web sites, are looking beyond the Internet to furnish content to offline media venues such as cable TV networks.
Agnew, Marion. "Syndicators Spin Out More News for Web Sites: Online Content Providers Offer Information from a Variety of Sources." InformationWeek. February 26, 2001.
Albiniak, Paige. "Do Not Pass Go." Broadcasting & Cable. November 6, 2000.
Cholewka, Kathleen. "Opting into the Wireless Web." Sales and Marketing Management. January, 2001.
"Content Provider." NetLingo: The Internet Language Dictionary, 2000. Available from www.netlingo.com.
Freeman, Laurie. "Web Syndication Catching On." Advertisement Age. January 22, 2001.
SEE ALSO: Affiliate Model; Aggregators