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November 26, 2014

Mochila Offers Promise of New Content Exchange

Important Details: Try this metaphor: Pony Express delivery. What does it evoke for you? Speedy transfer of goods? Ability to deliver no matter what obstacles stand in the way? A service that lasted barely 16 months?

Pony Express is the metaphor chosen by the newest kid on the content syndication block, Mochila. Mochila is the Spanish word for knapsack, the kind carried briefly - until being disintermediated by the transcontinental railroad – by those intrepid Pony Express riders. The company finally went public last week, after a long quiet period of signing up customers and fending off questions in the blogosphere about its single Web page promising “a new media marketplace.”

Mochila gave the New York Times an exclusive on its formal birth announcement. The Times responded with a nice piece, reporting that “Mochila will be a place where newspapers, magazines, Web sites and broadcasters sell content to each other.” That’s a Holy Grail of the emerging content monetization industry: a content exchange that can work seamlessly and with greater transparency than current deal-making affords. For many in the Internet news industry, it reminded them of the old Yogi Berra-ism: “déjà vu all over again.”  The memories that came up: iSyndicate and Screaming Media.

Mochila’s central notion is that the Web has matured beyond the time of those two ‘90s online syndication houses. Now, publishers post content they want to syndicate, on an article-by-article basis. Content buyers – other media needing content for their sites – buy what they want a la carte rather than on a long-term contract or subscription basis. Saying “we’re the iTunes of content,” and that the interface works “a lot like Amazon,” CEO Keith McAllister clearly intends to position Mochila as a content company that has learned from the best transactional sites on the Internet.

McAllister gave Outsell a demo at last week’s NEXPO show in Chicago. First reactions:

  • McAllister, an 18-year veteran of CNN, where he last directed national newsgathering as EVP, makes the point well that his company listened to publishers. Publishers with good experience in the content licensing trade will recognize a sell-side interface and admin set that addresses the basic business-rule needs of the trade. The tools enable publishers to set variable pricing, create date and geographic embargoes, include their URLs to promote traffic, offer seven levels of admin authority, and provide real-time tracking. That’s an impressive tool set.
  • While on launch Mochila only offers buyers and sellers the opportunity to transact by exchanging money, it plans on offering the ability to monetize through ad placement. This is an intriguing notion. We live in a world of paid search. Some believe that most content will be consumer-driven, with almost all monetization based on ads. In the coming Mochila model, publishers can say this: take my article and pay me nothing for it, but run this ad adjacent to it, and I’ll keep (or split) the ad revenue.
  • The issue for Mochila will be what any new marketplace must master: balancing supply and demand, scaling up to significant size quickly, and proving out a business that most publishers and content buyers will tell you they’re not convinced they need. Mochila launched with 10 publishers, including MediaNews newspaper content and Hachette Filipacchi magazines.

McAllister is the first to acknowledge the timing issue, and says he believes times are different now than when staff-bloated iSyndicate and Screaming Media tanked. He believes that his 15-person, New York City-based company is built to ramp with the market, and that publishers are getting smarter about the value of their content – seeing licensable value in it beyond advertising. McAllister believes content buyers will see great value in a la carte buying, relying less (and reducing expenditures) on wire service content (AP, KRT, Reuters, etc.), when much of it goes unused by their editors.

In Outsell’s Opinion: Maybe. But content buying and selling habits may put a hitch or two in Mochila’s giddyup. And all bets are off when the long-promised Google Premium finally launches (end of April; May?), further disrupting the content-selling ecosystem.

Outsell believes that Mochila is an important development in several ways:

  • It focuses new attention on getting publishers to think about and act on the value of their content distributed other places than their own Web sites, enticing them beyond the pure destination Web site model that has not been successful for most of them.
  • It provides a tool set that demystifies the licensing business, a business in which many publishers have invested too little attention. Critical in its tool set development, though, are models beyond pay-per-word. Pay-per-word is an old-syndicate model and will tend to price content well beyond its current worth on the Web, greatly inflating publishers’ idea of current value and, consequently, limiting commerce.
  • It potentially enables a new model for publishers of both retaining content control and expanding distribution opportunities for their own advertisers, by allowing advertising to flow fairly freely with publisher content - around the Web and presumably on mobile devices as that syndication industry blossoms.
  • It has the potential of helping publishers service deals already in place with major distributors like Google, Yahoo!, and MSN, potentially offering publishers greater tracking, greater transparency, and greater negotiating clout. At best, that’s early on Mochila’s drawing board, but it’s key to reacting to today’s content distribution issues.