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Bill Gates’ “Content is King,” 20 years later



We’re coming up on the 20th anniversary of Bill Gates’ now-famous manifesto, “Content is King,” in which he made a number of predictions concerning the future of the Internet. Keep in mind that, in January of 1996, the Internet, or World Wide Web, was still an object of curiosity to most people, including even those who designed and operated it. Everybody knew how revolutionary the Internet was, but nobody was quite sure how to use it. Yes, the military already was utilizing it for communications, simulations and so on, but the average American was very much puzzled concerning what it meant for her.

I was one of them. I remember getting my first assignment to write about it. It was from Lewis Perdue, at the old Wine Business Monthly magazine, who told me to check the Internet out, and particularly to find out what I could about wine “chat rooms.”

I had no idea what he was talking about. I didn’t know how to get on the Internet (or if “getting on” was even the proper terminology). It turned out I had to go to the Berkeley library, rent time and use a hideously slow dial-up modem. It took forever to get online, and once I finally did, I hardly knew what to look for. But eventually, I found a few wine chat rooms and dutifully wrote up my article.

Back then, there was little talk of email, and none at all of social media. Winery websites were rare as unicorns (if in fact any even existed), and shopping via the Internet was a mere gleam in Jeff Bezos’s eye. Therefore, when Bill Gates wrote his little article, it caught people like a storm. He already was the most famous person in the world of computers and software (along with Steve Jobs), had been on the cover of TIME magazine in 1984 (when he looked like the nerd, Richard Hendricks, on TV’s “Silicon Valley”), and was understood to be a great prognosticator.

The title of Gates’ paper suggested his point. “Content,” he explained, would be the “long-term winner” in the race to make “real money…on the Internet.” And being a businessman, of course, Gates’ goal was for Microsoft to make real money.

Here are the predictions he made, which I have gleaned from the article. Following each prediction, I offer commentary as to how accurate the prediction was in terms of what has subsequently ensued, and to what degree the prediction has come true.

“Supplying information and entertainment” will be the “exciting things” that will fuel people to turn to the Internet.


HAS IT COME TRUE? Big “yes.”

The universal ease of “anyone with a PC and a modem” being able to “publish whatever content they can create.”


HAS IT COME TRUE? Big “yes.”

The ease with which this content can be “distributed worldwide at basically zero marginal cost to the publisher.”


HAS IT COME TRUE? Big “yes.”

“Intense competition,” some of it successful and some of it a dismal failure, “in all categories of popular content.”


HAS IT COME TRUE? Big “yes.”

“Printed magazines” can be “served by electronic online editions.”


HAS IT COME TRUE? Qualified “yes.” It’s still unclear how online advertising can raise the revenues that print advertising did.

“To be successful online, a magazine…must…have audio, and possibly video,” and not just “take what it has in print and move it” online.


HAS IT COME TRUE? Qualified “yes.” Too many magazines do exactly that: move what it has in print online. Magazines need to do a much better job of giving consumers a reason “to put up with turning on a computer to read a screen.” And Gates obviously underestimated the importance of video. “Possibly”? No, definitely.

Concerning the “breadth of information on the Internet,” it will be “enormous…”.


HAS IT COME TRUE? Big “yes,” but Bill Gates conspicuously missed the importance of “SEARCH” in order to find things in this avalanche of information. Perhaps if he had, Microsoft would have invented Google.

Concerning pay for content providers, “The long-term prospects are good, but I expect a lot of disappointment in the short-term as content companies struggle to make money.”


HAS IT COME TRUE? Big “yes.” Gates got it exactly right: Content companies (bloggers included) still struggle to monetize their efforts. Did Gates envision a solution to this problem? He did:

“In the long run, advertising is promising.” He also foresaw subscriptions as revenue-raisers.


HAS IT COME TRUE? No. Gates wrote (1996) “today the amount of subscription revenue or advertising revenue realized on the Internet is near zero.” Now (2015), it still is pitiful, and most content providers can’t hope to make a living through either subscriptions or advertising. So, while Gates understood that “paying for content doesn’t work very well,” he was overly optimistic that the problem would be solved. His statement that “This technology will liberate publishers to charge small amounts of money” has failed to materialize. Unless you’re Parker or Jancis or somebody like that, almost no wine blogs make money.

Finally–gotta say it–Bill Gates missed social media. If he’d stumbled onto that, Microsoft could have invented Facebook.

Still, this little 1996 paper has turned out to be one of the most important and visionary analyses ever written concerning the Internet.

  1. Bob Henry says:

    On this subject, one should consider the projections Gates made in his tome “The Road Ahead.”

    One person’s 2014 retrospective critique:

  2. Bob Henry says:

    Proffered anew . . .

    Excerpts from The Wall Street Journal “Opinion” Section
    (July 8, 2009, Page a15):

    “To Rake It In, Give It Away”


    Book review by Jeremy Philips

    [executive vice president of News Corp., which owns Dow Jones & Co., the publisher of The Wall Street Journal]

    “Free: The Future of Radical Price”
    By Chris Anderson
    (Hyperion, 274 pages, $26.99)

    It is easy to see why FREE is an appealing price for consumers, although HOW COMPANIES MAKE MONEY BY GIVING STUFF AWAY IS LESS OBVIOUS. In “Free: The Future of a Radical Price,” Chris Anderson, the editor of Wired magazine and the author of “The Long Tail,” sets out to explain why free is an increasingly compelling business model.

    Mr. Anderson explains how the underlying economics of digital services make free business models far more widespread than they were in the analog world. Central to the new “free economy.” he says, are the “near-zero ‘marginal costs’ of digital distribution” …

    Free business models, whether purveying digital products or tangible goods, are based on cross subsidy … The free service is a loss leader (and cheap marketing) for premium paid services.

    Advertising is plainly the best known free model. You don’t pay for Web searches, any more than you pay for network television, because in both cases ads are attached to the product you are getting free. As Mr. Anderson notes, though, ADVERTISING CAN’T PAY FOR EVERYTHING ONLINE. IF YOU HAVE A BLOG, “no matter how popular,” THE REVENUE FROM ADSENSE — a Google service that places ads on Web sites — WILL PROBABLY NEVER “PAY YOU EVEN MINIMUM WAGE FOR THE TIME YOU SPEND WRITING IT.”

    Of course, that’s fine for bloggers more interested in fame or influence than in money or for blogs (like Mr. Anderson’s own) that are loss leaders for more lucrative endeavors, such as writing books or making speeches. BUT IF YOU HAVE TO EARN A LIVING FROM THE WEB, “FREE” CAN BE A PROBLEM. …

  3. Bob Henry says:

    Proffered anew . . .

    Excerpt from The Wall Street Journal “Off Duty” Section
    (March 29, 2013, Page Unknown):

    “Five Wine Blogs I Really Click With”


    By Lettie Teague
    “On Wine” Column

    . . .

    There are about 1,450 wine blogs today, of which about 1,000 are nonprofessional endeavors (the rest are “industry” blogs), according to Allan Wright of the Zephyr Adventures tour operator, who has organized the 2013 Wine Bloggers Conference in North America for the past five years. But most bloggers haven’t been doing it very long: “Only 18% of [wine] bloggers today have been blogging for more than six years,” he said.

    Most of the bloggers were doing it just for “personal satisfaction,” Mr. Wright said, since THE POSSIBILITY OF MAKING MONEY WAS QUITE SMALL. Alder Yarrow, who writes a much-talked-about blog, Vinography, told me that he earns $12,000 to $16,000 from it annually, most of which comes from banner ads. Said Mr. Yarrow, who began his blog in 2004 and has a day job: “MONETIZING A BLOG IS VERY HARD if you don’t want to sell products, sell advertising to wineries and therefore look like a shill.”

    Most bloggers are more like Alice Feiring, a traditional wine journalist a traditional wine journalist [former Time magazine wine writer, potentially read by millions of subscribers and “pass-along” readers] and blogger who HAS NEVER MADE “A CENT” FROM HER BLOG, the Feiring Line, which she started in 2004. (It’s one of the few that I read on a regular basis.) But unlike most other bloggers, Ms. Feiring has a newsletter; she has 450 SUBSCRIBERS paying $65 a year for 10 issues. “The blog was a soapbox; the newsletter is a mini-magazine,” Ms. Feiring explained.

    . . .

  4. Bob Henry says:

    As the above articles attest, blogging pays “psychic income,” not greenbacks.

  5. The topic reminds me of when Edgar Bronfman Jr. sold Seagram’s substantial shares in Dupont, which spun off a huge amount of dividend income, in order to invest in the entertainment business (MCA, Universal, etc). He also repeatedly claimed “content would be king” and that have ownership of the musical and cinematic archives would become tremendously valuable as entertainment came to be distributed on the internet. Whoops, didn’t work out that way:

  6. Bob Henry says:

    If content is king, we Angelenos have even less wine news to read and discuss.

    Former Los Angeles Times restaurant critic-turned-wine columnist S. Irene Virbila has accepted a buyout offer to leave the newspaper. (My source: Corie Brown, a former Times wine writer who after her own departure from the newspaper launched the Zester Daily website.)

    Some of Irene’s picks (photo gallery):

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