THE IT PROVIDER BUSINESS MODEL

“The Washington Post is one of several companies selling a content management platform. WordPress, whose parent company Automattic raised $300 million from Salesforce earlier this month, is perhaps the most well known. Vox Media, which owns The Verge, Recode, Eater and is acquiring New York Magazine, licenses its Chorus publishing platform to media outlets such as the sports site The Ringer.”

— Nat Levy, Geekwire.com

Being an IT provider is to be a member of a very exclusive club. Only the largest, best-funded, and most established publishers can create and then sell or license technologies and, as a result, tech sales and licensing was the least common revenue source for publishers in a Digiday 2018 survey. Most publishers lack the resources to build tech products because it takes lots of expensive talent and lots of time to build market-ready technologies.

Purch, for example, started in 2015 and took four years to build its $24 million ad platform for publishers, according to Digiday.

It also takes big investments, like Amazon CEO Jeff Bezos’s purchase of The Washington Post, which then built Arc and Zeus, its content management platform and advertising platforms, to license to other publishers.