Is Content a Business Moat?
As an entrepreneur and investor, I always want to build or invest in businesses with defendable competitive advantages. In the tech world, we call these advantages “moats” – features that set a company apart and make it hard for others to compete directly.
Lately, I’ve been noticing more and more companies touting their “content” as a key strategic asset and moat. From media outlets to e-commerce brands, many claim their articles, videos, podcasts and other content drive loyalty and sales.
This prompted me to take a closer look at content moats and whether they can be a sustainable competitive edge.
What Makes An Effective Moat?
First, what makes an effective moat in general? A few key criteria come to mind:
- Difficult to Replicate: Moats arise from proprietary assets or processes that are non-trivial for competitors to recreate. Replicating a moat requires significant time, investment, or expertise.
- Provides Value to Customers: An activity or asset isn’t a moat unless it tangibly benefits customers and influences buying decisions. Features don’t create competitive insulation if they aren’t useful.
- Enhances Defensibility Over Time: Moats get stronger with age and compounding benefits. As the gap between the moat haver and non-haver grows, catch-up becomes less feasible.
So in simple terms, moats are proprietary, value-driving assets that are tough to copy and gain strength with scale. Does the content fit this bill?
The Content Moat Hallmarks
Content marketing continues to grow in popularity. But is all content created equal when it comes to defensibility? Let’s evaluate some content moat factors:
- Production Costs: Creating high-quality, impactful content isn’t easy or cheap. From topic research to writing, editing, and promotion, skilled human time and effort is required. This introduces moat potential.
- Audience Trust: Media outlets like the Wall Street Journal claim trust as a central moat. Once trust is established through accurate respectable journalism, it self-reinforces and competitors struggle to displace it.
- Personalization: The more content caters to narrow interests or perspectives, the lower its across-the-board appeal but the higher its loyalty. Newcomers can’t easily replicate niche communities and viewpoints.
- Exclusivity: Paywalls, subscriptions, closed platforms, and private groups raise exclusivity barriers around content. This makes access harder to replicate if consumers are hooked on exclusive status.
- Volume and History: Sheer output volume over time increases the competitive effort needed to catch up. And historical content may remain relevant for years, compounding the catalog value.
These attributes can make content defensible. But most content plays likely only check some of these boxes, not all. And even perceived moats may erode quickly in the fickle world of consumer attention. Let’s analyze some examples.
Newsy Substacks – Moaty or Not?
Substack blew up over the past few years as THE hotspot for independent writers and “solopreneurs” to launch email newsletter businesses. Can niche paid newsletters be moaty? Maybe…
Pros:
- Writers invest heavy time honing perspectives and styles. Hard for new writers to instantly win trust and readership at the same level.
- Readers pay real money for these emails and their proprietary insights/angles. Financial buy-in enhances loyalty.
- Consistent, exclusive updates straight to core audience inboxes. Not as easily discoverable by or promotable to wider internet masses.
Cons:
- Anyone can start a Substack on any topic. Their takes may quickly resonate more than existing ones.
- Readers face no or little lock-in if they lose interest in a writer’s POV or new voices grab them more. They can easily subscribe to multiple newsletters.
- Emails are just text. Easier to produce at volume than say heavily edited video.
My take – some moat potential but plenty of ongoing competition risk for individual writers as audience tastes evolve. These remain personality-driven media businesses vulnerable to hot new voices. Platforms like Substack have more structural defensibility than any one creator on them.
Recipe Blogs – Sticky Content?
From household names like Smitten Kitchen to scores of independent food bloggers, recipes populate many content marketing plays. They are often augmented by beautiful photography and backstories that attract loyal, engaged readers. But are the core recipes themselves a moat?
At first glance – maybe! Recipes seem hard to replicate exactly and readers return to their proven favorites.
But upon reflection…not really:
- Recipes are simple formulas using common ingredients. Other sites can cook up their versions easily.
- Photos drive appeal, but visual styles can be mimicked and even improved on.
- While some food chemistry skill and testing underlies the best recipes, there’s no true barrier to entry.
- Readers jump freely between sites and influencers chasing the hottest dishes. Their loyalty lies more with overall recipe quality than any one site.
So for most food bloggers, while content attracts an audience, it does little to lock that audience in or prevent competitors from gaining share. Better to think of recipes as marketing tools, not moats.
Niche Publications – Defensible Databases?
Specialty print and digital publications target niche consumer segments from golfers to physicians to new parents with customized content. These pubs often thrive on very focused content and access to hard-to-reach audiences.
But besides access, does their content itself confer defensibility? Sometimes yes:
- In professional realms like medicine and law, specialty publications compile hard-to-reproduce reservoirs of technical data, research, and analytics.
- Reader trust and loyalty to editorial perspectives can run deep, creating readership inertia.
- Substantial volumes of vertical content can take years to recreate from scratch.
But also risks to their moats:
- If a competitor can crack access to the core audience even in limited capacity, they may chip away share. Audience access is key.
- Reader trust and loyalty depends heavily on continued accuracy and insight quality. One bad editorial regime change could erode old editorial authority quickly.
- Database-style content advantages don’t always apply. Lifestyle content has shorter relevance cycles and less technical depth.
The Ironman Training Blog – A Sustainable Moat Case Study?
I recently came across what looks like a promising living example of niche content defensibility.
The blog Strength Running focuses exclusively on training advice and insights for long-distance runners. It’s been quietly building a community since 2007. Founder Jason Fitzgerald offers full marathon training plans and writes 5-10 meaty articles weekly for his email subscribers.
This ultra-lean, solo content machine appears to check several moat boxes:
- Doggedly sticking to a niche topic for 15+ years. It is hard for new single-person operations to recreate that sheer volume of niche content.
- Very engaged audience – 35-40% of open rates on emails far exceed peers. Deep trust cultivated.
- Coach-style personalized advice and training guidance. Readers follow plans religiously rather than passing trends.
- Fitzgerald experiments on himself and shares intimate details. Hard for competitors to mimic quickly at the same personal level.
This level of narrow specialization and trust seems more moaty. Strength Running’s model likely can’t compete for mass traffic against big portals like Runners World. But it looks strongly positioned to continue dominating its core constituency – the diehard distance runners willing to train the hardest.
Executing a content moat strategy still comes back to nailing the value prop for a well defined audience and riding that advantage relentlessly over the years. Fitzgerald got many of those pieces right.
Wrapping Up – Assessing Content Moats
Lots of brands in many verticals view content as their strategic linchpin. But relatively few may truly achieve enduring competitive insulation solely from that content. Why? Because at the end of the day, much content simply isn’t that hard to recreate or replace in consumers’ eyes. Even content that appears defensible at first can quickly lose its positional advantage if not continually refreshed with consumer value in mind.
As this piece hopefully conveys through various examples, the path to making content a true moat is nuanced. It likely involves solving for some combination of:
- Ongoing access to core audience attention
- Technical/craft barriers to imitation
- Trust and loyalty depth over time
- Personalization and niche positioning
- Platform exclusivity advantages
A company checking all those boxes can more credibly claim a content moat than one leaning on page views or scale alone. As both an entrepreneur and investor, I’ll be using this lens to assess startups touting their content advantages going forward.
What other perspectives on content moats resonate with you? What examples come to mind of companies truly leveraging content for enduring advantages? I welcome your thoughts!
