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Newstex Launches Content On Demand
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Posted On April 18, 2005
A new company officially joined the world of content providers when it chose to launch its premium newsfeed service at the recent Buying and Selling eContent conference (http://www.buy-sell-econtent.com). Newstex (http://www.newstex.com), founded in late 2004 by president Larry Schwartz and CEO Steve Ellis, has announced Content On Demand, which offers full-text newsfeeds to content redistributors and enterprise customers. Content sources include branded newswires, newspapers, magazines, financial and business sources, official government feeds, and Weblogs. The company claims to be unique for its low-cost business model, newly developed technology built on an open source platform that is reliable and fast, flexibility to meet evolving customer requirements, full text plus embedded images in the feeds, and the financial commentary licensed from selected bloggers. Newstex is currently targeting the financial, government, and entertainment markets.

Publishers for Content On Demand include The Associated Press, BBC Monitoring, Business Wire, Knight Ridder/Tribune Business News, EDGAR Online, M2 Communications, Market Wire, PR Newswire, PrimeZone Media Network, Xinhua News Agency, United Press International, and others. The full-text content is available in standardized format, with stock ticker symbols, people tickers, taxonomy-based categorization, and meta-tagging, all as XML or RSS newsfeeds—but without an end-user application or interface. Its customers bring the feeds into existing applications or develop an application to sell.

If Newstex sounds eerily similar to Comtex, it’s probably not a coincidence. Its two founders were top executives at Comtex, both of whom resigned in February 2004. After fulfilling a 4-month non-compete agreement, the two identified an opportunity. Schwartz explained: “It’s a mature business with a commodity product, but we saw the chance to offer significant benefits to both customers and publishers.” He sees Newstex as a “utility.” He added: “What we do is unsexy. It’s just a pipe.”

“The content industry is changing,” said Schwartz. “With the rise of open standards, XML, RSS, and blogs, one size does not fit all. Content On Demand from Newstex delivers tailored newsfeeds as a service, eliminating the hassles of acquiring and integrating full-text content for our distributor and enterprise customers—instantly providing them with branded news at reduced cost, minimum risk, and optimum ROI.”

“Today’s institutions need just-in-time content value from publishers with high efficiency and usability,” commented John Blossom, president of Shore Communications, Inc., a research and advisory service focusing on organizations that deal with professionally oriented content. “Many powerful content feeds require investments in costly and complex feed processing systems that drain limited resources and budgets away from other critical content needs. Content On Demand from Newstex provides an attractive solution for managing content delivery from leading news and commentary sources that maximizes the efficiency and usability of critical sources without costly infrastructure investments.”

Newstex keeps its costs low by operating as a totally virtual company, according to Schwartz. It has no office. There are only a few full-time employees; the rest are contractors. Newstex used a virtual technology team in St. Louis (NewsEngin, Inc., a small company founded by former journalists) to develop its system. Another former Comtex executive, Dee McGonagle, helped Newstex with its content acquisition and publisher licensing. The company is now processing 50,000 stories a day.

Commenting on the business model, one industry observer said: “It sounds like the chance for a fresh start, unencumbered by old Comtex agreements and technology.” Blossom called Newstex an “interesting combination of old and new business models” and commented further on his site: “Feeds are an old game, but there’s new life in them when new thinking is applied.”

Chuck Richard, vice president and lead analyst at the advisory firm Outsell, Inc., calls the Newstex model an “efficiency play.” He commented: “What Newstex is doing is not going to set the world on fire, but the company may do a better job than Comtex, since that’s a company that’s just not performing. There’s definitely a niche opportunity there.” He noted that, for the last several years, Comtex has been at the very bottom for financial performance in the Outsell 100 Company Monitor, a database that tracks and ranks the quarterly financial performance of 100 public information and content software technology companies that make up a cross-section of the industry.

While Newstex asserts the benefits of having full-text licensed content, Richard also noted the attractiveness of a model like that of Moreover, which doesn’t license anything and just provides headline feeds. He said that many people are satisfied just to see headlines and then link to the sources if they are interested.

In response to questions, a spokesperson for Comtex News Network, Inc., a company established in the early 1980s, indicated that the company was aware of Newstex but had no comment on its new product. Comtex is a wholesaler of real-time news and content for financial and business information distributors. “Our extensive client base has given us no indication that they [Newstex] are competitors. Our track record and client base speaks for itself.” She pointed to numerous technology improvements on the Comtex system and to developments like the recent beta launch of Comtex SmarTrend Alert (CSTA). The new equity alerting service features a price trend change notification system based upon proprietary automated time-price series pattern recognition technology. While Comtex still has an acting CEO, she said the company sees no urgency in the search, instead seeing its top priorities as customer service and product development, which are now being led by Chip Brian, vice president of operations.


Paula J. Hane is a freelance writer and editor covering the library and information industries. She was formerly Information Today, Inc.’s news bureau chief and editor of NewsBreaks.


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