Today’s column is written by Chris Walters, CEO at Encompass Digital Media.
While in the past, media and entertainment providers had only a few channels to deliver content to consumers, today content can be consumed virtually anywhere, anytime and on any screen. Traditional TV still captures most of all viewing, but the number of players competing for consumers’ video time and attention is rapidly increasing.
Consumers have nearly six hours per day of available viewing time, forcing media and entertainment providers to scramble to develop new and creative ways to draw and hold their attention. The challenge lies in where, how and when to focus development and investment.
This investment is required as media companies face increased pressure to grow revenue and cut costs. The value of a linear subscriber is still more than 12 times that of a digital subscriber, according to Devoncroft Partners’ 2016 Big Broadcast Survey. This is pushing media companies to aggressively experiment with new distribution in several ways, each of which requires significant investment, knowledge and analysis to effectively pursue.For example, media companies are experimenting with varying local or regional distribution opportunities. Others are launching OTT subscription bundles for video on demand (VOD) and linear content across all digital platforms directly to consumers.
They also are trying out immersive sports viewing experiences that allow users to watch the same event from numerous camera views. And media companies are extensively syndicating premium content to digital-only platforms, such as YouTube, Amazon Prime and Netflix.
The Allure Of Local
Media companies also are experimenting with creating regional, local or individual versions of a channel.
These targeted channels are very appealing to networks because the localization can increase viewership and monetization. The ability to substitute local avails is not a new concept in this industry. What is new and exciting is the ability to swap any ad and program dynamically based on regional and local requirements.
Channel marking technology is enabling clients downstream of the channel playout system more flexibility to package content in a variety of ways with less manual effort.
Rise Of VMVPDs
Today, we are also seeing steady growth in the virtual MVPD (vMVPD) business models where traditional VOD distributors, such as Amazon, Hulu and VUDU, are now offering linear OTT channels, along with VOD assets to create a full offering similar to traditional MVPDs.
A few market participants have massive scale. All vMVPDs have a need to efficiently acquire content, normalize it for streaming and distribute the content to content delivery networks.
Experimentation is key to finding the right content, distribution and monetization channels for that content. This experimentation can mean capital investments in hardware, software, highly skilled labor or cloud services. If companies could spend without limits to develop all the new paths to engage and monetize audiences, of course they would, but they can’t.
In trying and testing new revenue opportunities, one must include a calculation of probable revenue increases against cost and complexity. Then, those new ideas need to be deployed in a cost-effective and efficient manner.
Ideally, this experimentation uncovers new, more profitable ways to deliver content and build audiences across traditional television and OTT outlets. Experimentation with new technologies is expensive and complex, and the number of disparate parties and technologies involved is daunting.
However, viewers aren’t tuning in for unique technical infrastructures and operations. They just expect great viewing experiences on all platforms. They are tuning in for the content and the content alone.
For media companies to thrive in a landscape that is increasingly challenging with rapid expansion of consumption many new channels, it’s crucial to experiment with and invest in the content that differentiates them and the back-end technology, operations and infrastructure needed to deliver it.
Follow Chris Walters (@chriswalters), Encompass Digital Media (@Encompass_Now) and AdExchanger (@adexchanger) on Twitter.