The DPP recently published Content Monetisation, the second report in its Making Media Pay series. Veset worked with the DPP, alongside other media businesses, to explore the challenges and best practices in how content companies monetise their content. The resulting report reflects on different strategies and business models, considers ad-technology innovations, and looks at how different organisations are monetising content.
The widespread consumer shift toward OTT streaming services is continuing, yet the SVOD bubble appears to have burst, and consumers now have more choice available to them in the form of different types of ad-supported services. It’s not surprising then that content owners are seeking out additional ways to monetise content and supplement income with additional revenue streams. These changes are driving innovation and creating new monetisation opportunities for content providers.
In this blog, we’ll highlight some of the key themes that were identified in the report.
Although the SVOD market is forecast to continue to grow, growth has slowed considerably. The media industry is clearly moving away from the pure subscription-based model, in favour of ad-supported alternatives. Many SVOD services have already made the move to supplement their income with advertising revenue by introducing ad-support tiers. With global TV advertising forecast to increase, particularly across digital advertising, this shift away from SVOD towards advertising-based revenue models is set to continue. At the same time, there is also increased focus on investment in better data capture to improve user experience and reduce churn.
There’s currently a lot of interest among media companies in Free Ad-Supported Streaming TV (FAST) services, because it presents big opportunities to generate revenue. However, although the model is proving successful in the US, monetisation in other regions is more difficult. This is because monetisation is much harder outside of the US, due to diverse audiences and a need to localise ads and services, meaning that returns are lower. For the model to succeed, ad delivery costs need to reduce significantly, and this is where AdTech innovation will make a difference. As well as being a stand-alone revenue stream, FAST can also be used to build brand strength and to drive users towards SVOD services.
With shoppable TV, broadcasters insert product placements or advertisements into content to allow viewers to purchase directly from the content or from a secondary device like a smartphone. It has big potential, but is still in its infancy. The jury’s out over whether TV will be the shopping mall of the future. Although broadcaster trials with affiliate revenue and shoppable TV have generated returns, this has unfortunately been below expectations. For this revenue stream to take off, the technology needs to mature, and content providers will need to work together with partners, rights owners, and production companies to facilitate in-stream transactions.
CTV’s share of global ad spend has grown significantly as CTV penetration has increased globally. CTVs are extremely attractive to advertisers because they offer a highly targeted and measurable platform that can reach a large and engaged audience. This growth of video consumption on CTVs is a major enabler for various innovations in advertising technology, including interactivity, virtual wad placement, shoppable TV, dynamic ad insertion, programmatic exchanges, and more. The growth in popularity of CTVs is also creating a shift in the playing field as CTV manufacturers become the new content aggregators. In doing so, they are able to monetise the content journey as well as the content itself.
If content providers are to maximise monetisation opportunities, they need to fully exploit the rights available to them. To do this, they need data that provides valuable audience insights to develop targeted ad propositions, enable price optimisation, and inform content development to improve viewing figures. Rights holders and content distributors need to align their thinking in order to capitalise from innovations in monetisation strategy and Adtech. This is particularly apparent with transactional shoppable TV and when implementing dynamic virtual ad placement. Rather than being viewed as a set of restrictions, rights need to be seen as a commercial enabler.
Monetisation strategies available to content providers are broadening and new trends are emerging, which are predominantly based on advertising revenue. With so much innovation, particularly in AdTech, it’s an exciting time for the media industry. To capitalise on these changes, broadcasters and content providers need the right monetisation strategy, and the right content on the right platform.
With Veset’s SaaS advanced cloud playout platform, Veset Nimbus, content providers can originate, broadcast and manage professional linear channels entirely in the cloud. Request a demo to see how Veset Nimbus can help you optimise your monetisation strategy.