Is Monetizing Content Getting Easier or More Difficult? 0

Is it getting easier or more difficult to monetize content? Conflicting signs abound.

For the first time ever, traditional paid TV services experienced a net industry-wide subscriber loss over a four quarter period.  For the 12 months ending March 31, 2013, the 13 biggest U.S. cable, satellite and telco TV providers lost roughly 80,000 subscribers.  But let’s remember that 95 million households subscribe to paid TV services so we are talking about a roughly 0.084 percent loss.

At the same time, the economic interests of cable companies are diverging as large cable companies want to maintain an all-you-can-eat bundled pricing model, while small and mid-sized cable companies are more willing to explore a la carte pricing and services.

But there is still plenty of research suggesting consumers find value in their paid TV services. Recent research from KPMG finds UK media consumers appear more willing to pay for content – especially easy to access online content. Just over half of respondents (53%) said that one of the advantages of online content was that they could access it for free. That same figure was 80% three years ago. Over of third (36%) of respondents said they prefer to access media online as it offers better ‘value for money’, compared with only 15% in 2009.  Aereo’s business model is largely built on the premise that consumers will pay for convenient online delivery of otherwise available free over-the-air content.

Elsewhere online Netflix of course showed tremendous subscriber growth in their most recent quarter and as I mentioned previously, YouTube recently began paid channel services.

While traditional paid TV services struggle to grow their respective subscriber bases, they are growing revenue as the monthly fee charged subscribers continues to grow.

Monetization of content comes down to distribution which is historically driven by geography.  But in an every-device-connected world,  geography is no longer relevant and so distribution rights have to be completely rethought. Curation is king in a ubiquitous world where any service provide can be on any device.

US consumers spend more on content – and entertainment generally – than ever before.  But like many things in a digital world – audiences are becoming increasingly fragmented. Monetizing in a fragmented world requires a different approach. One must curate a million niche audiences. Those niche audiences are defined by not only content but also by the dimensions of time and space (ie location).  While consumers are showing more willingness to pay for content – it is obviously the curation they are coveting.

 

The Future of OTT 0

While there is frequent discussion that studios and other rights holders will eventually take their content directly to consumers through over-the-top distribution paths and threaten content distribution platforms, there continues to be a myriad of signs suggesting traditional distribution channels like MSOs will continue to have a major role in content dissemination.  Arguably, the tie between MSOs and rights holders is strengthening as many studios develop second-screen approaches that leverage the MSO-customer relationship.

Universal (content) Search 0

Universal search – the ability to search for content across sources – is one of the holy grails of consumer content management.  Over the last 5-6 years search has improved significantly and become more ubiquitous.  Google Desktop is a great search tool across locally stored files.  I’ve written in the past about Xobni and the ability to search and organize across email content (your inbox and archive files). Adding the link in the previous sentence was easily done using the search capabilities in the Wordpress link tool.

Google – through Google TV – is (trying to) make a strong push into video content search.  Crestron has been active here as well. @juliejacobson writes about a Crestron patent published a few weeks ago.  The patent abstract describes the pantent as:

a method for obtaining a single set of media search results from a search of media sources. The method includes providing a search query, executing a search of each of the media sources for media based on the provided search query, generating results of the searches, and consolidating the results of the searches into the single set of search results that include a list of media items with associated metadata.

This is exactly what is needed in content management.  Content is exploding across a myriad of sources and the ability to search across these sources with a single gesture is extremely limited.  One of the greater obstacles thus far in this endeavor is that the approaches have been hardware-centric. In order to gain wide acceptance, I think universal search will need to take place across a number of devices.  Services like Netflix have gained ubiquity because they are available across content-oriented devices. Universal content search will not reach a similar ubiquity until is is hardware agnostic.

Further Fragmentation of Video Distribution Services and What it Might Look Like 0

We’ve already seen some fragmentation of video distribution services and it begets the question if this is just the beginning.  Further fragmentation will have some common characteristics.

First, I believe this further fragmentation will happen around lower dollar value digital assets.  These types of digital assets have the likeliest chance of propagating further fragmentation because their appeal will be strongest among niche segments of the population as opposed to mass audiences.  Therefore, these lower dollar value digital assets will generally have older publication dates and be less likely to potentially damage existing owner-distributor relationships – like the relationships between studios and MSOs.

Secondly, as alluded to above, fragmentation will occur (and ultimately be most successful) where niche audiences exist.

Third, fragmentation makes sense where there is a concentrated appetite for given digital assets (ie content genre) and there is also a wide assortment available to distribute.

Fourth, fragmentation makes sense where renting v. owning makes sense.  One can easily argue we are already there on this fourth point.

NetFlix is of course the first-mover here and I think their recent price increases were a move to increase the dollar value of the digital assets for which they have rights.  But if we apply the NetFlix model to other lower dollar value digital assets we can imagine low cost streaming services for niche content like fitness videos, certain foreign films (by language for example), or other niche content.  These type of content have concentrated value within the niche.  So they won’t damage owner-distributor relationships, but they’ll be able to support a monthly subscription fee.

As Internet-enabled TVs generally become more available or if traditional cable content is eventually distributed via apps across app-enabled TVs such that users can access different feeds of content seamlessly across app platforms then these isolated services (and thus fragmentation) will gain steam.

 

 

Hulu v. NetFlix 0

Data from Nielsen on Hulu and NetFlix users (here and here). Not too many surprises though I was surprised by this:

half of all Netflix users connect via a game console (Wii, PS3 or Xbox Live)

 

Conduits of Content 0

In a few weeks I’m speaking briefly on a call with executives at Korn/Ferry – the world’s largest executive recruiting firm. My remarks will cover major trends in the consumer tech space and how the global search for talent will be impacted.  For several years now, I’ve talked about companies reaching to create a 360 degree solution. Today the drive towards a 360 degree solution is pronounced. In some corners of consumer tech it is no longer simply a nice approach – it is an integral part of competing in that segment. So how does this impact talent acquisition?