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.
