Key Ways to Monetize Your Video Content Assets Gaining Efficiency, Scalability, Agility and Intelligence in the New Video Marketplace
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share: Key Ways to Monetize your Video Content Assets Gaining efficiency, scalability, agility and intelligence in the new video marketplace 2 Introduction Core model - 3 Subscription Core Model - 5 Transactions Core Model - 7 Advertising 9 Mixed models 10 Summary Presented by: Key Ways to Monetize your Video Content Assets // AWS Elemental // Dec. 2018 1 share: Presented by: Introduction Make no bones about it, the core of the video business revolves around This document describes some of the basic models that can help join monetization of content assets—how to turn art, information and the dots between content and revenue, giving some examples of services entertainment into streams of revenue. We are experiencing an epic series around the globe that effectively employ the different models. We also of changes in the marketplace for content that include the key players in the want to highlight the aspects of the current technology evolution that are value chain, the way we think about video, the content being created, and the important in driving the economics of each type video service, and what to technology that powers our experience. Change in these dimensions seems look for in the future. And, of course, no discussion on the monetization pervasive but, in many ways, the fundamental aspects of how that money is of content would be complete without acknowledgment of the threats to made—and the threats to the businesses—are largely recognizable over more the business of service operators and the appropriate security approach to than 25 years of digital video distribution. address those threats. The core models of video monetization were not invented alongside the technologies of Internet video service, but have existed almost since the dawn of broadcast TV itself. What has demonstrably changed over time is the range and scope of the options that exist to enable revenue generation strategies. The technologies now available massively increase the efficiency, scalability and reach of video services - and their tactical agility in response to a changing consumer landscape. And these shifts also enable new ideas about content consumption—time shifting, binge watching and enjoyment of a new freedom of device choice. The technologies now available massively increase the efficiency, scalability and reach of video services - and their tactical agility in response to a changing consumer landscape. Another thing that seems to have changed is the democratization of video creation and service delivery. The technology that powers both is now remarkably broadly available, requires little capital investment and is often stunningly easy to use. You don’t have to be a Hollywood mogul to start a video business anymore. If you have a creative idea, or see an unmet need, many new options exist that can support converting that idea into a stream of revenue. Key Ways to Monetize your Video Content Assets // AWS Elemental // Dec. 2018 2 share: Presented by: Core model - Subscription The basic model of a subscription is almost universal—a regular payment and, more internationally, by companies like iflix, Spull and Britbox. gives time limited access to a tier of service where consumption is Indeed the economics of the subscription approach can favor smaller unlimited. In today’s video world, the pleasure of pure subscription players with niche offerings. is near uninterrupted enjoyment of the content itself with very few distractions - no commercials, no prompts for additional payment and There are a host of technical advances that have helped underpin the no costs to experiment with new and unfamiliar genres. Subscription growth of this type of service, reduce the investment hurdle and improve models are also an ideal fit for live content—typically marketed as a bouquet of branded channels—with optional DVR or catch-up The prime pure example of the subscription model for on- capability. Typically the subscription cost varies with the breath of the demand content is Internet giant Netflix, whose customer content offer - and with the desired quality level. It’s certain that 4K/ centric strategy is to provide an easy to navigate library of UHD/HDR delivery definitely commands a premium price point. exclusively licensed content, including their own productions. The economic driver for consumers that’s driven the rise in popularity of subscription services around the globe is cost effective, unfettered access to a reasonably deep and regularly updated selection of content options. To encourage a regular payment commitment the library needs to be well curated and/or the live channels must include a compelling series or regular events. For a service provider the content costs and the delivery costs are a function of how much content each paying subscriber actually watches. The pressure is always on to drive operational costs down while keeping quality and selection at a level that maintains the subscriber relationship and prevents churn. The prime pure example of the subscription model for on-demand content is Internet giant Netflix, whose customer centric strategy is to provide an easy to navigate library of exclusively licensed content, including their own productions. With no advertisers to please, the content can be free of most censorship, although special limited selections are curated for children. A leading live Internet service subscription is Sling—providing a credible and financially flexible alternative to a pay TV satellite service from the same company. A similar approach is taken by players such as HBO with their HBO Go service Key Ways to Monetize your Video Content Assets // AWS Elemental // Dec. 2018 3 share: Presented by: the balance of revenue and expenses. A big operational cost for content and scenes of different complexity require varying amounts subscription services is CDN bandwidth, so optimization of content of information in each video frame. QVBR is an encoding rate encoding profiles can result in significant benefits. Advanced codec control technique that automatically adjusts to these differences, to technology helps optimize video quality level at each tier of video create a stream that dynamically balances video quality with bitrate bandwidth, for delivery at low mobile resolutions all the way up to requirements over the full range of video complexity. QVBR eliminates premium 4K/UHD/HDR quality for both live and on-demand, and is a the guesswork and frustration of managing your “bits budget”: When continuously developing science. One of the most recent advances on video scenes are more complex, QVBR spends bits to maintain desired this front is Quality-Defined Variable Bitrate (QVBR). The information video quality levels. When video quality levels are reached, QVBR contained in encoded video is inherently variable over time - different reduces the bits used. In the process, QVBR saves significant costs for both CDN egress and storage. Access to premium quality, cost effective encoding power is a critical competitive advantage for Internet video service operators. When managing an on-demand library, the load on such a resource is fairly bursty so it’s a big advantage to be able to switch access on and off as required. This is, of course, one compelling advantage of pay as you go cloud resources. Access to premium quality, cost effective encoding power is a critical competitive advantage for Internet video service operators. To support the business dimension of subscription services, what’s required is a security infrastructure based around DRM that protects the on-demand library and live channel line up and that entitles the right content selection for the consumers purchased tier of service. Apart from brute force attacks on DRM protected content, which is increasingly rare, a specific threat model exists for subscription services around credential sharing or theft, so service security features need to include limits on concurrent streams and/or devices used per subscriber account. Key Ways to Monetize your Video Content Assets // AWS Elemental // Dec. 2018 4 share: Presented by: Core Model - Transactions Transactional payment approaches have a long history in and around the pay TV market including, for example, VOD offers and a large part of the DVD rental business. You can think of pay-per-view as the equivalent of a concert ticket or a night at the movies - at a much lower cost. This model is, however, now somewhat more specialized than the subscription payment offers and typically applies to content that is unique and often that is heavily promoted through other channels. In terms of Internet video service, due to the way that content is licensed on a time window basis, the transactional model is the only way to see premium movies close to their theatrical release date. In the context of live content, transactional payment is typical for premium sporting events, including, for example popular boxing matches. You can think of pay-per-view as the equivalent of a concert ticket or a night at the movies - at a much lower cost. Services such as Apple iTunes exemplify the transactional model by offering a broad library of movies and TV series with a pricing structure that offers both time limited rental and permanent access purchase models. As an example of live events monetization, the UFC Fight Pass offers premium, multi-device pay-per-view access to major contents together with a library of prior events and background profile content. WWE Network is also a transactional online event video streaming service offering WWE’s pay-per-view fights, with the additional incentive of access to thousands of hours of video on demand that includes a library of past pay events. All programming is viewable on a wide range of devices including TVs, game consoles, phones, tablets and desktops. Key Ways to Monetize your Video Content Assets // AWS Elemental // Dec. 2018 5 share: Presented by: In a rather unique twist on the model, the Cinépolis KLIC service is a between events.