The Monetize segment of the BaM Content Chain® is about managing business processes for content rights and royalties, scheduling linear and non-linear services, subscriptions, and selling and managing advertising. In short, how broadcast and media companies make money; Arvato Systems’ Portfolio Manager, Ben Davenport, sums this up perfectly: “Put very simply, media is monetized through advertising, subscription service or, decreasingly, public funding or subsidy.”
We asked six IABM members to explain the drivers of change in this vital segment of the BaM Content Chain® and talk through the opportunities and challenges they are facing today, and what the future holds.
Drivers of change
“There has been a significant trend towards subscription services in the last years, with Netflix and Amazon dominating, now being hotly challenged by Disney and others, while some ad-driven services, such as YouTube are also now generating a significant, and growing, proportion of revenue from subscriptions,” Ben Davenport continues. “The increasing competition here
means that media companies need to offer the best and broadest catalogue of content, in turn requiring them to maximize usage of content they own or have rights too.
“For media companies relying on advertising revenue, competition in the past decade from ‘digital’ or ‘online’ has driven a lot of innovation in the ad sales space for TV. And despite ‘stable’ viewing numbers, ad revenues for TV continue to grow and there is still fierce competition between platforms and media companies which continues to drive change and innovation,” Davenport adds.
David Candler, Senior Director, Customer Solutions at Veritone, also sees the squeeze on the traditional broadcast model driving innovation. “Consumption platforms are growing and content experiences on mobile devices means that the M&E industry (e.g. studios, production houses, broadcasters, distributors, etc.) can now take advantage of new revenue options as they directly access the consumer’s device.
“For those in M&E relying on more traditional commercial models, there will need to be a realization of the new content and consumption models. They will need to rapidly assess and adopt new monetization methods; and keep adapting. Digital revenue streams are more and more in focus as these traditional sources become less effective. Digital, social media and OTT platforms are the new focus, with many rights owners are now building their own OTT outlets as the technology becomes more usable, cost effective and accessible. Adopting new advertising, subscription and other transactional revenue lines across these types of platforms is happening at a rate of knots. Content personalization also means that data and analytics is crucial to enable monetization (i.e. targeted content and ad-campaigns, etc.) as once again consumer activity drives changes in technology and revenue. In summary, there will be a lot more competition in the overall marketplace in terms of who the consumer decides to spend their time and money with,” Candler asserts.
“Ad-based monetization must be balanced by maintaining a high quality of viewer experience,” says Sam Jenning, Solutions Architect, Conviva. “As viewers are increasingly sensitive to heavy ad loads, repeat ads, and irrelevant or useless ads, especially on VOD content, publishers are shifting to server-side ad insertion – dynamically inserted ads personalized to individual viewers.
“With increased choice in the market and more ad-free services, consumers that can buy their way out of viewing ads will likely do so,” Jenning continues. “To enable this, the market is transitioning as providers experiment with varied business models that give consumers options ranging from truly ad supported to fully subscription based. In the middle is the hybrid model, which has evolved to become very successful in terms of monetization. It is expected that many SVOD and AVOD services will move towards the hybrid model as they look to monetize effectively. Privacy regulation will split ad sales into TV-like direct sold ads and campaigns intermediated by large tech or media conglomerates. Advertisers do not prefer panel or proxy metrics and will move to impression-based buys in walled gardens and large publishers as the measurement and service provided by those companies matures.”
Craig Buckland, CTO at Broadcast Traffic Systems, also identifies AVOD as the direction of travel. “We are seeing a distinct move towards Advertising Video on Demand services with consumers prepared to sit through ads for free content. At the same time, advertisers are increasingly looking to book an integrated ad campaign covering all media types. This represents a great opportunity for broadcasters to maximize monetization options.”
“Media companies have to find new ways to monetize because consumers have access to a wide choice of premium content at no cost,” says Alex Wilkinson, Head of Sales and Marketing, EMEA & LATAM, Accedo. “For some services, subscription models still work, but as many consumers have started to reduce the number of paid subscriptions, some providers are undoubtedly missing out. This means that they either need to offer something compelling enough to make consumers willing to pay or look to monetize through advertising.”
Serving multiple platforms
We asked our correspondents about the challenges of delivering ads to multiple platforms and how they are helping broadcast/media companies surmount these. As Craig Buckland of Broadcast Traffic Systems says, “The very complex nature of digital ad campaigns, coupled with the growing need to enable targeted ads and the lack of integration to existing workflows, is causing a massive challenge for broadcasters.”
“One of the primary challenges is to ensure a consistent user experience across all ads and content,” says Alex Wilkinson at Accedo. “This is especially difficult when it comes to new
innovative platforms, such as Augmented Reality, or low performing devices such as legacy set-top boxes. At the same time, media companies are looking to provide targeted advertising to deliver a more personalized and relevant experience. If done correctly, this can significantly increase the value of advertising and improve consumer engagement. The Accedo One platform ensures a consistent user experience for ads as well as for content. We have integrated our solutions, including our Augmented Reality experience, with Amazon Web Services (AWS) Elemental MediaTailor to enable targeted advertising.”
“The main challenges of delivering ads to multiple platforms are fragmentation and lack of trust, user tracking, ad reach, and frequency,” says Conviva’s Sam Jenning. “Ad reach and frequency are metrics which have traditionally driven brand lift for linear television, and they have become very hard to measure for digital and OTT ads due to viewer fragmentation and measurement challenges across platforms. Ad buyers have to make sense of multiple reporting streams from individual publishers, and the publishers themselves might use a mix of direct and proxy reporting. Efforts to address this reporting have forced unreasonable overhead into publishers in the form of endless measurement SDK and reporting requirements. Lack of trust also limits the scale of ad campaigns that run.
“Conviva’s SDK, which is already deployed to the largest publishers in the world, combats this issue by powering the playback data used by technical operations teams,” Jenning continues. “This means Conviva provides validated, standardized metrics based on census measurement. Conviva enables media companies to run ad campaigns without the overhead of multiple measurement vendors, without dictating which currencies or platforms can be used, and with the potential to measure and report on metrics cross-device and at the household level.
“Another one of the key challenges for our customers continues to be tracking users across social media and owned and operated platforms to understand unduplicated reach as well as ability to track migration from one platform to another. With cohesive measurement across both channels, like Conviva offers, publishers are able to understand consumption and channel/platform performance in a unified manner to help determine optimal channel/platform mix,” Jenning adds.
“As is often the case, the technological challenges are far easier to overcome than some of the change management in terms of process and organizations,” says Arvato Systems’ Ben Davenport. “While cross-platform advertising is a hugely attractive concept for many media organizations, getting past legacy structures is often the first hurdle in that transition. One of the ways we’re helping broadcast and media companies take on these challenges is to bring them together in a non-competitive environment to discuss and learn from each other’s experience. Facilitated by Arvato Systems, but with topics and presentations driven by ad sales professionals from broadcasters and media organizations across multiple regions, the Broadcast Sellers Circle does exactly that.
“Of course, we also help our customers delivering to multiple platforms by providing a cross-platform solution that enable them to easily create and adjust cross-platform campaigns. Along with the concept of ‘budget shifting’, we ensure that advertisers achieve their reach and frequency goals by dynamically moving placements between platforms depending on audience forecasts and postings,” explains Davenport.
Monetizing content in OTT
“We work closely with our customers to determine the best monetization strategy for their services, depending on a wide range of factors including content, demographic, platform scope, and more,” says Accedo’s Alex Wilkinson. “We then offer solutions and services to support whichever strategy suits each client, including Subscription, Video on Demand, Pay-for-Play, and Advertising Video on Demand. We help our customers define a feature set that best suits their offerings, such as paywalls, trials, and mixed-revenue models.
“Developing ways of monetizing new tech is also important and potentially lucrative. AR and VR offer unique mediums to deliver content to viewers’ homes. This also translates to fresh advertising opportunities, as brands are able to virtually place their products in the homes of potential customers,” Wilkinson adds.
Craig Buckland of Broadcast Traffic Systems sees an integrated, cross-platform approach as the answer. “We recently launched an advertising module that enables integrated linear and digital ad scheduling from one platform. The Digital Ad-Sales module allows advertising executives to fully integrate digital advertising on the major platforms into their linear campaigns. Broadcasters are able to manage advertising campaigns covering all media types. The module integrates both with broadcast automation solutions as well as with any ad platform server to ensure broadcasters can deliver and monitor the entire linear and digital campaign.”
Empowering media companies
“Conviva is already supported on OTT, CTV, and STB devices, while legacy measurement companies are still largely limited to web and mobile,” says Sam Jenning, and adds that “Conviva empowers media companies in five ways:
1. Technical analysis of playback and content engagement: Conviva provides clients with real-time data for every stream on every screen for every second of playback, including ad failure events typically missed by ad servers and analytics systems. Publishers use Conviva data to maximize inventory utilization and understand the relationship between ad load, content, and audience.
2. Building trust and reducing barriers to ad spend on historically measurable endpoints: For better or worse, ad buyers depend on legacy measurement which is tied to web cookies and mobile device IDs. By making OTT, CTV, and STB genuinely measurable, Conviva presents media companies with a path forward on these platforms that are otherwise disconnected from Internet 1.0 web-and-mobile verification vendors.
3. Providing AVOD household consumption graphs and segmentation: Conviva enables publishers to better understand viewers across services in order to maximize engagement based on viewer behavior. For multi-brand publishers, the consumption graph helps insights into maximizing share of viewing across a portfolio.
4. Enabling unified visibility into content consumption across all mediums including social media: This allows advertisers to optimize their advertising mix and understand what drives viewers to their owned and operated platforms.
5. Gain insights into social branded content, and track campaign performance: Utilizing social media enables publishers to unlock monetization opportunities with branded content and leverage their social channels to optimize monetization.”
Intelligent asset management
David Candler at Veritone sees intelligent asset management as key to monetization. “Our Digital Media Hub (our white label, content management and monetization hub) – fully integrated with aiWARE (our AI operating system) – is the future federation point for content owners to monetize their media assets. Industry data points to the growing importance of this type of intelligent asset management for the future of media owners’ businesses. More stakeholders (e.g. marketing, rights, production, post-production, partners, etc.) will increasingly turn to intelligent asset management to help them centralize and streamline their media processes, monetize their content, and drive growth in their businesses.
“Companies like Veritone are investing in this future by building and integrating relevant features into their products. Due to our robust and flexible APIs, we have the ability to expose the content residing in Digital Media Hub to multiple downstream distribution end-points such as OTT platforms, social media and applications through third-party technical partners, making it easy for additional direct-to-customer revenue streams to be activated quickly and efficiently,” Candler adds.
Open APIs are also key for Accedo, says Alex Wilkinson. “The total cost of ownership is currently high for video service providers, as they need to keep up with new tools and technologies and select different parts of the workflow from different vendors. Accedo One democratizes access to a flexible and scalable platform which includes open APIs to allow integration with a wide range of partners. This enables the use of best-of-breed vendor combinations instead of being forced into a boxed solution.”
What challenges does AVOD need to overcome to really take off?
It is becoming clear that many consumers are either unwilling or unable to pay for multiple subscriptions as the number of OTT platforms continues to grow rapidly. This is leading to a rise in the number of AVOD platforms around the world, where, as noted by Broadcast Traffic Systems’ Craig Buckland earlier, consumers are increasingly prepared to accept advertising rather than pay a subscription – particularly if it is relevant to them. “The main hurdle remains managing the complexity of OTT ads and enabling targeted ads,” says Buckland. “Broadcasters need effective ways to integrate delivery of ads across all platforms into their existing workflows, making it simple to enable ads, no matter the platform, as well as ensuring these can be effectively targeted to improve engagement. “
“Essentially, the industry needs to get better at collecting and actioning data,” says Accedo’s Alex Wilkinson. “AI and data-driven design can identify how consumers engage with certain types of ads or content to enable video service providers to better target them with appropriate ads.”
“One of the biggest barriers to AVOD is establishing legitimacy in the eyes of brands,” adds Conviva’s Sam Jenning. “If someone launches a digital-only business, they don’t have a history of demographic measurement, brand lift studies, or upfront presentations that can be used to land large advertising budgets. Independent AVODs have to generate the research and integrate measurement, like Conviva, in order to tell these stories. Another path for AVODs is to partner with established media companies, gaining legitimacy via the parent company’s ad sales while they build up this history.”
Is programmatic advertising the answer – or at least part of it?
Not yet – according to Sam Jenning. “Programmatic is still incompatible with long-form video due to inability to manage frequency and separate competing brands. On top of this, buyers remain wary of Server-Side Ad Insertion (SSAI), where requests may be spoofed and legacy measurement doesn’t work. Sellers need to stop accepting low CPMs and unpredictable fill rates, both of which are a spiral that drag down revenue and user experience.
“Looking to the future, for programmatic to work properly there will need to be mechanics which create trust, like third party granular ad verification, as well as greater adoption of solutions for long-from like PG, multi-bid, and pod-based ad request/response. Media companies need to make media matter again. Programmatic treats content as incidental, and that has to change,” Jenning warns.
Arvato’s Ben Davenport also sees limitations – but sees programmatic as useful in some cases. “Even where programmatic has been embraced and is in production, it is often only used for secondary or niche channels or off-peak programming. Advertisers and agencies know their targets, and in many markets will still insist on picking specific spots. It’s unlikely this will change for peak programming on primary channels, but we’ve been able to help our customers encourage agencies to utilize programmatic advertising by including an agency portal with our solution. This solution gives the agency direct access to define audience segments and target reach and frequency, as well as the campaign results, thereby enabling them to quickly see the benefits for them and their customers and doing so in way in which they’re familiar from digital advertising.”
Craig Buckland at Broadcast Traffic Systems notes that “The main challenge comes down to the complexity of programmatic advertising. In many cases, broadcasters are not setup to handle a mix of digital and linear ads which means that it becomes a very manual and laborious process. With our recently launched ad module, we are aiming to make it simple for broadcasters to deliver and monitor an integrated ad campaign for their customers.”
Is ad blocking still a challenge to monetizing?
Of course it’s no good basing your business model on advertising revenues if those ads are just going to get blocked at the consumer’s end. Craig Buckland adds: “Ad blocking remains a challenge, however there is evidence that consumers are turning towards ad-funded services in order to get premium content without the cost. According to Digital TV Research, for example, North American revenue from ad-support streaming platforms will nearly triple in five years. At the same time, targeted advertising makes consumers much more engaged with those ads and less likely to skip or block them.”
Conviva’s Sam Jenning also acknowledges that “Ad blocking is still a challenge, especially on mobile devices, desktop web, and by extension, SFV and news publishers. On VOD content, where viewers actively initiate a video, there is a higher tolerance for ads, but even so, Conviva measures 40 -70% of ad attempts are blocked on these devices. Server-Side Ad Insertion
(SSAI) technologies can potentially get around ad blocking, and more publishers are moving towards it even though ad blockers still impact ad measurement for SSAIs. The big picture answer is to move away from a mindset of maximizing video and ad metrics at the expense of user experience.”
And what about piracy?
Even the most perfect monetization efforts are wasted if consumers can simply access pirated content instead. Alan Ogilvie at Friend MTS lays out the stark facts: “When copyrighted content is redistributed without authorization on a large-scale, content piracy impacts customers, erodes brand and strips the bottom line of media and entertainment businesses around the world. The scale and financial implications of piracy today are well illustrated by individual cases. For example, one case of a piracy operation, Omniverse One World Television, was shut down in 2019 and agreed to pay a $50 Million settlement. In 2018 SetTV paid damages of more than$90 Million.
“These pirate subscription services not only steal content from legitimate providers, they steal their subscribers. For example, a survey conducted by YouGov highlighted the detrimental effect: ‘of the 28% of consumers who purchased a TV box used to stream pirated television and video content, half stated that they had cancelled all or some of their subscription to legal Pay-TV services’,” Ogilvie says.
So what can the industry do about it? “In terms of exact piracy related numbers and patterns, Friend MTS’ clients have access to comprehensive and detailed piracy consumption reports reflecting geography and volume of the problem these companies face,” Ogilvie says. “This comprehensive data is based on millions of videos captured and analyzed every day by Friend MTS’ highly scalable automated Global Monitoring Platform for detection of illicit content distributed via websites, social media, apps, etc. including paywalled sources. With the best interest of our clients in mind, we don’t disclose the proprietary figures but our steady and growing customer base of content owners and distributors across the globe proves that we are doing something right here and our clients’ investment pays off.
Commercial piracy the biggest threat
“When most people think of piracy they tend to think about torrents and file lockers. However, these are dwarfed by large-scale, commercial piracy when it comes to inflicting financial damages on legitimate content owners and distributors,” Ogilvie continues.
“Being the biggest threat in this respect, commercial piracy is constantly evolving, becoming ever more sophisticated and better organized. Pirate services today are legitimate looking, subscription-based offerings with thought-through business models and professional sales and marketing. They offer a wide selection of channels and content pieces not restricted by any content rights agreements and sold at a much lower price. Indeed, this piracy is big business and there is every incentive there for those who profit from content theft to invest in developing and securing it.
“Thus, a significantly increased level of technical complexity and targeted anti-piracy measures is required to defeat commercial piracy. For legitimate content owners and distributors Friend MTS’ comprehensive, scalable, technology-driven anti-piracy services directly address this menace. There will always be some tech savvy individuals that will find a way to consume content without paying for it but we are talking about getting back your average paying consumers once a pirate subscription service is shut down,” Ogilvie concludes.
What role is AI/ML in improving monetization today?
“In the shorter term, at least, AI/ML stands to make a far bigger difference at the Monetization end of the content chain than in creation or production,” says Ben Davenport at Arvato Systems. “For subscription services, recommendation engines use AI to track view behavior and make better recommendations, ensuring better subscriber retention. TV remains the most effective medium for advertising, however, currently, the typical efficiency of most advertising campaigns still offers much scope to reduce waste. AI offers several opportunities to optimize reach, frequency and increase both the efficiency and effectiveness. One of the areas we’re already seeing the successful application of AI/ML is in ratings prediction (for which we won a BaM Award® in 2019).
Accurately predicting ratings is crucial as a broadcaster to maximizing the value of your inventory, so to be able to more frequently and accurately generate predictions has had a direct and positive impact on revenues.”
Best yet to come
Alex Wilkinson at Accedo sees plenty of scope to further tap AI. “Technologies such as AI and machine learning are already being used by providers to identify trends, but many are still not utilizing them to the best effect. By analyzing how OTT customers interact with services, you can better identify trends in use and, perhaps more importantly, identify risk of churn. This insight has to be turned into action as soon as possible by, for example, adapting the user experience or conducting marketing outreach to encourage those at risk of churn to remain subscribed. In the future, video providers will rely on AI and machine learning even more to keep consumers engaged and happy. These technologies will help with providing content and ads that feel relevant to each individual customer, as well as adapting the user experience depending on trends and usage.”
Craig Buckland at Broadcast Traffic Systems also sees plenty of room for development, particularly in making advertising more relevant. “Artificial Intelligence and Machine Learning are already being used to build profiles of the consumer in order to be able to target the right types of ads to the right types of people. In the future, I expect this to get even more sophisticated and make even better choices about what a particular consumer would find interesting.”
Conviva’s Sam Jenning agrees, but acknowledges there are hurdles to be overcome to fully leverage AI’s power.
“Today, AI/ML has been improving monetization by playing a key role in ad decisioning systems for both digital ads and social content by allowing publishers to understand what content resonates with their audiences. Understanding what content resonates with an audience and when it resonates most is important for publishers because it helps them to create more engaging content and improve social monetization. While the algorithms are available, viewer data privacy and general lack of data still holds back a wider adoption of ad decisioning for digital ads.”
Efficiencies + insights = better monetization
Veritone is betting heavily on the power of AI/ML in its solutions. Says David Candler: “Using AI/ML to create efficiencies in media workflows and unlock actionable insights into content ultimately enables improvements in monetization. With capabilities such as language detection, translation, transcription, object detection, face detection, identification and much more – aiWARE imitates human behavior while recognizing and analyzing patterns. It processes information faster and at higher volumes than the human brain – all to help boost revenue and efficiency. In the M&E industry, we can help to improve monetization by automating and simplifying content accessibility, searchability, distribution and analysis. This allows organizations to discover content in new ways, to drive operational efficiencies, and generate new revenue streams.
“We believe that aiWARE’s extensive integrated AI and ML capabilities will set us apart going forward,” Candler asserts. “Intelligence to analyze, manage, and monetize media assets will be increasingly important for the market. Veritone’s applications and services help the world’s leading media companies – including broadcasters, studios, networks, and sports federations – unlock hidden revenue streams trapped in their content as well as gain operational efficiencies in their daily operations. As we continue to focus on this technology, we will be a highly compelling technical partner for anyone wanting to utilize and monetize their valuable content.”