Monetization Matters: Why Player Syndication Is The Right Move for Major Programmers
With all the talk of broadband replacing television, there is a question I keep asking myself. What is television: "content" or "delivery"? I do know that television started as over-the-air broadcast, then became cable, and is now split between cable and satellite. TV video has seen three delivery methods over 30 years, but has always been classified simply as "television." This leads me to believe that the compelling content made popular by television remains independent of its delivery in the minds of millions of consumers, and broadband is really just the next "delivery method" for this video content.
Having recently seen a demonstration of wireless video connectivity from a PC to a flat panel monitor, I realized that video's delivery method is going to be redefined quickly as more consumers reduce cable and satellite expenditures for increased broadband capability. Great story-telling, which has gone on for thousand of years, will continue to be what consumers demand most, regardless of delivery method. Here are the stats to prove it:
According to a spring survey by Integrated Media Measurement Inc, 20% of consumers are now watching first-run episodic content delivered via broadband, while 90% of prime-time broadcaster shows are available via broadband delivery (Forrester Research). Ninety-six percent of monetized, broadband-delivered video will be network and professional content (Diffusion Group TDG). In fact, CPMs for television content delivered via broadband are garnering television advertising rates. Television as we know it isn't changing; the delivery method is.
But broadband as the new "delivery method" does have risks for networks and broadcasters. If networks allow their digital video to be syndicated without ultimate control of the content, they eliminate their ability to monetize. Monetization is what matters most; without the ability to show positive returns on investments, the broadband video story-telling business will go away, and fast. Networks and broadcasters have to eliminate monetization risks as broadband delivery of video becomes typical.
The solution for networks, broadcasters and studios is to syndicate content vis-à-vis syndicating their video players. Distribution of a video publisher's branded video player coupled with their content management and DRM solutions puts them in control of their brand, digital video, viewing rights, and ability to sell advertising against their content.
If great story-telling is what matters most to consumers, then it seems that the networks have more opportunity in broadband than they did in cable. Why? Networks can syndicate their player or drive consumers back to their Web sites. And if networks and broadcasters can drive consumers back to their sites, they have the ability to dictate revenue splits when syndicating their video players. Networks never had this in cable! Yes, I am saying that if networks and broadcasters understand syndication risks and opportunities, and formulate the right approach toward broadband-delivered television, they may have the ability to greatly expand their monetization options with broadband more than they ever have had with cable. And, after all -- monetization is what matters most.