Content May Be King, But Platform is the Kingdom
The entertainment world has always understood that content is king. Since the days of silent films, the notion that quality is the primary factor of success has stood firm. It is hard to argue against this paradigm; a content owner’s goal is to profit, revenue is dependent on viewership, and consumers only view things that interest them. It stands to reason then that producing compelling content to maximize viewership is what matters most. Content is key because it is the primary reason audiences tune in, but it is not the only component in generating revenue for content owners. Where viewers consume content is nearly, and sometime equally, as important in determining revenue and who takes the largest cut. However, until now distribution has been largely ignored by content owners for good reason; they had no means to do it themselves.
Winning at OTT takes more than just good content.
Owning the destination that viewers tune into, the means of distribution, was once out of the reach of content owners; unobtainable as it required the infrastructure to run a global cable outfit or the tech to offer content over-the-top via a seamless UI/UX portal. This meant that although content owners were providing a key ingredient in drawing audiences and revenue, they were reliant on cable and OTT hubs like Netflix to deliver the content and facilitate monetization. Inevitably this meant splitting the revenue, rarely in the content owners favor. Now however, the barriers of entry have diminished to the point that it is possible for content owners, the kings, to also own the kingdom, the platform, keeping 100% of the glory and profits by distributing on owned-and-operated end-points — a model that puts the obligations of marketing, monetization and technology squarely on the shoulders of content owners, but also puts the lion’s share of the profits in their pocket.
“Content is the king maker, it’s not the king. The king is the platform. HBO is the king. Netflix is the king. Spotify is the king. You can not win without owning distribution.” –Jeff Katzenberg, former Walt Disney Chairman.
Although Katzenberg’s metaphor is bit more on the nose than ours, the point is the same. Owning distribution is where the power lies. Content may not be a commodity, but it is only a component in the system that maximizes the value a video can provide to an entertainment driven business. By distributing themselves, content owners take complete control over the experience for users, the data gathered, and the ability to monetize appropriately. All without losing the majority of revenue to a middle-man.
This of course is exactly what Disney understood when they made the decision to jump the Netflix ship and launch their own branded OTT video streaming service. The benefits for them, as highlighted in a previous Unreel.me Blog post, are plenty:
“Disney is set to enjoy all of the advantages in which the other major streaming services have indulged in for years. The primary gain is pure profit. The SVOD re-occurring monthly payment model is a lucrative one and the revenue will all go directly into Disney’s pocket. The other advantage is that Disney now owns the audience watching their content on OTT. They will be able to recommend to them what Disney wants to be seen, show them ads and promotions for the products and experiences they want to push, and target them via email however they choose. The other side to owning their audience is Big Data. The immense amount of information Disney will collect about its fans is invaluable. To have a profile of the demo and psychographics around each subscriber, and to understand how they engage with content, will guide content creation and marketing for Mickey and crew for years to come.”
The Costs of your own Platform.
Disney was able to make such a dramatic move because they found a company that had already developed a platform, and bought them. Majority share in that company, BAMTech, cost Disney, 2.58 billion dollars. For most networks, publishers and content creators, that number is unrealistic. A much more palatable solution is to find a tech partner, like Unreel, that, similarly to BAMTech, has a fully built out OTT platform. What makes Unreel unique is that our model has no upfront development costs, making the relationship with the networks and publishers with whom we work a true partnership. We share in the their success, so it is vital that we arm them with the technology to win at OTT. We do so with three unique patents around the data we gather, our UI/UX and our video player.
You may be a media King with a wealth of quality content, but what good is that if you do not have a kingdom to rule over?