-->
Save your FREE seat for Streaming Media Connect in February. Register Now!

How Real-Time Data is Overhauling the OTT Space

Article Featured Image

Now that entertainment is an Internet-delivered product, most people are consuming that entertainment with a logged-in identity, as opposed to the longtime model of mass media, in which individual consumers were anonymous.

Providers now have a longitudinal record of consumption from those login identities. This generates powerful data about content engagement, offering a far more accurate and detailed view of the actual value of that content.

Content strategies are now data-driven rather than based on industry rubric, relationships or gut feel. Projections, negotiations and acquisitions all become simpler and more productive as a result. 

In fact, the role of data in the OTT space is being defined in real time. Information has enabled performance-based pricing models that establish risk sharing between exhibitor and seller. Data can identify content that would help a service attract new subscriptions or retain existing subscribers, based on insights into users’ viewing habits.

The trend in this new age of data-driven content acquisition is that most  VOD/FAST platforms no longer pay studios and producers a single flat fee for content, but instead sign performance deals with or without a Minimum Guarantee. This means that the Seller will know the minimum they will receive from the transaction, with an upside.  based on metrics such as minutes streamed or number of people who watched or percentage share of ad revenue. 

This pricing model moves the conversation away from Buyer and Seller haggling as to the value of the content — upfront before the deal is done — to one where the audience decides. Good content will pull a bigger audience and hence generate more value. And that value flows back to the makers of the content.

Content succeeds or fails based on its own merits, rather than the whims or biased projections of powerful industry insiders. The perceived value of content is no longer determined solely by the power of a buyer vs the seller, but instead – rightfully – by the demand of consumers. At the end of the day, the inescapable reality is that it does not matter what buyers and sellers believe the right price for content should be, the only opinion that matters is that of the audience. If they don't want to watch it, then it does not matter what the production budget was, or who is in it.

Like many industries before it, this industry is pivoting to understand the value of this data and having direct relationships with the end consumer. 

In an ideal world this would span from an individual watching a film in theatre to watching at home to give a complete picture of that person’s consumption preferences. 

In a world where tentpole films have promotion budgets in the same range to their production budgets, having the data to move the needle just a few % in terms of converting promotional spend to revenue will have a major impact on the bottom line. 

For smaller budget films, the ability to more precisely target based on a historical preference will mean that the slimmer A&P budgets of Indie films are much more effective and will highlight who is likely to watch the film in theatre and who prefers to watch it at home and can be offered the appropriate option. 

For that reason, expect the industry to further embrace data as more normative databases are created and better understood. In other spaces, such as CPG and pharma, we’ve already witnessed the value of anonymized databases and the benefits they’ve created for those industries on the whole. We hope the same becomes true for the entertainment industry, sooner rather than later.

Streaming Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

The Need for Root-Cause Analysis, Error Correlation, and Multipoint Monitoring in Streaming Video

Anupama Anantharaman of Interra Systems discusses the reasons for the lack of adequate implementation of root-cause analysis, the challenges this poses for QC and monitoring solution providers, how these challenges can be met with multipoint monitoring, and the consequences streaming providers face when they don't deliver high-quality content.

Data Will Guide Media Execs Through Economic Uncertainty

Mark Moeder, CEO of SymphonyAI Media, discusses why a "wait and see" approach is a toxic combination for media executives sitting on troves of data.

CTV Represents the Best Opportunity to Get Privacy Right

Jason Bier, General Counsel and Chief Privacy Officer, Adstra, looks at how CTV's massive growth is happening at the same time Congress will likely turn its attention to federal privacy legislation and posits that this makes CTV the perfect test case for the ad industry to develop and build a channel that appeals to marketers and also has strict, clear privacy guidelines

How Disney Streaming Approaches OTT Personalization

Disney Streaming VP Product Dave Lankford discusses how Disney tailors the OTT consumer experience to the individual user with attention to both content curation and specific UX elements and stresses the value of experimentation in this clip from Streaming Media Connect 2021.

How to Better Monetize Video Advertising: First-Party Data Is King

With new policies from Apple and Google giving more control to consumers, advertisers need to turn away from third-party data to build user profiles

How Big Data Can Save the Big Screen

The COVID-19 pandemic changed the business of cinema forever. Studios that use data to adapt to a new world of windowing for VOD and EST strategies will thrive.

HBO's Best Practices for OTT Personalization

HBO's Sarah Lyons explains how HBO approaches algorithm-driven recommendations and human curation in personalization on the HBO Max OTT channel in this clip from a panel at Streaming Media West Connect 2020.