by shalu wasu |
All the content that is produced around the world garners revenue mainly through the following three ways : 1The projected US $ 520-billion advertising spends . 2The declining pay-TV subscription revenue valued at around US $ 202 billion . 3The increasing over-the-top ( OTT ) subscription revenue estimated at US $ 46 billion .
There is a lot at stake , and a lot worth fighting for . As we know only too well , this space is in a flux , and battles are being waged for this revenue across multiple fronts . The popular way to describe these battles is along the following lines .
Let ’ s take a closer look to see where things are .
Traditional pay-TV vs OTT and streaming
This is not really that much of a battle , but more of a transition . Delivering content via OTT is easier , more flexible and faster . At the same time , the infrastructure for traditional TV is already in place and , therefore , it is still cheaper to deliver content wherever that infrastructure is at present .
Having said that , making further investments in pay-TV technologies and infrastructures is similar to making new investments in the news paper business . Even the few remaining profitable traditional publishers are reluctant to make more investments in that business .
So , while pay-TV will be around for a long time , its revenues and penetration will keep falling . Some countries that have not had a big pay-TV market , such as Indonesia and Myanmar , may completely leapfrog straight to streaming .
While traditional cable operators and TV companies are still standing strong in most markets , they will get replaced by online streaming providers like Netflix , and aggregators like Hulu and YouTube TV .
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Hence , OTT and streaming will emerge as the winner .
Linear streams vs video-ondemand ( VoD )
For a long time now , consumers have been consuming most of their content in the form of linear streams on TV . This is a habit that could go away quickly ! It is like in the early days when news papers went online , and users still wanted to ‘ flip pages ’ in the PDF versions . However , no one does that anymore .
The verdict ? VoD will win very quickly , except in the news and live sports categories , where linear streams may still appeal to viewers .
The advertising-led model vs paid content
This is one of the most interesting battles and the one where most is at stake . It ’ s a global battle : The battle
1 for advertising and subscription dollars is shifting from local and regional channels , broadcasters and aggregators fighting among each other , to the likes of a handful of global players such as Facebook , Google and Netflix , as well as some regional players like iflix and HOOQ in Asia . It ’ s Facebook vs Netflix : In2 one corner are Facebook and YouTube , the new ‘ free-to-air ’ ( FTA ) channels of the world . Their content is ‘ free ’, and they monetise through ads . On the other corner are the premium ads-free providers — led by Netflix , and also include Amazon Prime Video , Hulu and Spotify . 3Premium model earns more per hour of content consumed : Facebook is one of the most effective ad supported publishers , and it makes around US $ 0.07 per hour of eyeballs . For instance , if there are two billion Facebook users using the platform an hour a day , Facebook earns around US $ 12 billion per quarter . Netflix , on the other hand , earns around US $ 0.20 per hour of content consumed , and has more headroom to grow . 4Content needs to be ‘ free ’ for the ad-based model to work : |
The ad-based model is able to cover the cost of operations only when the content is free , and is created by users . Examples of user-generated content platforms are Facebook , Instagram and Twitter . 5Content needs to be ‘ ad-free and premium ’ for the subscription model to work : Consumers are willing to pay a subscription fee only when there are no ads and there is premium content that is well-produced . 6Consumers do not like ads :About 200 million consumers globally subscribe to subscription services such as Netflix and Amazon Prime Video . Although an increasing number of consumers are willing to pay for an ad-free experience , over 700 millions devices around the world have ad blockers installed . 7Facebook Watch has been a damp squib so far : Facebook Watch , while still in its early days , is not being positioned as an ‘ ad-supported version of Netflix ’, but as another version of YouTube . This , in my opinion , is a wasted opportunity , and I will not be surprised if it evolves into a premium and standalone Netflix-like service . 8Tough times ahead for all other content creators : Other than the top five free publishers and the top five premium publishers , all other |
❝ While traditional cable operators and TV companies are still standing strong in most markets , they will get replaced by online streaming providers like Netflix , and aggregators like Hulu and YouTube TV .❞
content creators who are not niche do not have enough volume , and who are not ‘ special ’ will struggle to monetise content — both through advertising and through subscriptions .
The winners will be the top five publishers in each category , with Netflix and Facebook the big winners . While sports content consumption is being impacted by many of the above changes , the one thing that makes it different is that , for the majority of the time , sports is consumed live .
At Eleven Sports , we are navigating through the changes above , and are continuing to expand at a breakneck pace around the world by using the following mantras :
■ Our content is available across multiple platforms — pay-TV , FTA , streaming as well as our own OTT service .
■ We have moved quickly into streaming with our linear channels , and are now preparing to launch an eventbased platform .
■ We rely on multiple revenue streams , including subscriptions and sponsorships — although we lean towards subscription .
Shalu Wasu is managing director of Eleven Sports Network , and an APB panellist .
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To make the subscription model work , content has to be premium , original or exclusive , says Eleven Sports Network . |
Louis Boswell CEO CASBAA |
Graham Stephens CTO Media City Development , Malaysia |
Goh Kim Soon Senior Vice-President Broadcast Engineering Mediacorp
Shad Hashmi
Vice-President , Digital Development , Global Markets & Operations , BBC Worldwide Asia
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