We Live in Interesting (TV) Times

Changing TV monetization

It used to be a simple. TV shows were produced by a set of studios. Then, media was then broadcast by a set of national and international big name broadcasters, and consumed by viewers according to a simple program schedule in set top boxes. To monetize, you included ad-breaks in the show. Most importantly, the success of a show (and the ad-break inventory price) was set by a single agency, Nielsen, who actually surveyed homes for viewing habits. Nielsen dominated the ratings (and resultant monetization) for over half a century.
Today, the line between producers and publishers has been erased as Netflix and Amazon are now producing their own content. Consumers are no longer subject to the vagaries of the program schedule and can “catchup” or even binge on a whole season in one go. There is an ecosystem of viewing devices, to match every human TV-watching habit—from  mobile devices for “on to go” to tools like Slingbox for casting remotely to the traditional 10-foot screen. There is a complementary ecosystem of broadcasters for an equally diverse set of use cases. Some focus on original or exclusive content, some on distributing others’ content, some on a mix. Some broadcast content for a specific region or demographic, such as Israeli TV programs on the west coast of the US or Safe Kids content.
With these myriad and complex ways to consume content, how do you monetize content? How do you recognize and set the price for an ad-break? How do you keep viewers engaged in a subscription service? And how do you keep the cruel master of increasing ARPU in check?
At Kaltura, we realize that the old system of “one size fits all” does not apply anymore. Monetization needs to fit the use case, or the audience, or the region. In some cases, personalizing content so that pay-per-view (TVOD) content that is likely to interest the viewer the key to success. Sometimes, download for viewing offline and owning content is the relevant approach. Discovery optimization and social tools are another way to increase engagement. Hybrid monetization schemas are also an option that should be considered, in which some content is subscription/premium, some free and ad supported, and even include some pay-per-view content. Analytics and measurements of user behavior which are tailored to specific needs allows for continuously improving which content is available, as well as the experience of the end user.
To succeed in TV today, the most crucial element is flexibility. The market has changed quickly; it will continue to evolve just as quickly. Choosing the right tools to adapt to those changes will be the difference between a healthy future TV business, and being left in the dustbin of history.

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