Over the last 10 years, the OTT market has exploded. In fact, in many territories, OTT platforms are increasingly becoming the first-choice medium of video consumption for consumers. For media and entertainment companies, that means it’s time to refine and maximize content acquisition strategies.
The changing face of content acquisition in media and entertainment
The continued rise of over-the-top (OTT) media services creates a challenging landscape for content teams. Content acquisition – the purchase of content to distribute to audiences – has always been a delicate balance of weighing costs against audience desires. But the increased demand for content to fill catalogues and tentpole shows to keep consumers engaged has consistently driven up the cost of media production and licensing.
Though the cost is high, it’s clear that when it’s done right, the reward for successful content acquisition strategies is high. Consider Netflix’s purchase of the Roald Dahl estate in September 2021; though the cost was undisclosed, it is reportedly the largest IP acquisition in Netflix history – positioning Netflix to compete with Disney+ for viewers seeking family-friendly content.
Netflix’s savvy strategy of acquired and original content galvanizes its position as the SVOD market leader; at the 2021 Emmys, Netflix scored a whopping 44 awards, making it the most decorated streaming platform in the event’s history. The Oscars told a similar story. It’s no coincidence that streaming platforms like Netflix, AppleTV+, Amazon Prime Video, and HBO Max are winning more and more frequently at awards shows – they know how important it is to create exceptional content strategies.
When it comes to deciding whether to leave a platform, nothing is more important to subscribers than content availability and price. If the perceived value of the content offered by a streaming service doesn’t outweigh the subscriber’s price sensitivity, they’re unlikely to continue that subscription. Content owners and streaming platforms need understand this fundamental calculation if they hope to successfully monetize OTT content.
What is content valuation?
In this current media landscape, “content valuation” is the apparent answer to the challenges of content acquisition, and it comes as no surprise that this practice has become increasingly important to TV and film providers.
But what is content valuation? Simply put, content valuation is the practice of treating every title in your library as a financial asset so you can maximize your portfolio, or content library.
To practice content valuation effectively, media and entertainment teams need sophisticated tools to track content, measure performance, and even predict the content their audiences want to see next—that’s where artificial intelligence comes in. Content creation and acquisition executives can use AI to determine what film and TV content to create and/or acquire. They can also measure real-time performance to maintain their competitive advantage, profitability, and budgets.
Organizations licensing their content can also leverage content valuation to assess, and maximize, the value of the libraries they monetize.
How to leverage artificial intelligence to measure content performance
The value of any title in a content library can vacillate wildly depending on audience demand and other market forces. Recent economic uncertainty and production delays are forcing TV and film studios to rethink content ROI. Executives are increasingly licensing back catalogues, identifying new audiences, and attempting to more accurately project demand to manage production and promotion budgets.
It has never been more important for executives to select the right content in a timely fashion based on continuous intelligence and real-time data strategy. Organizations that properly aggregate and analyze data to do so are enjoying a competitive advantage.
- Use AI to measure content performance, title-by-title
How? AI software helps normalize the sheer volume of data to measure performance on a title-by-title basis across multiple platforms and data sets. It allows executives to see what type of content is working and underperforming but also identify the root cause of content performance – whether this be inaccurate demographic targets, promotional timing, or even device incompatibility. This insight gives stakeholders visibility into how content performs in real time, so they can understand its potential and see more granular ROI for each title broken down by factors like genre, talent, director, and so on.
- Identify what content is working…and what’s not
AI and data analytics also allow content owners to uncover trends and recommendations to predict audience demand and potential revenue. This data can be used to drive deal negotiations and shape business strategy, by answering key acquisition questions such as what type of content should be licensed or distributed. Enterprise AI software ensures that media and entertainment executives are on the pulse of the latest trends, thereby reducing the risk of OTT subscriber churn. Superior software also allows content teams to greenlight TV and film series more quickly and with greater confidence.
Identify the root cause of content performance
The right AI software can help content teams drill down into precise audience trends, moving beyond the general evaluations that might have been considered enough to inform content acquisition strategies of the past. For example, in 2020, 21% of viewers preferred comedy, perhaps as an escape mechanism. That’s helpful information, but is it enough for providers to invest in acquiring or producing comedy titles writ large? AI can further segment by factors like location, age, and viewing history – so executives can map content to their particular user base and better optimize spend.
How to use AI data analytics to stay on top of OTT trends
It is also becoming increasingly important for content executives to understand whether they are fully capturing demand for existing titles and to identify new opportunities in the market. AI software helps to stay on top of OTT trends by uncovering insights such as “Can we generate more revenue by subtitling for global distribution or create a new original series targeting domestic audiences?”
AI can further analyze current and forecasted audience demand to determine whether there is overinvestment in a genre or type of format such as miniseries, episodic or film. As many viewers return to physical offices and outdoor activities in the wake of-COVID 19, will they prefer short-form content in the evening or PVOD films over the weekend? The answer may not be the same for everyone, but executives need to be on top of the latest OTT trends to understand how the viewers they have, and want, will perceive the value of their content offerings.
Content creation and acquisition teams who leverage artificial intelligence understand their subscribers on a level heretofore unseen in media and entertainment, outpacing those who rely only on tools like social media listening. While the opportunities to get ahead of the competition are high for now, they’re unlikely to stay that way. The push to create more sophisticated content strategies is on, and before long, companies that can’t intelligently leverage their audience data are likely to fall behind. AI puts content teams on the fast track to bigger audiences and revenues, allowing media executives to optimize the full potential of their assets and make smart, well-informed, and fine-tuned content acquisition decisions that drive growth.
*This blog was updated and republished in August 2022.
