Content Valuation Is Key to ROI. How Can Artificial Intelligence Help Content Acquisition Executives?

BLOGJun 08, 2021

Andrew Thompson

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Content valuation is becoming a best practice for content licensors and streaming video platforms. In a webinar hosted by Symphony MediaAI and IABM, experts discussed how artificial intelligence (AI) and machine learning (ML) enable content acquisition executives to properly valuate content. In this post, we share key takeaways from that discussion. View the full webinar on demand here.

The OTT market has exploded over the last 10 years and in many territories, OTT platforms are increasingly becoming the main choice of video consumption for consumers.

The increased demand for content to fill catalogues and tentpole shows to keep consumers engaged has driven up the cost of media production and licensing. In 2019, media and entertainment companies spent over $120 billion on original content. Content availability and price sensitivity are the key factors that determine whether a subscriber will stay or leave a platform, as they evaluate the cost versus perceived value from their subscriptions.

In this current landscape, “content valuation” is becoming 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. Content creation and acquisition executives can use AI to determine what film and TV content to create and/or acquire and measure real-time performance to maintain their competitive advantage, profitability, and budgets.

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 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.

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..

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. AI software ensures that media and entertainment executives are on the pulse of the latest trends, thereby reducing risk of subscriber churn and allowing them to greenlight TV and film series quicker and with greater confidence it will be a success.

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.

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 uncover insights such as “Can we generate more revenue by subtitling for global distribution or create a new series targeting domestic audiences?” AI can further analyze current and forecasted audience demand to determine whether there is over investment 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 understand how the viewers they have, and want, will perceive the value of their content offerings.

AI allows content executives to optimize the full potential of their assets and make smart, well-informed, fine-tuned content acquisition decisions to drive revenue growth.