7 Revenue Management Strategies for Licensed Pay TV Content Distribution
BlogJun 21, 2022
Pay TV, also known as subscription television, is a content distribution model where viewers pay by subscription for access to video content presented in a linear format by a traditional multichannel television service. Traditional cable and satellite television services are both examples of subscription-based Pay TV.
For content owners licensing their assets for Pay TV distribution, the need to effectively manage revenue from traditional sources (e.g. traditional cable, satellite providers, and broadcasters) while adapting to the emergence of new distribution channels (e.g. FAST and vMVPDs) is leading to new challenges and complexity in the licensing revenue management process.
In particular, shifting consumer trends, complex royalty agreements, and poor distributor visibility have made it difficult for content owners who rely on legacy systems (often with disjointed workflows) to effectively aggregate and normalize historical data that can be used to better manage license agreements and optimize revenue.
Recognizing these challenges, we’ve created Revedia Linear: a SaaS solution that helps content owners streamline and automate the process of effective revenue management for linear distribution.
In this guide, we’re highlighting license fee management strategies for content owners. You’ll discover seven strategies for maximizing revenue from your content assets, plus how Revedia Linear can help.
1. Efficiently Manage and Organize Complex Data
The media distribution landscape has been significantly re-shaped by innovative digital technologies over the past two decades.
The shift to cloud computing, the declining cost of data storage and compute resources, and the emergence of new strategies for managing and analyzing big data have given rise to innovative distribution models, new media channels and platforms, and personalized strategies for marketing and customer retention.
But while distributors are embracing next-generation digital technologies, content owners have been slow to adopt innovative solutions to support their licensing and agreement management activities.
Content owners today – even the ones with hundreds of agreements across multiple MVPDs – are managing and organizing their data with inefficient legacy systems that depend on time-consuming manual data entry. Data from licensing agreements, subscriber trends, content performance data, and financial information come from different sources and usually live in separate, disconnected systems that don’t talk to each other. This makes it difficult to analyze the data and extract meaningful insights that can help drive business outcomes.
Revedia Linear allows content owners to programmatically ingest critical licensing data (e.g. rates, terms, pricing) and standardize diverse datasets without time-consuming and error-prone manual data entry.
Revedia Linear centralizes data by integrating with existing systems (e.g. internal BI tools and systems of record) via standard or custom APIs. Current integrations include NetSuite, Dell Boomi, Commscope BNC, and in the future will likely include SAP, Oracle GL, and Synamedia PNC. Revedia Linear’s software integrations empower content owners to centralize their critical data in a single location and leverage data-driven insights to support strategic revenue management.
2. Optimize Current Licensing Agreements
Managing licensing agreements is one of the most important ongoing tasks for content owners licensing their assets to Pay TV.
Content owners need to know when license agreements are set to expire, which agreements are coming up for renewal, and how much revenue could be at risk if they choose not to negotiate. They also need to know which MVPDs are over- or under-performing, and which agreements are driving the most revenue.
For content owners who depend on legacy technologies like PDFs and spreadsheets, managing licensing agreements at scale becomes a near-impossible task. A lack of visibility into contract terms and expiration dates makes it difficult to keep track of upcoming renewals, and the inability to efficiently compare and contrast agreements means that content owners can’t easily see which MVPDs are driving their financial performance.
Revedia Linear gives content owners the ability to securely manage, organize, search, and manage approvals for all of their licensing agreements. From a single interface, content owners can quickly identify which agreements are coming up for renewal and which agreements are delivering the most revenue.
Content owners also get the ability to dig deeper and compare the language within agreements to really understand why some agreements are performing better than others.
3. Automate Workflows for Managing Pay TV License Agreements
For content owners that manage license agreements using legacy systems, manual workflows are often disjointed, time-consuming, and inadequately controlled, leaving room for errors and oversight that lead to lost revenue.
Making changes to rates, term dates, or other agreement attributes generally requires executive approval. Content licensing teams routinely transmit approval requests through email, where busy executives may be slow to respond or miss the message entirely. This can result in long approval turnaround times, or improper agreement changes that can lead to incorrect billing and costly negative adjustments.
Even worse is when agreement changes are approved in person or over the phone, and where no physical record is generated that a change was approved.
Content owners can address these challenges with Revedia Linear’s automated workflow capabilities. With Revedia Linear, content owners can configure customized workflows for agreement approval and centralize the approval workflow, making it easy for executives to review and approve agreement changes in a timely fashion.
4. Streamline MVPD Royalty Calculations
Multichannel Video Programming Distributors (MVPDs) include both cable television and direct-broadcast satellite providers that license television media from content owners and distribute it to their subscribers.
Royalty and licensing agreements between MVPDs and content owners can vary significantly. Some content owners are paid a negotiated Cost Per Subscriber (CPS) based on the volume of subscribers the MVPD has, while other agreements can include revenue sharing, minimum guarantees, or flat fee payments. MVPDs may also want to negotiate paid extras, such as multi-screen or catch-up TV rights.
As royalty and licensing agreements grow in complexity, it becomes increasingly difficult and time-consuming for content owners to manually calculate MVPD royalties and verify that both remittances and incoming payments are made correctly.
Revedia Linear allows content owners to automate these time-consuming royalty calculations, eliminating the possibility for errors and streamlining the payment verification process to ensure that MVPDs are paying what they owe.
5. Negotiate the Most Favorable Deal Terms
Negotiating agreements with MVPDs challenges content owners to secure licensing terms that net them the most revenue. MVPDs often have the upper hand in these negotiations, leveraging their platform data and past experiences with content licensing to shift agreement terms in their favor.
When it’s time to negotiate or renew licensing agreements with MVPDs, there’s one competitive advantage that can help content owners get the best deal: their data.
This advantage comes at a high cost for content owners that rely on legacy systems and manual processes to track subscriber, content performance, and financial data, as well as agreement performance. In many cases, content owners entering these negotiations aren’t really sure which agreement terms or remuneration structure would be the most favorable. As a result, they end up leaving money on the table when negotiating with MVPDs.
Revedia Linear gives content owners the ability to programmatically ingest licensing data, as well as capture and aggregate data on content performance, audits, and subscriber trends. Armed with high-quality data, and without the added burden of manual data input, content owners have a much better chance of negotiating favorable licensing deals that maximize the value of their content assets.
6. Make the Most of Distributor Audits
Content owners frequently negotiate rights to audit their distributor partners and ensure that royalty or licensing payments are complete and accurate with respect to the stated contract terms.
But managing distributor audits can be a challenge, especially when content owners need to keep track of audit claim timeframes, keep track of historical audit data, and keep watch for payment anomalies that could indicate a possible discrepancy.
Revedia Linear provides a complete solution for managing distributor audits, empowering content owners with payment anomaly detection, a centralized storage point for historical audit data, and a single source of truth for managing the audit claims window for all distribution agreements. Audit management tools make it easier for content owners to find discrepancies, initiate claims, and collect the full revenue they’re owed from distributors.
7. Streamline Reporting and Forecasting
Reporting and revenue forecasting are time-consuming and heavily manual processes for content owners who rely on legacy systems and manual data entry. Reports on billing, actual revenue received, billing adjustments, agreement details, and other factors are generated ad hoc, and reporting teams may need to pull data from multiple sources to formulate a report.
With Revedia Linear, content owners see their agreement data, financials, and customer data centralized in a single location. With these essential data points present and organized in a single system, reports that used to take hours or days to compile can now be prepared automatically with just a few clicks.
Revedia Linear offers both executive-level dashboards and detailed custom reports that can illuminate every aspect of your business, from distributor compliance and revenue performance to customer trends and content popularity. Revedia eliminates the labor-intensive hassle of reporting and forecasting, leaving content owners with the information they need to implement revenue management strategies that maximize business outcomes.
Choosing the Right Solution for Licensed Revenue Management
As the media distribution landscape continues to evolve and grow in complexity, content owners need sophisticated software solutions that can replace legacy technologies and streamline the process of license fee management.
Revedia is that solution, providing purpose-built tools that allow content owners to centralize critical data, manage distribution audits and agreements, automate workflows and royalty calculations, streamline reporting, and gain the upper hand in negotiations and renewals.