What is content valuation?
Content valuation is the process of treating each piece of content as a financial asset and calculating its real-time market value. Data-driven content valuation empowers media and entertainment companies to invest, acquire, and promote with greater efficacy.
Why content valuation is important for media companies
Competition and spending among video entertainment services have exploded in recent years making successful content valuation increasingly important for content sellers and distribution platforms. The media and entertainment industry expects to spend an astonishing $230 billion on TV shows, films, and other digital content in 2022. Disney expects to spend $33 billion, mostly on content for Disney+, Hulu, and ESPN+, while HBO expects to spend $18 billion. Netflix, the largest subscription video-on-demand (SVOD) service, expects to spend $17 billion.
Content valuation drives successful strategies for content creation and content acquisition – the purchase of new content to distribute to audiences. With high costs for content and countless options, companies must be intentional about content acquisitions in order to optimize budgets and create new revenue streams. Companies that practice precise and effective content valuation enjoy a competitive advantage, getting the best ROI for each individual content asset they create, own, or distribute.
Content valuation and media sellers
Content sellers can leverage content valuation to assess, and maximize, the value of each content asset in their portfolio, title by title. In today’s landscape of increasing competition, it is critical for content sellers to understand whether they are fully capturing demand for their content assets and to identify new opportunities in the market. Companies that can pinpoint the true market value of each title they own can make informed decisions and select the most favorable licensing and distribution deals.
Content valuation and distribution platforms
For distribution platforms, content valuation is critical to creating and managing a content library that fuels the acquisition of new customers, retention of existing customers, and prevention of churn. At the same time, successfully monetizing and selecting content empowers streaming platforms to offer positive customer experiences, leverage opportunities for up-selling and cross-selling, and generate advertising revenues. Content valuation best practices can help teams optimize content strategy (e.g. production, licensing, distribution), forecast demand, and make smart investments.
The top factors affecting content valuation
Content valuation helps content sellers and distributors understand how viewers will perceive the value of their content offerings. It’s no small feat to translate potential customer perceptions into actual dollars, and too often, content valuation is guesswork. In fact, one in three media organizations does not know the profitability of the content in which they’ve invested, according to our worldwide survey of media executives.
The value of a title in a content portfolio can fluctuate dramatically depending on audience demand and other market forces. While box office ratings or more sophisticated tools like social media listening serve as good starting points to valuate content, they do not provide the full picture of a content asset’s worth. To successfully assess content value, stakeholders must break down the growing amount of big data – audience data, financial data, and content data – analyzing viewer demographic and behavioral characteristics, licensing and profit-sharing reports, engagement metrics by genre, platform, or device, and more. Effective content valuation involves understanding revenue by title, series, genre, distributor, time period, audience segment, promotion, region, and event. Moreover, these metrics need to be considered in regard to the latest industry trends.
Big data from multiple platforms generate content valuation insight into questions such as: Which shows are value drivers and which shows should only be part of a bundle? How much does a show contribute to the prevention of churn? Which shows generate attention and drive new customer acquisition? By understanding big data related to content valuation, companies can develop actionable insights to hone content strategy and optimize their business model.
How content valuation has changed over time
As the sheer amount of data available continues to grow, some companies have started using complex algorithms to make use of the information, while others remain dependent on time-consuming manual processes. Slow and tedious processes with data siloed in different systems and departments prevent companies from conducting accurate content valuations.
Today, data-driven artificial intelligence software drives competitive differentiation in the media and entertainment industry. Enterprise AI solutions can aggregate and analyze large volumes of content-related data across multiple platforms and data sets to precisely valuate content and enable timely, informed decisions.
Tools that help media companies with content valuation
Built for media and entertainment companies, SymphonyAI Media’s Revedia platform transforms content valuation into a data-driven science. Revedia uses trained AI to automatically assess the revenue potential of content assets, forecast audience demand, and better optimize spend.