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Broadband Access
Industry View
Make your broadband video initiative profitable
Flexible plans and automation are keys to success
by Keith Kocho, ExtendMedia
Content owners and service providers around the globe — from North and South America, to Europe and Asia — are facing the same challenge: the need to look beyond the TV, Internet or mobile screen in isolation and give consumers easy access to high-quality video content across networks and devices.
In their never-ending quest to increase revenue, many telecom providers are turning to broadband video distribution to help monetize their digital media offerings while improving the experience for the end-user. Despite the explosive growth of Internet video distribution and consumption, the debate continues about the viability and revenue potential of digital video businesses. Yet, in the midst of this behavioral shift and distribution channel explosion, telecom providers of video services are struggling to manage the technology and business complexities of this nascent industry.
If you are a telecommunications operator looking to make Internet video a profit center, while lowering operational costs, follow four simple rules:
1. Unify the technology back-end of the video platform
2. Evaluate and implement numerous business models
3. Automate management, production and delivery processes
4. Turn reporting into strategic decision making
Unified content management
As the number and type of distribution outlets and digital video services increase, creating a unified process for managing and distributing digital video content becomes more complex. A primary challenge for service providers is the ability to transform and package one video archive across multiple viewing platforms. Few organizations efficiently do this, while most stay stuck with redundant manual processes. This leads to the incredibly inefficient duplication of effort across each stage of the content preparation process without allowing for a comprehensive view of how content is being managed, distributed and, more importantly — consumed.
Harmonizing the metadata associated with content sourced from multiple providers is a key challenge in deploying a unified video distribution platform. Metadata represents all of the potentially relevant data about the video asset. The challenges associated with metadata draw striking similarities to the inefficiencies in any content workflow. Metadata supports content discovery (search) for the consumer and can add significant richness to the consumer experience by providing related content like cover art, trailers, thumbnails and ratings.
Furthermore, metadata supports assets by providing a platform for categorization (e.g. by year, director or genre) and other means of organizing video offerings. However, content metadata varies widely in both what data is captured and what format it resides in. For example, a telecom provider and an online rental website will offer different metadata for the same asset, and often in varying formats. Therefore, metadata analysis is often both manual and labor intensive. Effective metadata should be harmonized to allow for efficient parsing.
Diversify your business models
One of the central challenges in increasing revenue today is the diversity of commercial outlets and economic models. Some distribution partners are based on an ad-supported model where they or someone else serves as the ad network. Others require pay-per-view or download terms, and innovators support multiple models including ad-supported, rentals, subscriptions and download-to-own. In short, any and all business models should be part of the discussion. A core digital media platform requirement is the ability to support commercial diversity and efficiently experiment with a variety of business models.
The lack of flexible processes around content packaging, pricing, bundling and advertising prohibits effective revenue generation. In many cases, revenue opportunities are missed because service operators are not able to support certain channels or business models. Openness to business model diversity is only the first step to overcome these challenges. Successful digital video businesses require a flexible broadband video infrastructure that includes:
• Multiple models: Support for ad-supported, download-to-own, rental, subscriptions, couponing, gifting and other means of monetizing the video service offering. It is no longer practical or economically advantageous to focus on a single business model. Users consume content across all models; a flexible infrastructure allows simple and inexpensive experimentation and adjustments.
• Flexible consumer plans: Unlimited pricing, packaging and bundling flexibility. Video assets are mere files on a hard drive until they are packaged as a product offering and made available to consumers. These video asset products may be bundled with other products, delivered as part of a subscription or provided for free on a promotional basis. As user feedback and revenue results come in, service operators will need to change these offerings on the fly.
• Value chain integration: Simple and robust integration capabilities with other value chain participants. For example, video delivery infrastructure should not prescribe a specific ad network, but rather offer more flexibility. Similarly, it should provide the ability to integrate with existing or best-in-class e-commerce and payment platforms.
Automate the workflow
Unified content management is not enough to create significant efficiencies by itself. Workflow and automation also play an essential role, especially for aggregators that package content from multiple sources and distribute through a variety of platforms. Video service automation takes several forms, but successful implementations include:
• Multiple ingestion points: Flexibility to handle multiple content ingestion points allowing for multiple content providers and multiple distribution outputs. Automation routines or profiles must be able to manage these processes on an individual or collective basis.
• Automated processes: This is the ability to automate individual steps like encoding or encryption, as well as automate the end-to-end process on a per affiliate (end-point) basis. Once the individual steps have been automated (e.g., transcoding), those processes can be re-used, strung together into end-to-end profiles. This simplifies the creation of automation templates.
• Workflow automation: Develop an automated workflow that includes messaging and approval capabilities. This way, content owners and distributors can ensure that they have signed off on critical stages of the workflow to ensure the end result is a service that meets distribution partner requirements and end-user expectations.
• Customization: Having a customized automation console and programming infrastructure allows the inclusion of steps or other technologies in the process that may lie outside the video distribution service.
Make informed decisions … quickly
Broadband distribution and consumption of video enables a level of data collection that is unprecedented in the broadcast world. An appropriate infrastructure can gauge how much of a video or ad was watched, the amount of ad impressions completed, when and where videos are paused, where content was discovered, whether the video was watched in full-screen mode, and numerous other metrics traditional broadcasting simply does not provide.
This richness of data metering, collection, reporting and analytics provides the insight and hindsight necessary to drive business decisions. Upon collection, data must be aggregated across distribution channels and fed into an appropriate business intelligence dashboard to facilitate strategic decision making. This dashboard may be an existing business intelligence platform, part of the video service delivery platform or a small collection of disparate systems.
However, this data must also be shareable with other stakeholders in the ecosystem such as ad networks, content rights holders, affiliates and licensing authorities. This can be achieved by exposing a version of the dashboard to the stakeholder or by simply sharing the raw data via an Application Programming Interface (API) or simple export mechanism.
At a high level, effective data “dashboards” allow decision makers to see how consumers respond to a particular service and provide key data points for adjusting strategy include: Should the number of advertisements be increased? How much of the video is being viewed? What is the click through rate on companion banners? What price point is most effective? How does categorization influence consumer purchase behavior? All of these questions and more can be effectively answered and the strategy modified — in real time — with an appropriate infrastructure for metering, collecting, reporting and analyzing data generated by a digital video service.
Adapt or perish
The explosive growth of broadband video will continue unabated, but the rules have evolved and will continue to change. It is no longer enough to deliver a “single-mode” service that relies on one delivery method or economic model. All participants in this industry must quickly design, launch, test, evaluate and change their service offerings along with changing consumer expectations.
Tracking and adapting to these changing tides is the key to maximizing the revenue of a particular service offering. By the same token, the costs of deploying these services must be controlled. Multiple services must be consolidated and complex manual processes must be automated. And of course, your efforts must be measured for effectiveness and that data shared with your partners, vendors and stakeholders as collaboration will drive the development and refinement of best practices.
It really all comes down to this: adapt or perish. To keep up with the digital video boom, it will be critical to continually experiment, measure successes and adjust to changing market and consumer demands.
Keith Kocho is the president and founder of Newton, Mass.-based ExtendMedia, a provider of software and media services.
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