Monetizing the Multimedia Value Chain

Next Generation Communications Blog

Monetizing the Multimedia Value Chain

By Susan J. Campbell

In the realm of media communications, there is a state of unrest. Multi-channel TV and Internet content distribution has enjoyed strong growth, but something had to be taken down in order for this growth to succeed: incumbent terrestrial public and commercial broadcasters. As a result, these companies are struggling with significant revenue stream and business model issues.

As these companies must change the way they do business to monetize the multimedia value chain, what elements should they consider to get the job done? One option is the pay platform. Free-to-air (FTA) broadcasters can take advantage of the opportunities in this space as the market has long favored the pay-TV business. In fact, some of the most profitable channels are pay-TV channels.  

Video-on-demand is another strong growth area. In the United States alone, 8.5 billion video-in-demand (VoD) downloads were consumed on pay-TV services in 2009. The vast majority of these options were free-to-view. Providers were able to monetize the offerings through affiliates-type relationships. As pay-TV operators seeking to extend their VoD reach, there is an opportunity for pay-TV providers to enhance the attractiveness of their TV, mobile or broadband services.

Advertising holds significant promise in monetizing the value chain. Ad-funded VoD is one of the most recent models to hit the pay-TV market. While the movement in this area is slow, demand has already been demonstrated by consumers. Virgin Media has captured much of this opportunity in the U.K., rolling out its dynamic ad-serving system across its networks.

Such systems are also being considered by a wide range of telcos and cable companies as they allow the effective monetization of less popular broadcaster library content which pay-TV operators might otherwise be unwilling to pay for.

Finding the right partner is another way to monetize the value chain in multimedia. ITPV and cable operators are well positioned to partner with broadcasters and content providers in the delivery of multimedia content across multiple screens. Partnerships help to reduce the complexity for broadcasters seeking to reach more consumers on more devices.

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