Show Me the Money! Reinventing Digital Revenue Streams
Everyone knows it, but it is worth repeating—the Internet has changed everything, and nowhere is it more apparent than in media and entertainment. Powerful Internet-based competitors, such as YouTube, Hulu, and Netflix, are transforming the media landscape, and it seems as if everyone who ever dreamed of becoming a filmmaker or publisher has jumped on the bandwagon and is publishing content through these new channels.
The result is a steady stream of commoditized content and the erosion of traditional media business models reliant on subscriptions and advertising. Subscription and advertising models are at risk. And while consumers expect more and more free content, over-the-top content (OTT) services like Netflix are proving that great original content can still drive big engagement.
Given these new realities, the entire media industry is exploring inventive strategies to acquire consumers, produce more income from existing subscribers, and retain advertiser loyalty. The media industry’s effort to invent new business models is leading to a flurry of innovation.
Language, always a bellwether of change, is an indicator of industry disruption. Terms that have been used for decades, such as pre-roll and post-roll, are taking on new meaning in the digital era, and terms once considered industry jargon—including freemium, native advertising, digital content marketing, streaming video on demand (SVOD), and paywall—are now mainstream.
In a landscape of seismic change, how can the media industry find successful business models? There are several pathways to success, but they are all rooted in one fundamental principle: every new revenue stream must be backed by a solid measurement-and-analysis strategy that can immediately identify what is and isn’t working. If you’re going to fail, then fail quickly.
Failing quickly involves testing, learning from your mistakes, and then moving on as rapidly as possible. The key actions are to try to deliver relevant, customized experiences to customers on a variety of digital devices, and then test, learn from, and optimize these experiences to continuously improve.
To test and experiment with what is and or isn’t working, especially in the emerging world of OTT video services, which rely on subscription business models, Adobe customers are employing Adobe Primetime, Adobe Analytics, and Adobe Target, among other Adobe Marketing Cloud solutions. This enables marketers to try out elements of customer experiences and use data to determine which business models and content experiences are best suited to help achieve success among the key performance indicators.
The key is to find the most successful content mixes and figure out how they can be profitably packaged to reach the broadest audiences. New and emerging business models require complete transparency and data-driven insights, because the media industry is moving far too fast to keep pace without actionable information.
In this tsunami of change, marketers need to realize they will never be “done.” Marketing in media today is like speed dating. Use your instincts, put your best foot forward, and see what works. Then iterate, and iterate again. A few failures are inevitable but so is success if you’re armed with the right solutions, information, and a mindset that trial and error isn’t necessarily a bad thing.
For more information about how to find successful new revenue streams in media and entertainment, download the full white paper.