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Monetizing Media is Not a Modern Day Tall Fish Tale

Monetizing Media is Not a Modern Day Tall Fish Tale

If you’ve been anywhere near the water, even as a visitor, you’ve heard a fish tale - where the fisherman or fisherwoman in question embellishes a bit (or sometimes a lot).  The story takes a few twists and turns about the experience, how small the pole was and how strong the fish (and angler) was.  And no fish tale is worth hearing if the actual fish is not at least three times larger in the story than in reality.   The key in deconstructing fish tales lies in sorting through the hyperbole to arrive at what actually happened.  

The same rules apply to hyperbole in the tech space, where sometimes opinions and conjecture can appear to outweigh reality and developing trends.  

Right or wrong, some pundits argue that today’s monetization methods for online video and the revenue that some publishers are deriving from their content are the equivalent of the aforementioned fish tales.  It is far too difficult and the experience and performance are often sub-par, they say.  I tend to agree.  Why?  The early days of ad insertion were built on the back of browser cookies, which helped support targeting and relevant ads, but negatively impacted performance.  Further, client side ad insertion (CSAI) by nature introduced additional latency as the player was too often waiting for an ad network (or a series of ad networks) to decision and deliver an ad.  

But things are changing, and the advances that server side ad insertion (SSAI) has introduced are mitigating many of these early concerns while adding massive scale and stability.  I think the overarching theme with video monetization is that some voices are citing old practices and performance, when the state of the art has advanced.  The technology is evolving and the dollars are moving  - like big fish in the waters below.   

Paving the path to digital revenue

Making real revenue has been a challenge since the first day publishers put their content online. As former NBC CEO Jeff Zucker famously said in 2008, he wanted the media industry ‘to work so that their analog dollars don’t become digital pennies.’ In his new role at CNN, he has come around, saying ‘digital is our future.’ Zucker helps make my point, too: it is far easier for a frustrated publisher to throw their hands up and give up when they encounter a hurdle on the path to digital dollars. As the adage goes, when the only tool you have is a hammer, everything looks like a nail. It is easy to throw cold water on new ideas, as some are doing when analyzing the state of digital media monetization. 

This isn’t to say that this is a solved problem.  Far from it.  Media monetization is just beginning to bear fruit and will continue to evolve.  We at Brightcove believe that 2017 is the year we will see great gains in this area, and we believe we can help our customers increase their video revenue by as much as 50%.  Now that it is gaining real momentum, we believe SSAI will play a critical role in this pursuit, enabling broadcasters to replace their native ads within the broadcast with completely different ad payload in the streams.  Further, these in-stream ads can be hyper-targeted to each and every viewer.  Because of the nature of devices, native GPS and internet protocol (IP) information, every viewer can receive ads that are more relevant to them, based on this and other data.  Above all, this approach helps publishers defeat ad blockers, a phenomenon that continues to be a concern for them as they seek to get their content in front of their audiences.  As 2017 plays out and client side ad delivery moves to SSAI, ad fill rates will rise and the slow march away from Flash gives way to improved ad technology, monetization will become reality for publishers and broadcasters of all sizes and shapes.  Again - the solutions that turn digital dimes into dollars will continue to evolve (as is the case with technology in general.  Those who are best prepared and adapt with this evolution will be the most successful - with the revenue to show.

Real examples emerging

Remember that SSAI isn’t the only pathway to digital profitability. A simple check-in with the media conglomerates today will show ambitious plans for digital growth and subscriptions, as they build their businesses with an eye to recognizing revenue from large swaths of new viewers who consume their content on new platforms every day. 

CBS recently announced strong growth for both Showtime’s online video service and CBS All Access.  As subscriber numbers pass the magic million number (and beyond), the investment these companies have made over the past few years proves that the decisions were sound.  CBS is bullish on their growth, with goals of a total of 8 million subscribers and a staggering $800 million in new revenue between both services by 2020.  

Despite its struggles out of the gate, DIRECTV Now has signed on 200,000 subscribers in its first few weeks.  This too is proof of two things - viewers are clamoring for new ways to watch the content they want, and that service providers (and networks) are betting on their services growing to meet these shifts and demand.  

These trends are exciting for many, despite the detractors.  It may not have been part of a fish tale, but this trend reminds me of a tale told by another seafaring person years ago when I was part of the U.S. Navy.  The sage, salty old sailor told me the easiest way to push through fear, uncertainty and doubt was to ‘be part of the solution, not part of the problem.’  This is the beauty in this exciting video space, where we don’t tell many tall fish tales and thrive on innovation and solving new problems.