14 / December / 2021

What matters when estimating the content value?

Data rebuilds the OTT. Today most people are consuming entertainment with a created identity, as opposed to other of mass media model, in which individual consumers were anonymous.

What matters when estimating the content value?

Today most people are consuming entertainment with a created identity, as opposed to other of mass media model, in which individual consumers were anonymous. 

Providers now have a traceable record of consumption from those identities. The powerful data about content engagement offers much more accurate and detailed view of the actual value of content.

Content strategies are now driven by data obtained rather than based on industry rubric, relationships or fair intuition . Projections, negotiations and acquisitions all become simpler and more productive as a result.   

De facto, the role of data in the OTT is defined in real time. Information enabled performance-based pricing models that establish risk sharing between broadcaster and seller. Data can help to determine content items that let a service attract new subscriptions or retain existing ones, based on insights into users’ viewing habits . 

The trend in data-driven content acquisition is that many VOD platforms no longer pay content rights holders a single fixed sum for item, but instead sign performance deals with or without a Minimum Guarantee. This means that the s eller now know s the minimum to be received from the transaction, based on metrics such as minutes streamed or number of people who watched or percentage share of ad revenue. 

This pricing model moves the focus from buyer and seller relationship to the value of the content. Good content will attract a bigger audience and therefore generate more value. And that value will get back to the content makers. 

Content succeeds or fails depending on its qualities, rather than on the whims or biased projections of industry insiders. The resulting value of content is no longer determined by buyer or the seller, but rightfully by the demand of consumers. 

At the end of the day, the only opinion that matters is that of the audience. If they don't want to watch it, then it does not matter what the production budget was, or who is in it. 

Like many industries before it, OTT industry is pivoting to understand the value of this data and having direct relationships with the end consumer.  

For that reason, we expect the industry to embrace data, create normative databases and by that - a better understanding.