You’re the proud owner of a new long-form show or movie, and now it’s time to monetize it. For most of us in business development, selling the exclusive streaming rights to a subscription service like Netflix or Amazon is one of the first options that comes to mind. And why not? It’s simple, it’s proven, and compensation is guaranteed.
But just as we’ve seen content itself change over the years, so too must our business strategy for that content to evolve. It’s not enough to copy and paste a model from traditional TV — or even short-form digital — and call it a day. Rather, it’s time to enter into a brave new world of long-form monetization, circa 2015.
Up until now, subscription services, ad-supported content, and a la carte options have all been championed to varying degrees of success. But there are flaws with each: subscription services require a laser focus on customer acquisition; ad-supported content can frustrate viewers; and a la carte purchases present a higher barrier to entry because who wants to pay per episode of his favorite show?
Consumers today are highly sophisticated, and their viewing habits have dramatically evolved. They are able to intuitively assess what different content is worth, and then act accordingly — either by punching in a credit card number or patiently watching pre-roll.
That’s a good thing, because it forces content creators and distributors to stay one step ahead. And while there’s no magic formula, there are a few guiding principles that will help lead the way as we, in the business, determine how best to monetize to today’s world.
Assign the right value to your content.
Consumers have a limit to what they will endure, and you must understand their threshold. Some viewers will tolerate longer commercials or higher prices if content is a must-watch, but that can’t be said for everyone.
So how do you figure it out? The short answer is: do your homework. Whether it’s running surveys or polling your target audience, use the tools at your disposal to make an informed decision. But don’t operate in a vacuum either; follow the market. If Netflix charges $9 per month, and HBO Now is priced at $15, evaluate your content accordingly. And then, take the time to educate consumers on exactly what they’ll receive to avoid sticker shock.
Push new boundaries.
This is easier said than done, but the time is right for significant change when it comes to the way we think about ad formats. In fact, we need to stop thinking about ads as separate pieces of content altogether, and start thinking of ways to integrate brands into long-form at the very beginning.
Clumsy, cringe-worthy product placement isn’t going to cut it. Think bigger; make the brand another character in your show, and use them to help inform the broader narrative. If your main character eats kale constantly, that tells you something about him. Similarly, if another character is always disinfecting and cleaning her physical space, that is another clue for viewers. By integrating a paid sponsor in a unique, bold way, you’ll generate strong brand association and meaningful ROI.
Choose a monetization strategy that won’t isolate consumers.
A good rule of thumb is to commit to “either/or” instead of a “both/and” modus operandi. Just because you can run ads after viewers have already paid for content doesn’t mean you should. Similarly, offering a portion of your content library via a basic package but keeping the most-desired video under another paywall doesn’t work either.
Consumers today are savvy. It’s more important to build loyalty and maintain their trust for the long-term rather than
squeeze out a few extra pennies. In this industry, monetization is more than simply turning a profit once — it’s doing so at scale, over a long period of time.
Be smart about distribution.
Windowing strategies for digital are continuing to evolve, as we’re seeing with Crackle and Hulu. It often makes sense to strike an exclusivity agreement for a designated period of time, and then follow that with broad distribution. The upside here is that ad breaks and pre-roll are expected with repurposed content, so there’s less risk of isolating consumers.
While it’s more difficult to create a monetization strategy that will stand the test of time, it’s worth the effort. If the end-to-end experience is seamless for viewers, advertisers, and content creators alike, it will pay off in spades.
As head of business development and partnerships, Frank Besteiro leads all business development efforts for video across The AOL On Network. As the head of AOL’s video content strategy, Frank is responsible for securing content partnerships that allow AOL’s 50+ million viewers to watch every type of content on every device. Frank and his team work with many different top-tier publishers, such as Fox Sports, Discovery, and Martha Stewart to continue to grow the high-quality content available on the AOL On Network.