The lively conversation of the Soft Talk on The Digital Challenge: Business Models revolved around the seismic, inexorable changes in digital content and platforms, where “segmentation has become almost a science and [which] have to take into account constant interruptions of innovation and changing consumer patterns,” says Nathalie Lethbridge (NL Media Advisors), who co-moderated with “numbers guy” Richard Broughton (Ampere Analysis).
Today, not only are new companies mushrooming and producers and distributors can go straight to consumers, bypassing the channels, but there is also a “consolidation of roles: producers, distributers, channels, platforms and services can be one, two or all four” of these things.
And there are the aggregators, like Under the Milky Way, whose Nicola Allieta spoke of the consistent upswing in the international distribution of independent European providers, especially on the global content provider par excellence, iTunes. “We can distribute a movie in more than 100 countries, which is quite new for the market,” he says, “and we now know the process of distributing content digitally almost throughout the entire world.”
Yet the transactional process holds continuous surprises: he cited a German-language documentary that has sold thousands of units on iTunes, adding the not-widely-known fact that iTunes and e-retailers normally give producers 60-70% of the published price.
This prompted Lethbridge and Vimeo’s Peter Gerard to open a window onto windows themselves. “I’m a big supporter of windows,” claims Gerard, “but not traditional ones. Nicola’s successful experience…demonstrates the idea that cannibalizing a unique experience that a TV company will have with their audience is nonsense, utter nonsense.” His ideal windows are concentric – from the inside out: “The first window can be for the smallest amount of people paying the most amount of money to see [a film]. You can start transactional at say $25 and sell 10,000 units and then go on to next window.”
With today’s exponential segmentation and fragmentation, this smallest niche circle is essentially what all consumers are becoming. Elizabeth Hendrix of North of Curiosity Stream, the next generation in documentary services that launched this spring in the US, welcomes this: “What’s powering this whole revolution in streaming is that the consumer is in the driver’s seat. They’re now deciding what they want to watch, and this is empowering to all producers and filmmakers, you don’t have to give away all video and TV rights – there’s a lot of value there now.”
But, says Gerard, “we need to remind consumers that they need to support diversity of content.” Because subscribing to several content providers monthly would exceed the average €10 we spend monthly on music and film. Also because, said PR guru Lucius Barre from the audience, “When you reach a peak consumers start looking elsewhere and go directly to content providers.”
Dragoslav Zachariev, of the French Embassy in Italy and former Secretary-General of EuroVoD, raised a cautionary voice, saying that “we need to find the right balance between new and traditional models,” especially for film financing. “Producing content for all varieties of screens is fundamental today, and you need to have a digital strategy from the beginning. Each [independent] film is a prototype because each film has its own strategy.” A film still makes most of its money from theatrical, but transactional and subscriber/catalogue VoD services offer “vastly diff experiences [and] we have a duty in the industry to propose all these opportunities to consumers.”
Something that Sky is doing, says Paolo Lorenzini. Sky Online launched only in 2014, to consistent results, and clusters. The first, younger cluster “use laptops, tablets and cell phones as their main device for consumption, while the second [older cluster] is using digital content on their televisions primarily. The first uses digital on the go and the other to access pay TV content.”
Unlike Vimeo or Curiosity Stream, such a large company’s “content providers are not used to talking to people at end stage,” so gleaning which content is the most relevant to their customers can be a slower process. But “content is still king” he assures, and as the multinational gets ready to launch Sky Deutschland, they are honing the OTT content most relevant to German audiences, which differ vastly from their Italian counterparts.
He also urged everyone present to watch what Google and Amazon will do in the next few years attentively, especially as the latter recently announced their intent to enter linear channels. Despite the fact that an Ampere study shows that in Europe and the US, an average quarter of the population thinks their households will not be watching broadcast TV within five years.
Hendrix North also brought up the fact that the current 27 different digital platforms require many different programming languages “and as we move forward what will really help is a unification of programing languages, which will really help other independent content providers update their apps.”
Broughton concluded saying that the “bad news” behind this dynamic, exciting landscape is that “things are going to get more and not less complex in the next few years” while Lethbridge summed up proceedings with: “Evolution, revolution, new business models, hang onto your rights, try not to go exclusive and embrace the breadth while protecting your creativity.”
