Retransmission fees paid by distributors are the largest source of revenue for TV station groups and networks. However, due to the overwhelming increase of data and new technology trends like OTT, affiliate revenue management processes are becoming complex. Thanks to Operative’s Medea system, companies can simplify complexity and gain control over their retransmission fee business.Read More
Dave Morgan recently published a great new article about the positive momentum TV companies are enjoying going into this year’s UpFronts. In short, he cited that:
- TV still offers better scale than any premium digital offering
- TV companies can enjoy a futures market for high-demand content that digital still can’t really touch
- Brands, including P&G, have been vocal about reinvesting in TV after a potential over-investment in digital
He also subtly noted that linear TV inventory is declining, He implies that this year, the UpFronts are positive, but that a pure linear focus over time will yield a bit less.
This is precisely right. While linear TV holds enormous power and value, that power and value is being distributed and nibbled at as consumers choose new screens and new formats over linear. It’s plain to everyone that while TV is having a moment, changes are afoot.
This is a fantastic opportunity for TV companies to actually see the future and take advantage of that knowledge to build new solutions now.
Where print media companies failed to collaborate and build out in front of industry change, TV companies are showing enormous progress as they work to preserve scale and innovate to capture more advertiser media spend. Yes, a lot of M&A is happening to force collaboration, but even disparate companies are working together to deliver offerings that will be compelling to advertisers as they chase consumers. NBCU recently announced that they are joining OpenAP, even as they have been an outlier in advanced TV innovation, they see the value of working with the ecosystem.
The problem is that the ecosystem is complex. Consumers are disorganized and are embracing a host of different content options from OTT to VOD to blockchain-based data sharing content exchanges. Making sense of all of these innovations, in many states of maturity is further complicated by the various advertising models that come along with each content channel.
The irony is that advertisers don’t want complexity. They want to reach viewers in a scalable, targeted, repeatable, measurable way. They want to avoid fraud and they want it to be automated. Operative is focused on helping media companies craft their own strategy while delivering streamlined offerings to advertisers.
Every TV company is dealing with legacy linear systems, separate digital systems, manual processes and a unique content, audience and revenue strategy that requires an open, flexible operating system.
There are several important infrastructure elements to consider when preparing for participation in everything from advanced TV to programmatic to VOD.
Recently, I wrote an article, The Different Paths to Profitable Multichannel Ad Sales, about the following:
- Open up legacy tech stacks to remain in control of the sales and delivery process. It might simply be too painful to rip out a lot of legacy linear advertising technology and start over, but that doesn’t mean you can’t open it up. Focus on freeing up whatever valuable information needs to be shared across systems to retain a clear view of your campaign delivery, content availability, audience, and yield. For example, by merging delivery information from a video ad server.
- Build bridges across legacy technology to ensure inclusion in marketplace deals. Broadcasters are going to need to share a lot more with each other than they ever have before. To create scale, they’ll need access to each other’s product catalogue, inventory availability, audiences, and pricing, at various levels of transparency and reporting. Creating broadcaster standards and common APIs will help expand and solidify early marketplace ventures.
- Build all new tech on a modern backbone for new ventures. Including the elements that make a new system flexible, like single sign-on and cloud-based software will ensure that you don’t get pulled too far down by legacy systems.
Interested in Operative’s Advertising solutions? Contact us for more information.