One of the biggest discussion over at Operative has been around the MAJOR moves by streaming companies. Disney and Warner announced a new bundle for Disney+, Hulu and Max coming this summer. Netflix, Roku, Apple and Amazon are just a few of the players betting on live sports broadcasting deals. So it made us think about the changing state of streaming companies, and what strategies they need to embrace to be profitable. Subscriptions and advertising will need to offset the cost of licensing deals and the continuously growing cost of content for their library. So we sat down with Mike Napodano, Operative’s Chief Delivery and Information Officer to share his take on the evolving market, and how media companies should be looking at opportunities for monetization.
How Cloud Delivers Unified Data, Streamlined Operations and Scalable Technology
Streaming revenue is going to hit $17.3 billion in 2024, earning more than Pay TV for the first time. But what exactly is “streaming revenue” today? According to the report, about half, $9 billion, will come from advertising, while the rest will come from subscription and pay on demand revenue.
Steaming started out as a largely subscription-based market, but that’s changing fast. While the streaming revenue of yesterday was more subscription-based, the revenue of tomorrow is likely to be even more concentrated around advertising.
The hard part for streaming companies is putting the pieces in place to be flexible and agile enough to deliver the right mix of paid and ad-supported to the right customers and maximize profits while doing it. Having the insights and the agility to move ahead of the market, and get ahead of viewers, requires a few core capabilities: centralized data, flexible operations, and scalable technology. Cloud technology is a major component of streaming success and can help media companies with each of these capabilities.
Get Ahead of the Streaming Market
Companies like Netflix, Amazon and Disney launched their services with subscription and pay-for-content models that didn’t include ads. After grabbing millions of subscribers, their growth rates cooled a bit, and it became clear that a new revenue stream was needed in order to keep scaling up. These media companies and other streamers are all getting into the advertising game in various ways, from offering hybrid, lower cost subscription models with some ads to totally free ad supported offerings (FAST.)
The reality is that there is a lot of consumer choice in the streaming market. Subscriptions are cooling because viewers don’t want to keep piling on more and more monthly bills. That’s a big reason why FAST is the fastest growing part of the market. But that doesn’t mean it will stay that way. If streaming companies partner to offer consolidated subscription deals like Disney and Warner, Comcast’s new package, or if a new company enters the market (like how TikTok upended social media) things could shift again.
The key for streaming companies is to be ready for change, and to capture value – and market share – early. The way to do that is to have an agile base platform that can move with the business in real time.
Using Cloud Technology As a Catalyst for Success
Operative works with streaming companies across a variety of subscription, hybrid and advertising models. AOS, our cloud-based solution has the core capabilities that streaming companies need to be competitive and to grow:
Next generation media like streaming requires next-generation technology like Operative AOS. But, that doesn’t mean companies have to rip out what they have. Rather, AOS is designed to work with a company’s technology. Operative is also highly experienced working closely with media companies to help them unify their processes and make the most of their newfound insights and capabilities.
Operative deeply understands streaming media, which is a big part of our future. We also understand how much the media industry can change in a short time. Not only have we grown up through the transformation of digital, our roots are in linear. With AOS, we’ve combined the best of both sides of the business and revolutionized our approach with cloud technology to make sure every media company has what they need to succeed, no matter where their business moves in the future.
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