By Paul O’Donovan, Director of Market Development – Direct to Consumer, MediaKind
Many of the new players in the direct-to-consumer (D2C) space are facing a similar challenge. Although they may have built a group of very loyal subscribers, they don’t necessarily own the all-important data. Capturing audience data and usage is vital in shaping their view of their users’ profiles and regular second-screen habits while watching premium video content.
Let me give you an interesting recent example. Earlier this year, Spotify announced its sponsorship of FC Barcelona. As part of the negotiations, the club pointed to its extensive fanbase of 350 million registered supporters. For Spotify, the potential access to this enormous group of FC Barcelona supporters offered huge revenue potential. But the reality was somewhat different. Only 1% of FC Barcelona’s registered supporters had opted-in to provide their personal data. It resulted in Spotify paying a considerably smaller amount for their sponsorship deal. The overall value of their sponsorship proposition was vastly reduced.
And yet the opportunity for service providers is very real. Many of today’s existing advertising solutions revolve around opt-in models, but the rewards for the consumer to do so are minimal at present. The challenge for the entire industry is a simple one – how do you provide a direct benefit to the consumer that will be enough to entice them to share their data?
As my colleague Erik Ramberg highlighted in his recent blog, data is critical in the D2C space: “everything is being steered towards real-time interaction and a more personalized experience.” The data needs to expose the right kinds of content and unlock the right interactive services to help engage viewers with their viewing experience and unlock new monetization opportunities.
Earlier this week, the market research firm Kantar said that 54% of the UK-connected adults surveyed in its recent DIMENSION study reported a preference for seeing ads that were relevant to their particular interests and needs. This, however, needs to be balanced against the fact that 56% of the adults surveyed were also worried that more tailored content could compromise their privacy. The lesson here is that the incentive for opting-in needs to be a genuine value-add, and from my perspective, there are already several potential use cases.
For instance, one potential opportunity could be to introduce the application of credits to an account, leveraging the transactional nature of the VOD platform to offer consumers the option to provide data in exchange for a certain level of credit which includes access to premium content. In other words, a direct return on the consumer’s investment of their data. This model is already being adopted across numerous free mobile games. The primary objective is to make the value of the service so desirable that users want to pay to extend the level of availability. Or to entice them to pay an additional fee to avoid watching certain in-program advertising.
Another possible use case is the ability to insert micro-transactions that enable access to a small portion of a live sporting event, such as the final quarter of a basketball game. There are two potential ways of achieving this:
Once you’ve got a fan’s data, they instantly become more valuable to you. There are big opportunities from a purely advertising perspective once you have a more rounded view of your target audience. It’s about moving away from ‘Lewis the Chicago Bulls fan’ to Lewis, a 35-year-old married man who lives in Springfield, Illinois, and enjoys a certain brand of potato chips, alongside in-game sports betting – who is also a fan of the Chicago Bulls! In other words, building an advertising model that goes beyond generic insights to a more hyper-targeted profile of that person.
These are all areas that we can address through our PRISMA solution. Utilizing a very strong entitlements engine, PRISMA enables service providers to take advantage of these use cases. For consumers who opt-in to a certain usage of data, it’s possible to offer very flexible ad-placement options and provide access to a small portion of a live sporting event, such as the final 10 minutes of a basketball game, or access to a month’s free pass to a paid-for service.
And through MediaKind Engage, our D2C solution for video production, streaming, and audience engagement, we can help content owners, broadcasters, and media brands respond to the pace of cloud adoption and the increase in streaming services. We can provide the back-end platform, the streaming technology, and the necessary entitlements to enforce very advanced use cases for hyper-targeted advertising. Through MediaKind Engage, we can enable sports content owners and other primary rights-holders to effectively become TV operators of their own accord by owning the platform and creating billing systems while simultaneously managing fans and accounts. I discussed this topic with another of my colleagues, Chris Wilson, in a recent video.
MediaKind can facilitate all these kinds of offerings, and I’m looking forward to explaining to NAB Show visitors just how we do that! Please reach out to me via LinkedIn if you’d like to learn more – alternatively, please drop by the MediaKind booth if you’re in Las Vegas this week (#W2800), and I’d be glad to run you through some of our live streaming demos.