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The Elusive Art of Monetising Multiplatform

Some pay TV operators are finding that deploying services on multiple platforms including the Internet and mobile devices is a lot easier than making money out of them. The motivation so far has been largely competitive or even defensive, with multiscreen platforms seen as necessary to combat churn and maintain the value of a programming package rather than establish new revenue sources immediately.

But once multiplatform services are in place, new revenue opportunities will inevitably open up, according to Steve Christian, vice president of marketing at pay-TV revenue protection and content security technology vendor Verimatrix. “A year ago it was all about getting to market with something first, and initial forays into the Internet tended to be standalone silos of service,” said Christian. “But now operators are coming back and reappraising the totality of their solutions.” This includes starting to explore ways of harnessing the multiple platform capability to improve profitability, which means cutting costs as well as finding new revenue streams.

Indeed multiplatform technologies present new opportunities for cost cutting, as was pointed out by Ramin Farassat, vice president for product marketing and business development at multiplatform infrastructure vendor RGB Networks. “Operators can deliver on-demand and catch-up TV services at lower costs using fully IP-based caching and CDN servers,” said Farassat. “IP-based delivery of network-based DVR services would also lower the operators’ investments by avoiding having to purchase expensive set-top boxes with hard drives.”

But having achieved these savings, operators will be looking for opportunities to extract more revenue from two sources — advertising and premium content. So far many providers of online or Over the Top (OTT) services have struggled to find the winning formula, according to Farassat. “Some on-line content providers tried the advertisement-only route, and were not able to sustain sufficient revenues to continue their service. Some tried the pay-only route, asking the subscribers to pay for content with no ads, but were forced to ask for higher fees and were not able to attract enough subscribers to maintain their service. It appears that a combined paid-service with ads, may prove to be the winning combination, similar to what we are accustomed to with TV for the most part.”

But Verimatrix’s Christian is convinced that established pay-TV operators will, in any case, be in a stronger position than providers offering just Internet services. “Incumbency brings a big advantage in terms of content, having a big existing subscriber base, and a trusted brand, as well as the business model, that can be superimposed on the new technology.”

This brings revenue potential both for advertising and selling more content. The ability to reach different platforms can increase total eyeball time with scope for selling more ads when the consumer is away from the living room, suggested RGB’s Senior Director for Product Marketing Nabil Kanaan. “We believe the overall pie can indeed grow with on-line and mobile advertising because the total content consumption time has the potential to increase as consumers now have access to content in locations and environments where they previously could not access that content.”

Furthermore, interactivity on a one-to-one basis on PCs, smartphones and mobiles can allow the user to take action, such as access extended forms of an ad or click to purchase. “There are definite opportunities for click-to-purchase, or requests for information on mobile and Internet TV that go beyond what TVs and traditional set-top boxes can support,” said Kanaan. “The more powerful technology and the ‘lean forward’ nature of these devices means they are more suitable a medium.” But Kanaan cautioned operators that viewers could be turned off by intrusive ads on PCs or mobile devices just as they are on the TV.

When it comes to selling content, Verimatrix’s Christian believes distribution across multiple platforms will create more scope for selling premium material, helping operators extract maximum revenue from it. Christian cited the anticipated reduction by Hollywood studios of the VOD release window from 90 days to 30 days after theatrical release. This move, expected to be announced soon, has been driven partly by ongoing piracy, which eats into DVD and VOD sales — indeed studios talk of “the piracy window” sometime between theatrical release in the cinema and the VOD release three months later.

But according to Christian the move is also driven by growing faith on the part of studios and other content producers in the ability of the pay-TV industry to provide secure delivery over all platforms and not just the TV. An important component of this belief is digital watermarking, Christian insisted. “While we’ve been waiting for a security mandate from studios regarding watermarking in general, the new early-release window definitely mandates use of forensic watermarking to trace illicit content.” This has led to increased interest in watermarking for content protection. “We’re in trials with a number of companies to meet the early release window, illustrating the greater security and more restrictive rules early on in the release cycle,” said Christian.

Digital watermarking and related techniques hold promise for revenue generation in another way — by enabling a device to identify a particular piece of content and take some action as a result. This might be simply recording that the content, which could be an ad, has been consumed, or triggering some action on a social network, such as informing friends what is being watched at the time.

The buzzword is Automatic Content Recognition (ACR), which is being offered by several vendors including digital watermarking and fingerprinting specialist Civolution, and TV apps company TV Interactive Systems. Digital watermarking involves embedding an invisible and inaudible signal into the broadcast stream, so as to be robust against copying and attempts to remove it. Video fingerprinting involves identifying some characteristic component of the content rather than inserting anything new, and generates a much smaller amount of data than a watermark, but is handicapped by the need to maintain a common fingerprint database.

TV Interactive Systems is trying a variant of fingerprinting known as “video signaturing,” which picks up a lot of weak clues about the content, each of which on its own is insufficient to identify it, but when taken together allows it to be determined with very high confidence. It is the same principle as an accumulator bet to pick 10 consecutive winners at a horse race — the chance of getting one right is fair, but the probability of calling all 10 correctly is very small. The advantage of video signaturing over video fingerprinting is largely computational; each calculation is quite easy.

There is also potential for integrating multiplatform content delivery with social networking, for example in creating viral adverts that spread across all these outlets. The issue at present though with a number of these emerging possibilities, whether involving fingerprinting or social network integration, is that, while their potential is clear enough, there is still doubt and debate over how best to harness it, and there is still uncertainty over how consumers will respond. As Christian put it, a new art form has to be created around multiplatform monetisation, but he for one is convinced this will not take long in coming.

Monetization of multiple screens will figure prominently within IBC’s conference program this year, which will focus strongly on the growing battle among pay-TV operators to exploit different platforms, both to gain market share and find new sources of revenue.