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As Power Shifts Back to Consumers, Agile Monetization Helps Content Providers Survive a Saturated Market

Vijay Sajja, Evergent co-founder and CEO

Think back to how we chose and paid for video entertainment as recently as a decade ago. Depending on geographic area, consumers had to choose between two or three options for linear TV and on-demand video, packaged into bundles of channels that were often expensive or didn’t include the customer’s preferred content. Power rested in the hands of the PayTV providers, who developed a reputation for overpriced offers and aloof customer service.

The power dynamics of today’s video ecosystem have shifted substantially. Over the past ten years, the rise of on-demand video services—subscription-based (SVOD), ad-supported (AVOD) and transactional (TVOD)—has created a buyer’s market, with an ever-growing number of streaming services competing for audiences and entertainment budgets. While it may seem unthinkable to the former cable behemoths, agility is now the name of the game.

Spoiled for choice

While consumers are choosing from more services than ever before for video entertainment, content providers also have options to choose from with regard to monetization. SVOD structures allow streaming services to leverage the quality of their content library, trusting that consumers will want to commit a monthly fee to maintain access to popular programming that can’t be found anywhere else. But as subscription fatigue sets in and consumers reach the limit of their entertainment budgets, AVOD presents an appealing alternative for platforms that cannot yet stand on their own in terms of content; over time, these platforms can use advertising dollars to fund further content acquisitions, deepen engagement and dependence and lead to potential long-term conversion to SVOD. They can also attract viewers through their AVOD services and then convert them to SVOD once they are hooked.

While these two payment structures offer some flexibility to emerging content platforms, the high-stakes, oversaturated marketplace doesn’t leave room for competitors to remain idle. 

Finding solutions with agility

Beyond basic AVOD and SVOD structures, streaming services aim to stand out through any number of promotions and products, from free trials and discounts to new programming and content packages. But while these strategies can make a difference in reaching and holding onto new subscribers, a misstep can prove costly. Content providers must be able to implement changes, measure performance and make adjustments quickly to ensure optimal returns.

For even the very largest streaming platforms, agile monetization is essential to stay fluid and nimble in a hypercompetitive marketplace. In the current market, consumers are choosing between dozens of entertainment options based on content and cost. Deloitte’s 2020 “Digital media trends summary” demonstrated the extent to which this marketplace has exploded: the average consumer maintains 12 entertainment subscriptions, with millennials averaging a whopping 17! However, the consequences of this saturated marketplace are fatigue and churn. According to the same Deloitte research, 43% of millennials intend to cut down on their entertainment subscriptions; 36% of those who cancelled a subscription cited the expensive cost as the reason for pulling the plug. 

Agile monetization is the ability of a company to rapidly introduce, roll out and support new business models, promotions and packaging. In this case, agile means flexibility and taking decision-making that previously would have been considered and implemented over a period of months and instead condensing the entire process into a matter of days. In practice, agile monetization allows content providers to apply techniques typically associated with digital advertising: AB testing, small sample groups, and decision-making backed by rich data. Whether it’s changing pricing models, exploring new geographies, or tweaking billing cycles, agile monetization enables content providers to make small, rapid adjustments until they hit on the winning formula.

Focusing on a more agile monetization strategy allows platforms to deliver more efficient and more personalized services to their customers. Whether it’s quickly deploying new promotions to boost customer acquisition or adding functionality for new payment methods, the ability to seamlessly make changes has a direct impact on boosting subscriber numbers, reducing churn, and improving the bottom line. As the market for streaming services evolves on a seemingly daily basis, it’s up to the platforms themselves to “think quick”, stay ahead of the curve and double down on their audience.

Evergent’s Integrated Revenue and User Management platform helps media, and entertainment companies reduce time to market for products and services, simplify complex monetization models, and run back office processes more efficiently.