As major media owners reassess their priorities in the face of digital, there’s an opportunity to invest in technologies that can improve monetization, streamline operations and help future-proof the industry. But before that can happen, we need to set some context and dispense with two myths.

First, the context. Consumer behavior has been driving media fragmentation for a long time. According to Nielsen, nearly half of consumers use their phones and televisions simultaneously. As we add more screens and platforms, fragmentation will only increase. But this trend is accelerating, due in large part to social distancing measures and a corresponding increase in media consumption across all screens. Tackling the unification of all channels is even more important on the face of accelerating fragmentation, but before media owners can address this challenge head-on, they need to get their facts straight.

The first myth media owners must reject is the idea TV is in decline. Prior to the pandemic, 75% of U.S. households viewed some form of traditional TV over the course of a year, while 55% of U.S. consumers have access to connected TV. Moreover, marketers also rated television content as the most effective means for creating an emotional connection between brands and consumers, according to a recent CMO.com survey.

As we watch more content, media owners are seeing growth in both linear and CTV audiences. It will take time to understand how increased viewership across all channels is changing consumer behavior. But the key point is that television—no matter how it’s distributed—was both incredibly valuable before the pandemic, and it’s even more valuable now. Indeed, a recent Kantar Media analysis found that three-quarters of consumers think brands should continue to advertise on television during the pandemic in order to talk about how the brand can be helpful in the new normal, keep them informed about the brand’s reaction to the changing situation, and offer a reassuring tone.

The second myth is that programmatic will drive down television CPMs. Some media companies point to this myth to justify the slow development and deployment of the more sophisticated advertising products that are now the norm for digital. According to Nielsen, 95% of TV in the U.S. is not data- or programmatically-enabled. But the reality is that unlike digital, television inventory is finite. Here, that scarcity works to the media company’s advantage. By embracing advertising technology in a space where supply is finite and the barrier to entry is high, media owners enjoy greater control to reduce waste, price packages more accurately, and increase yield. That's very different from the lack of control, pricing declines, and data leakage often seen in display and mobile driven programmatic efforts, where inventory is infinite and new content owners regularly enter the market.

Now that we’ve set the context and done away with some mythology, here are three things major media companies can do to prepare for the future.

Use linear as a foundation to grow targeting capabilities in a unified way

Linear remains the centerpiece of most media plans, but increasingly advertisers are supplementing with digital and CTV to reach missing and hard-to-find viewers. Knowing this, media companies should look to supplement legacy products with more progressive advertising offerings built on advanced technology.

In some cases, this means building easy-to-operate technology platforms that unify advertiser access to audiences across a media company’s various properties, whether linear or digital. But it also means thinking about innovation cooperatively. At the very least, media companies should build stacks that are interoperable with other media companies. This will enable data-sharing and even sales consortiums—both of which are critical for locating audience segments not found on linear.

Activate on first-party data

First-party data is powerful in its own right, but thanks to new privacy laws, it’s the lifeblood of advertising. Consequently, the goal for major media companies should be to bring first-party data capabilities to TV in order to increase yield and enable better reach and targeting for advertisers. 

To do this, media companies must preserve ownership over the entirety of the value chain associated with their audience data. Essentially, you’re building an end-to-end pipeline where you control every step of monetization, and there’s zero data leakage. By safeguarding the value chain, media companies guarantee respect for the viewer as well as compliance with privacy laws. Just as important, these end-to-end pipelines give advertisers what they need most—safety and performance.

Simplify buyer access and workflow

Simplifying buyer access and streamlining workflow allows media companies to better meet the needs of their advertising customers. Not only will media companies shore up revenues, but they’ll also do a better job of competing with streaming rivals that aren’t burdened by legacy workflows.

But streamlining workflow is also about future-proofing. New workflows put media companies in a position to leverage future innovations around automation. If media companies take a proactive approach here, they’ll own the coming disruption of planning, delivery and reporting. Just as important, because there are relatively few major media companies compared to the number of digital publishers, the television industry can use new methodologies for planning, delivery, and reporting to align around standards for valuing data-enabled inventory.

To be sure, major media companies have a lot of work to do. But it’s not a matter of safeguarding against digital. In fact, major media companies will own the future, provided they take the opportunity to master digital right now.

"Creation and delivery has advanced to the point that consumption is the bottleneck, leaving content providers to compete with sleep. Providers have so much to deliver, their challenge is how to capture the attention of consumers and maximize what they consume during waking hours." —Ashish Chawla, Cognizant Business Consulting

For information, media and entertainment companies, driving revenue from content is a constant challenge, with today’s paid content likely offered for free tomorrow as competitors try to capture market share.

The proliferation of digital technologies and platforms over the past decade has drastically impacted how content is developed, delivered and consumed, creating a new ecosystem to align with consumer demand for content packaged in smaller, more digestible units. Application programming interfaces (APIs), which transmit content to and from any destination quickly and cost-effectively, can be used as the mechanism to transfer granular levels of that content, and support new business models such as this.

For example, where music was once purchased on physical CDs that contained multiple songs, consumers now purchase single songs via iTunes. Platforms such as YouTube have revolutionized education, enabling educators to provide topic-specific viewing that lets students tforgo purchasing entire textbooks. More and more, people consume news via multiple online sources instead of purchasing an entire newspaper, giving them immediate access to real-time, personalized stories.

As providers move toward offering content across digital, they need to process smaller units across the value chain and track the return for each piece. To do this, they need to understand their content’s lowest common monetizable denominator (LCMD). For example, a television series broadcast on Netflix might contain 12 episodes, each of which can be watched individually. Return can be calculated by episode based on viewings. Since there would be little to no demand for individual scenes within an episode, one episode is the LCMD.

Setting Value Parameters

Organizations can identify LCMD by evaluating pieces of content based on set parameters for all points across the value chain — acquisition, storage, aggregation, delivery and consumption. The objective is to strike the right balance between minimizing the effort to create, enrich and deliver content while maximizing reusability, exposure and value. One of the points in a value chain may have more importance than another, when determining the LCMD. MSNBC, for example, whose material includes both news headlines and video clips, may want to give content delivery a higher priority than other points for determining the LCMD.

How a piece of content is evaluated for LCMD depends on an organization’s strategic vision and roadmap. Different types of content and formats can have different LCMDs, which may change over time as technology and business strategy evolves. Once an organization identifies the LCMD, it can evaluate the returns from anything created at that level of granularity.

A key challenge for content providers is to ensure that what they create is stored in a format that enables it to be easily pushed into any new digital platform. As disruptive technologies hit the market faster than ever, providers must adapt more quickly and constantly modify the way they process content to keep up with changing consumption.

Creation and delivery has advanced to the point that consumption is the bottleneck, leaving content providers to compete with sleep. Providers have so much to deliver, their challenge is how to capture the attention of consumers and maximize what they consume during waking hours. But the competition is fierce, and consumers are overwhelmed by the volume, creating demand for highly personalized, streamlined content delivered to consumers’ interfaces of choice.

The number of digital platforms will continue to proliferate, as will the combinations in which everything can be consumed. This will require providers to structure content to be easily accessed through APIs, package it for specific devices and seamlessly send it across multiple platforms. New developments around virtual assistants and smart speakers such as Google Home, Apple Homepod or Amazon Echo will further change delivery requirements as voice gains in popularity and people no longer view a screen and click to navigate.

The key takeaway is to keep innovating: Yesterday’s value-add is today’s commodity. Providers must move fast to keep up with the constantly changing landscape and identify their LCMDs so they can track returns.

There is no one-size-fits-all solution, but all content providers can generate value and bolster returns by developing a framework for determining the LCMD of their content and tracking returns at that level.

Ashish Chawla is global head, Cognizant Digital Content Services, at Cognizant Business Consulting, an information technology services company.

Global linear and over-the-top (OTT) video revenue will climb to nearly $65 billion by 2021, with U.S. revenue alone projected to swell from $8.2 billion to $22.8 billion in 2021, according to Digital TV Research Ltd. Keen to capitalize on these opportunities, content providers have already seen the value of bridging workflows to deliver seamless experiences for consumers across all devices.

Innovative business strategies are emerging that leverage new technologies and drive customized and creative experiences for customers. Here are three ways content providers can facilitate better efficiencies, expedite go-to-market initiatives and maximize monetization opportunities.

• Deploying Multiplatform Solutions: PwC has reported that 78% of U.S. consumers now subscribe to at least one OTT service. Thus, content providers are looking for effective, creative and flexible platforms to deliver content across all devices to stay competitive, monetize quality content and build deeper levels of engagement between their audiences and brands.

These efforts can oftentimes be thwarted by complexity, cost and performance issues — natural byproducts of stitching together disparate partners, technology stacks and content across an ecosystem of mobile screens and live multichannel broadcasts. To alleviate these potential headaches, content providers should consider solutions that enable them to streamline processes for all media, TV metadata, transcoding, digital rights management (DRM) and merchandising across platforms.

• Finding the Right Partners: Another option for content providers is to tap into a robust ecosystem of partners to innovate new capabilities, services and offerings. Whether the goal is to design a more flexible front-end solution or enable personalized content discovery, workflows may be more effectively enhanced and expanded by leveraging a partner’s strengths in concert with their in-house systems.

For example, a content provider who needs high-volume, rapid-turn video-on-demand (VOD) content aggregation, processing and delivery to both linear and digital destinations could work with partners that can handle hybrid delivery to a wide variety of set-top boxes and the most popular online services. Additionally, a content provider can tap into multiple content delivery network (CDN) partners to easily switch providers based on traffic and alignment with specific objectives and geographical needs.

• Evaluating Monetization Options: Content providers and advertisers will continue to come up with new ways to monetize their content with the constant in the equation being the need to continue to move their service and their audience towards an optimal dialogue with each other. Everything hinges on staying relevant and engaging to consumers. The constant push to compress time to market and maximize return on investment means that monetization strategies need to demonstrate a keen awareness of where the service sits on each viewer’s priority list — and respond accordingly.

One of the first ways to grow digital revenue was a simple transaction-based (TVOD) model: I see a piece of content I want to buy, I pay for it and download it. Today, subscription-based (SVOD) models, where a fixed fee gives viewers unlimited access to content, are particularly attractive.

In an ad-supported (AVOD) model, content is free and sponsored by advertisers. This can be compelling, especially for content strong enough to attract a loyal fan base.

There’s no single strategy when it comes to monetizing your content. But the “big three” xVOD monetization models give content providers options to expand their revenue potential across multiple devices. Sometimes, a hybrid approach may even be best.

Ultimately, it still comes down to the quality of content, and of the experience itself. Great content and playback wins hearts, and leads to “repeatable mindshare.” By thinking through the above options proactively and leveraging respective strengths while collaboratively tapping into long-term goals, content providers can create solutions to build the most seamless, optimal — and profitable — multiscreen video experiences.

Barry Tishgart is vice president of Comcast Technology Solutions.