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Will 2010 be the year of paid content aggregators?
Yonatan Sela 20 Jan 10
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As web TV changes the face of the media industry, promising opportunities are created for new online players – aggregators of paid content for well segmented audiences. This opportunity is created thanks to the changing relationships between content owners and pay TV operators. Nowadays, significant amounts of ads supported premium videos are already available online, making more and more people change their viewing habits and watch their favorite TV shows (and some movies) online. The
Much of the content will not be available online for free (ads-supported) anytime soon, and will be unleashed there only once it is paid for. Content owners are still dependent on income from pay TV subscribers. Yet, in light of the rising popularity of online viewing, it’s only a matter of time before content owners will reconstruct their relationship with pay TV operators in order to better reflect the balance of power in the reshaping media industry. I’ve written before about the TV Everywhere initiative - an essential measure pay TV operators must take in order to maintain their market position and avoid the big bang separating them from the content owners. But the interesting trend I’ve been seeing lately is new market players that perceive themselves as the alternative for pay TV providers in the online arena, and aim at becoming this decade’s leading distributers of paid content. Now that cable / satellite infrastructure is no longer a barrier, it’s a different ballgame with brand-new players: online paid content aggregators. These players aim at creating "The Hulu of local content" in specific countries, or deliver a particular selection of content to well segmented audiences.
These new players – the paid content aggregators - include mostly the content owners themselves, leading web portals, veterans from the mobile content industry and internet entrepreneurs. They are all trying to solve the 20 Billion dollar question: how to get people to pay for content online? In 2010 some of the most innovative new players will be launching their paid content services online using Tvinci’s platform (we’ll publish details soon). For a while now I’ve been fascinated by this process, in which we meet with clients that bring vast experience in charging money for internet services and TV / mobile content. Some of them are true conversion experts, with remarkable understanding of user behavior. They sit for long hours together with our R&D team, and together we try to find out what would work, and make masses of people purchase videos online. As a result of this process, and based on the technology and aggregate experience we’ve been gaining on paid content delivery since launching Orange online VOD shop in 2008, Tvinci developed an all encompassing solution for effectively delivering paid content online.
We believe that considering current market conditions, 2010 will be the year niche premium content - which is otherwise harder to obtain – will be the most consumed (i.e. paid for) content online. Our test groups indicate that our on-player user friendly purchasing process, which offers easy access to premium content in a personalized environment using a variety of secure payment methods, lowers the barrier for purchasing content and increases conversion rates. We are trying to crack "the conversion code" and turn (free) viewers into buyers of content or subscribers. Just as people have been paying for their favorite content on TV for two decades, they will be doing so online, initially for niche content (it might be easier to relate to this concept in light of the fact that people have been paying for online porn videos for years). I believe that mainstream content consumption patterns will follow suite, as they always have. Online video market leaders YouTube and Hulu are expected to launch their subscription offerings to the public in 2010. At the pace this industry develops, it’s impossible to predict the balance of power 2 years down the road, and the identity of market leading paid-content providers is still unknown. New "paid content aggregators" may be taking a significant portion of this constantly growing pie.
Posted in All posts, Content Aggregators, Hulu, Internet TV, Monetization, Operators, Paid Online Content, Pay TV, Youtube 1 comment
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The sucess of such players depends on the costs associated with setting up this type of operation for a content aggregators with no existing relevant infrastructure.