Home Authors Posts by SES Video

SES Video

Avatar
1 POSTS 0 JOBS

Monetising Content in the Age of Freemium: The impact of distribution networks on the bottom line

SCREEN AFRICA EXCLUSIVE:

Written by Clint Brown, Vice President of Sales and Market Development for SES Video in Africa

Getting video content to viewers can be a minefield of possibilities. Whether a company is a content developer, rights holder, broadcaster, live events producer, OTT provider, or mobile operator, the path they choose will define their revenue and potential for growth.

Distribution. Many see it simply as the headache in between getting noticed by customers and making money. However, if the correct calls about distribution are made, a business model can thrive, even in this age of Freemium content.

Traditional linear TV is broken down into three models: Pay TV, Free-to-Air (FTA) and Free-to-View (FTV). Then, on top of this, there are a host of new models developing. The most prominent are subscription-based Over-the-Top (OTT) services like Netflix, but Video-On-Demand (VOD) services come in many forms. Less well known is transactional OTT, for example, where a viewer can pay for only what they watch on an OTT platform.

Choosing between all of these options isn’t getting any easier. These models are developing in response to consumer demand and everyone needs to consider their strategy. Incumbents, such as broadcasters with a distribution system already in place, might need to look at doing things in a different way. Yet it is also crucial for new entrants, from content developers to OTT providers, to find that perfect approach. More and more companies are offering Over-the-Top (OTT) services for Video-On-Demand (VOD) options, giving audiences all the power, but what makes the most sense is a complex question, complicated by technical infrastructure.

Traditional TV models – whether Pay TV, FTA, or FTV – can maximise infrastructure and deliver content to large numbers of people at minimal cost. According to Dataxis’ latest figures from 2017, in sub-Saharan Africa there were 94 million ‘TV homes’ in 2017, 24.2 million of those being Pay TV homes. Of these TV homes, the majority make use of either terrestrial infrastructure (55.7 million homes) or satellite connectivity (36.5 million).

Other models require internet connectivity and related technologies for viewing. While smartphone users number 287 million, homes with fixed broadband lines only come in at 6.4 million, and in 2017, Digital TV Research’s latest numbers reported only 1.5 million subscribers to VOD services.

These numbers are important, because to achieve economies of scale it is crucial to consider the reach any technology has, and how it impacts affordability for the end consumer.

Payment methods can give a window into affordability. According to the World Bank’s Global Findex Database of 2017, that year the majority of people in sub-Saharan Africa made their payments for utility bills using cash only; 24% used mobile phones accounts; and only 16% used an account attached to financial institution.

Once the possibilities offered by infrastructure have been considered (and balanced with affordability), the next step is to look at the consumer experience. Each of the choices offers their own end result in terms of user experience. OTT gives consumers more choice and convenience, while traditional TV, particularly satellite, provides a dependable service with high picture quality.

Finally, any company looking to maximise their content to the fullest extent will want to consider the back-end interface that any of the choices imply. Transmitting content securely might not be a top concern for the end-consumer, but defending against content theft is always a priority for the rights holder. An equally hot topic of any back-end interface is analytics. Getting information about content consumption can offer valuable insights for decision-making. OTT services allow for massive amounts of data concerning viewing habits and preferences to be collected, opening up the opportunity to customise content production to suit particular audiences (as Netflix does).

As the world’s leading satellite operator, SES understands how important data about consumption habits is, and this is why the company conducts its satellite monitor study. In this annual market research study, SES looks at how many homes in specific countries receive their television service from satellite, terrestrial and IPTV infrastructure. In 2018 we published results showing that satellite serves 95% of TV homes in Ethiopia, 65% in Ghana, 55% in Tanzania, 48% in Uganda and 28% in Nigeria. In this study, SES is also able to measure the reach of our satellites – which deliver TV channels to 30 million TV homes in Africa, including over nine million Direct-to-Home (DTH) households across West Africa.

That might seem like a small piece of data, but it’s just the kind of key information that can define a business plan. AfricaXP, the continent’s leading independent channel network, content distributor and producer, saw the reach of nine million homes from our 28.2 degrees East geographical position as a great opportunity. It was a ready-made audience for an FTA channel bouquet – and audience is everything for any FTA model, as they always rely on advertising revenues. Therefore, by offering a massive audience ready to receive new channels, SES provided AfricaXP with the reach it needed to monetise their content efficiently and with little upfront cost, as set-top boxes would not have to be distributed. The resulting FTA channel bouquet, PREMIUM.FREE, now brings attractive local and international content to audiences across Nigeria and other parts of West Africa.

Each company is different, though, and the situation in each country complex. Insights into how to make a business model work for content developers or broadcasters can be vital when starting a new venture or entering a new market. And, when the conditions are right to set-up an OTT business model, operations can get even more complex. This is why SES goes beyond satellite broadcasting with a video services subsidiary, MX1, that provides end-to-end media services. With MX1 solutions, broadcasters and media companies are easily able to aggregate, manage and deliver their content to multiple platforms. This gives SES unique experience of the complete spectrum of distribution models.

A good example of this is how, together with Vubiquity and Cell C, we’re bringing live and linear content to the South African market.

With over 16 million subscribers, Cell C is one of South Africa’s leading mobile operators. The company focuses on providing their customers with new solutions that are different from anything the market has seen before. This was seen when Cell C wanted to build a stand-alone platform and network-agnostic brand that would consistently enable them to bring to market new services that match how South Africans consume on-demand entertainment, and what they want to watch.

Within this strategy, Cell C were the first to offer subscriber-centric solutions for Facebook and Whatsapp, and were eager to develop an on-demand entertainment solution: black. Black goes beyond typical video-on-demand packages to combine live and linear TV, movies, sports, betting, gaming and more – in a wide variety of content packages that can be purchased via a pre-paid air-time account. Cell C chose Vubiquity to create black because of its relationships with premium content providers and its global reach, and the company also elected the right partners – in SES and MX1 – to deliver content on any platform or device. Vubiquity supplies the content, while SES and MX1 take care of the delivery – with the technical capabilities to get the content from anywhere in the world to Johannesburg, and to seamlessly deliver that content to consumers on multiple devices.

- Advertisement -
- Advertisement -
- Advertisement -

Pin It on Pinterest