How active archives are throwing linear TV a lifeline
Do broadcasters and pay-TV providers have to jettison their business models to survive? And can active archives help?
The media industry is in the throes of a revolution. Broadcasters who have always relied on linear programming and ad sales are losing their stronghold as viewers migrate away from their set-top boxes and toward video-on-demand services. Broadcasters need to augment or entirely alter the linear distribution model to take advantage of this shift in viewership — or risk a painful decline.
A July 29 press release issued by Moody’s Investors Service supports that theory. The release, which summarises a new Moody’s report, entitled “Pay TV and television networks — US: OTT invasion: Grand bargain required for long-term sector and credit stability,” opens this way: “The reign of pay-TV and television networks as the most stable, predictable and highest-margin segments of the US media industry is rapidly eroding…”
It continues, “Over-the-top services (OTTs) and digital ad platforms such as Netflix, Amazon Prime, Hulu, Facebook, Apple, YouTube and Sling TV are breaking down the long-standing practice of contractual aggregating and bundling content for distribution through closed-system set-top boxes. This shift from traditionally-scheduled, linear TV to time-shifted, digital, mobile and subscription video on demand (SVOD) streaming platforms reflects dramatically changing habits for consumers…”
That’s just the start of the strong business case Moody’s makes for sweeping change in the world of linear broadcast.
Another powerful excerpt: “According to the report, to compete with OTTs and rapidly growing digital ad platforms for subscribers and advertising revenue, the pay-TV and television networks must end their linear distribution model, offer all programming on-demand with full stacking rights, implement robust search and recommendation interfaces, and implement real-time targeted ad placement focused on the viewer instead of the programme.”
I quote the press release so heavily here because it offers such a succinct and compelling analysis of the disruption that is occurring in the media business. No longer can broadcasters expect to be successful relying on the linear distribution/monetisation model that has propelled the media business for years. Instead, they must ditch the linear model and embrace OTT and VOD services in order to offer programming that engages viewers 24/7/365. Anytime, anywhere engagement is the new name of the game.
That’s where the active archive comes in.
A media archive, as we’ve always known it, is passive by nature, just sitting at the end of the linear distribution chain. Programming passes down the chain in one direction, monetising as it goes, then ends up in a passive archive, where it languishes. For that reason, a passive archive is mostly a cost centre. Its assets might generate a little revenue here and there — thanks to being rereleased, subclipped, or bundled. But in general, a passive archive is, quite literally, the end of the line for content.
An active archive, on the other hand, is a two-way street. Content flows in and out according to the broadcaster’s plan, which, of course, caters to the audience’s viewing habits. An active archive is designed to drive nonlinear distribution. As such, it’s a revenue centre, not a cost centre. Programming enters the active archive as soon as it’s ready to engage the audience — not at the end of the linear chain.
For example, with sports events, you might want to push clips of key moments to social media right after they happen. Or to promote the next season of your compelling drama, you might want to drive fan engagement through microsites with behind-the-scenes material drawn from the active archive.
An active archive is ground zero as content monetisation/engagement options increase. Worldwide distribution, OTT distribution, syndication to multichannel networks or social media, subclipping and licensing, sites and microsites — all emanate from the active archive. When coupled with rich metadata (see below), an active archive allows for quick and easy location, rapid packaging, and near-live distribution of content to the right place in the right format.
Even better, all analytics, claiming, social tagging, ad placement, and purchase data flow back into the active archive. Broadcasters can put that extra metadata to work creating, as Moody’s describes it, “robust search and recommendation interfaces” and “real-time targeted ad placement focused on the viewer instead of the program.” In other words, the rich metadata gleaned from an active archive helps broadcasters further monetise their content.
Abandoning the linear model in favour of nonlinear distribution/monetisation based on an active archive sounds daunting — and in some ways, it is. So it goes with disruptive change. But the good news is that the industry is quickly moving in that direction thanks to the acceleration provided by the cloud. No one company will own this new model. Rather, an active archive will be part of an ecosystem of cloud-native applications and services that deliver all this innovation. It will be built by many companies cooperating, and sometimes competing, in an open cloud environment.
As the Moody’s press release suggests, linear broadcasters must either ride the wave of disruption or get sucked under. In that scenario, an active archive is the technological lifeline.