The following post is part two of Ooyala's exclusive Internet television SWOT analysis for broadcasters, networks, and content providers. Part one is here.
Weaknesses: 5 Weak Links That Media Companies Must Address To Dominate Online Media
Brand recognition, viewer affinity and deep content libraries make media companies a natural fit to profit from Internet TV. But some common weaknesses stand in their way.
1. Fear and foot-dragging
Back in 1976, Disney and Universal sued Sony
, saying that Sony should be liable for copyright infringement by home video Betamax users. Sony ultimately won the case, and home video boomed. By 2004, U.S. home video revenue was upwards of $22 billion
. The lesson here is simple: new technology = more people watching more content = studios, networks, and broadcasters making more money. It’s true again today -- as people watch more online video, the total amount of video they watch is going UP. Cannibalization is largely a myth
. So why does fear still drive so much C-suite decision making? It needn’t—with the right tools
in place, you can combat piracy, increase audiences, and monetize online viewers to the max.
2. Underestimating the competition
Lumbering dinosaurs were killed off by an asteroid, while their tiny mammalian rivals evolved into awesome stuff like, well, us. Existing obligations—such as capital investments and legacy partnerships—must never be an excuse for a lack of agility. Competitors are lean, mean, and perfectly adapted to the new world—and they can’t wait to eat your lunch.
3. Playing hard to get
Back when there were three TV channels and a one-screen local cinema, consumers had to come to you. Now you have to go to them
. They want your content, but they want to start watching it on a phone and finish on their big-screen TV. If you’re not willing to accommodate them, there’s always something else on—or some other entertainment option available. You may find that Angry Birds is as much your competitor as other channels or shows. The walled-garden approach—creating artificial scarcity—doesn’t translate well to the abundance-based online world.
4. Thinking in outdated models
The lines between content creator and distributor are blurring. Netflix and Hulu are producing original shows. YouTube is investing $100 million in what is likely to be the first wave of original, professionally-produced content available exclusively online. Comcast, of course, owns NBCUniversal. The media universe is reorganizing fast, and media companies can hardly be too aggressive in seeking outlets for their content, whether through partnerships, acquisitions, or building their own.
5. Failing to maximize the power of analytics
Online video is a data goldmine, but many media companies are totally lost at sea when it comes to actually USING that data to improve the bottom line. What they need goes far beyond “how many people watched the show?” They need credible evidence and granular metrics
to (a) demonstrate the true value of their audiences to advertisers, and (2) devise new ways to make their viewership worth even more.
Sure, there are some real threats facing networks, broadcasters and content providers, but there are also tremendous opportunities to profit from the shift to IPTV.