Many new players in the direct-to-consumer (D2C) space face a similar challenge. While they may have built up a very loyal group of followers, they don’t necessarily have the most important data. Capturing audience and usage data is key to shaping their view of their users’ profiles and regular habits on the second screen while watching premium video content.
Let me give you an interesting recent example. Earlier this year, Spotify has announced its sponsorship of FC Barcelona. As part of the negotiations, the club highlighted their vast fanbase of 350 million registered supporters. For Spotify, the potential access to this huge group of FC Barcelona supporters offered huge revenue potential. But the reality was somewhat different. Only 1% of registered FC Barcelona supporters chose to provide their personal data. This resulted in Spotify paying a considerably lower amount for its sponsorship deal. The overall value of their sponsorship proposal was significantly reduced.
And yet, the opportunity for service providers is very real. Many existing advertising solutions revolve around opt-in models, but the consumer benefits of doing so are minimal at present. The challenge for the whole industry is simple: how to provide a direct benefit to the consumer that will be enough to encourage them to share their data?
Data is king in the D2C space
As my colleague Erik Ramberg pointed out in his recent blog, data is critical in the D2C space: “everything is geared towards real-time interaction and a more personalized experience.” Data should expose the right types of content and unlock the right interactive services to help engage viewers in their viewing experience and unlock new monetization opportunities.
Earlier this week, market research firm Kantar said that 54% of online adults in the UK surveyed in its recent DIMENSION study said they preferred seeing adverts tailored to their particular interests and needs. This, however, must be weighed against the fact that 56% of adults surveyed were also concerned that more personalized content would compromise their privacy. The lesson here is that incentivizing membership needs to add real value, and from my perspective, there are already several potential use cases.
For example, a potential opportunity could be to introduce the application of credits to an account, leveraging the transactional nature of the VOD platform to offer consumers the option to provide data in exchange for a certain level of credit. which includes access to premium content. In other words, a direct return on the consumer’s investment in their data. This model is already adopted in many free mobile games. The main objective is to make the value of the service so desirable that users will want to pay to extend the level of availability. Or to trick them into paying additional fees to avoid watching certain advertisements in the program.
Another possible use case is the ability to insert micro-transactions that allow access to a small portion of a live sporting event, such as the last quarter of a basketball game. There are two potential ways to achieve this:
- A flat rate, which provides a direct entry point to content
- Use targeted advertising to provide a sign-up option for new users who want to watch content for free. The user then gives their consent for the streaming service to access their data and share it with third parties.
Come discuss MediaKind’s ad capability at the 2022 NAB Show!
Once you have a fan’s data, it instantly becomes more valuable to you. There are great opportunities from a purely advertising standpoint once you have a more complete view of your target audience. It’s about moving away from “Lewis the Chicago Bulls fan” to Lewis, a 35-year-old married man who lives in Springfield, Illinois, and loves a certain brand of potato chips, as well as sports betting game – who is also a Chicago Bulls Fan! In other words, build an advertising model that goes beyond generic information to a more hyper-targeted profile of that person.
These are all areas we can address with our PRISMA solution. Using a very powerful entitlement engine, PRISMA enables service providers to take advantage of these use cases. For consumers who opt for some use of data, it is possible to offer very flexible ad placement options and provide access to a small portion of a live sporting event, such as the last 10 minutes of a game basketball, or access to a free one-month pass for a paid service.
And with MediaKind Engage, our D2C solution for video production, streaming, and audience engagement, we can help content owners, broadcasters, and media brands meet the pace of cloud adoption and the rise of streaming services. We can provide the back-end platform, streaming technology, and rights to apply highly advanced use cases for hyper-targeted advertising. Through MediaKind Engage, we can enable sports content owners and other major rights holders to effectively become TV operators in their own right by owning the platform and building billing systems while simultaneously managing fans and Accounts. I discussed this subject with another of my colleagues, Chris Wilson, in a recent video.
MediaKind can facilitate all of these types of offers, and I can’t wait to explain to NAB Show visitors how we do it! Please contact me via LinkedIn if you’d like to learn more, you can also drop by the MediaKind booth if you’re in Las Vegas this week (#W2800), and I’d be happy to show you some of our live streaming demos.