For information, media and entertainment companies, driving revenue from content is a constant challenge, with today’s paid content likely offered for free tomorrow as competitors try to capture market share.
The proliferation of digital technologies and platforms over the past decade has drastically impacted how content is developed, delivered and consumed, creating a new ecosystem to align with consumer demand for content packaged in smaller, more digestible units. Application programming interfaces (APIs), which transmit content to and from any destination quickly and cost-effectively, can be used as the mechanism to transfer granular levels of that content, and support new business models such as this.
For example, where music was once purchased on physical CDs that contained multiple songs, consumers now purchase single songs via iTunes. Platforms such as YouTube have revolutionized education, enabling educators to provide topic-specific viewing that lets students forgo purchasing entire textbooks. More and more, people consume news via multiple online sources instead of purchasing an entire newspaper, giving them immediate access to real-time, personalized stories.
As providers move toward offering content across digital, they need to process smaller units across the value chain and track the return for each piece. To do this, they need to understand their content’s lowest common monetizable denominator (LCMD). For example, a television series broadcast on Netflix might contain 12 episodes, each of which can be watched individually. Return can be calculated by episode based on viewings. Since there would be little to no demand for individual scenes within an episode, one episode is the LCMD.
Setting Value Parameters
Organizations can identify LCMD by evaluating pieces of content based on set parameters for all points across the value chain — acquisition, storage, aggregation, delivery and consumption. The objective is to strike the right balance between minimizing the effort to create, enrich and deliver content while maximizing reusability, exposure and value. One of the points in a value chain may have more importance than another, when determining the LCMD. MSNBC, for example, whose material includes both news headlines and video clips, may want to give content delivery a higher priority than other points for determining the LCMD.
How a piece of content is evaluated for LCMD depends on an organization’s strategic vision and roadmap. Different types of content and formats can have different LCMDs, which may change over time as technology and business strategy evolves. Once an organization identifies the LCMD, it can evaluate the returns from anything created at that level of granularity.
A key challenge for content providers is to ensure that what they create is stored in a format that enables it to be easily pushed into any new digital platform. As disruptive technologies hit the market faster than ever, providers must adapt more quickly and constantly modify the way they process content to keep up with changing consumption.
Creation and delivery has advanced to the point that consumption is the bottleneck, leaving content providers to compete with sleep. Providers have so much to deliver, their challenge is how to capture the attention of consumers and maximize what they consume during waking hours. But the competition is fierce, and consumers are overwhelmed by the volume, creating demand for highly personalized, streamlined content delivered to consumers’ interfaces of choice.
The number of digital platforms will continue to proliferate, as will the combinations in which everything can be consumed. This will require providers to structure content to be easily accessed through APIs, package it for specific devices and seamlessly send it across multiple platforms. New developments around virtual assistants and smart speakers such as Google Home, Apple Homepod or Amazon Echo will further change delivery requirements as voice gains in popularity and people no longer view a screen and click to navigate.
The key takeaway is to keep innovating: Yesterday’s value-add is today’s commodity. Providers must move fast to keep up with the constantly changing landscape and identify their LCMDs so they can track returns.
There is no one-size-fits-all solution, but all content providers can generate value and bolster returns by developing a framework for determining the LCMD of their content and tracking returns at that level.
Ashish Chawla is global head, Cognizant Digital Content Services, at Cognizant Business Consulting, an information technology services company.
