Content Licensing Development: Traditional Television, Subscription Video on Demand, and Upcoming Models Broken Down
### Navigating the Future of Content Licensing in the Streaming Age
The landscape of content licensing has undergone a seismic shift in the digital era, with SVOD platforms leading the charge. In 2024, these platforms are expected to account for 58% of the digital video market share[1]. However, they face a formidable challenge from ad-based models like AVOD and FAST, which are gaining popularity due to their cost-effectiveness and accessibility[1][3].
In response, major players such as Netflix and Disney are adopting hybrid monetization strategies, offering ad-supported tiers alongside their premium, ad-free content[1][5]. This move aims to cater to a broader audience while maintaining a premium offering for those willing to pay.
However, the cost of licensing premium content is on the rise, driven by multiyear bidding wars and minimum guarantees[2]. This financial pressure is compelling platforms to explore ad-supported options to maintain profitability or increase prices for subscribers.
Mature SVOD markets are also grappling with subscription fatigue, leading to rising churn rates. To combat this, platforms are diversifying their offerings and pricing models to retain subscribers[2].
The escalating costs of content licensing are squeezing platform margins, leading to a rethink in content acquisition strategies. This shift may result in a focus on producing original content or acquiring niche titles, rather than competing for expensive franchises[2].
To mitigate economic pressures, platforms are diversifying revenue streams through bundled offerings that combine SVOD libraries with live channels. This strategy can help negotiate better carriage fees and sustain content spending[1].
Technological advancements, such as AI and other technologies, could potentially ease production costs and improve content efficiency. However, these benefits are still in the early stages, with most platforms currently relying on traditional models[2].
The growth of AVOD and other free or low-cost models reflects a shift in consumer preferences towards more affordable content options. This trend challenges traditional SVOD models and necessitates innovation in content licensing and distribution strategies[3][5].
At CoPro, we are navigating these trends by leveraging our global teams across three continents to find new projects to pitch[6]. Our Sales Leader, for instance, uses our website to find green-lit projects to pitch, while our Strategy and Finance leaders use it for CoPro partner discovery[7].
Our Animation Production Leadership also uses the platform to find CoPro partners, profile their preferences, and vet them[8]. Meanwhile, our Technology Sales team discovers active post-production and VFX companies, and our Distribution teams find new licensees and deals with existing partners[9].
Our CXO Leadership is also actively finding indie studios to acquire, top distributors, and content rights-holders[10]. Our Strategy teams monitor competitive upcoming slates and licensing activities, keeping us at the forefront of industry developments[11].
In the face of these changes, CoPro is committed to staying ahead of the curve, ensuring we continue to deliver the best content for our partners and audiences.
[1] https://www.statista.com/statistics/1007916/global-digital-video-market-share-held-by-svod/ [2] https://www.cnbc.com/2021/02/16/netflix-is-spending-more-than-ever-on-content-but-its-still-not-enough.html [3] https://www.cnbc.com/2021/02/09/peacock-is-the-latest-streaming-service-to-announce-free-tier-pricing.html [4] https://www.hollywoodreporter.com/business/business-news/disney-plus-hulu-star-price-hikes-1235084862/ [5] https://www.cnbc.com/2021/03/23/disney-plus-is-raising-its-price-for-the-first-time-ever-starting-march-26.html [6] New information about global teams [7] New information about Sales Leader [8] New information about Animation Production Leadership [9] New information about Technology Sales and Distribution teams [10] New information about CXO Leadership [11] New information about Strategy teams
- In the digital era, where SVOD platforms dominate the content licensing landscape, major players like Netflix and Disney are turning to hybrid monetization strategies that incorporate ad-supported tiers, to cater to a wider audience while still offering premium, ad-free content.
- To cope with rising content licensing costs and combat subscription fatigue, SVOD platforms are exploring diversification in their offerings, pricing models, and revenue streams, leveraging technologies such as AI to improve content efficiency and lower production costs, while simultaneously seeking strategic partnerships and acquisitions.
