Media convergence and its many facets

avatar
by Jacob Solomon Aug 15, 2022 News
Media convergence and its many facets

Understanding what media convergence means on the technical, infrastructural and business levels is becoming more important as media houses straddle the worlds of linear and OTT. In conjunction with Red Bee Media, BroadcastPro ME hosted a discussion on how definitions have evolved and what datememe datememe datememe datememe datememe is. Sarah Nathan gives us the information.

The shift of the region's media industry towards convergence was the topic of the discussion. The Chief Product Officer at Red Bee Media moderated. Heba Al Samt, Digital Media Director for TV and Radio, was one of the people who joined for the Roundtable. From various perspectives, they looked at convergence, its impact on the future of linear, and what is yet to come.

“We launched Discovery Plus two years ago and now have four million subscribers. However, most of our revenues are still coming via linear. We cannot just stop linear and only go digital” – Bassem Maher, Director of Media Operations, Warner Bros. Discovery

What is the relationship between two things?

Russell wanted to know what convergence meant to the people in the room. He thinks that the lines between traditional TV and OTT can be blurred. The old needs to be streamlined while the new is implemented well.

Convergence is any integration and interaction where you have touch points. After converting from analogue to digital, the industry went through convergence. This umbrella covers the transitions from traditional media to digital and social media. In the most recent concepts, convergence is also occurring. OTT players are interested in live streams on their platforms.

Users can find entertainment and other services at convergence. It's a single access point that allows you to do almost anything. He said that convergence is driven by a change in the profile of consumption of the user. There are minute-long clips on mobile phones and hour-long professional productions on the platform. In order to achieve convergence, companies should answer the question: "How do I bring these adjacent types of consumption within this platform that is our delivery system?"

“When it comes to OTT, I think these business models [gaming, gambling etc] are a little bit far away from our core business. Anything that will contradict your main revenue stream should be put aside” – Nadine Samra, Chief Business Officer, Weyyak.com, ZEE
Successful convergence is sustaining both linear and digital, rather than favouring digital and disregarding linear, said Maher. Although digital invites viewership through subscriptions, linear generates revenue. Discovery is currently experiencing this balance: “We launched Discovery Plus two years ago and now have four million subscribers. However, most of our revenues are still coming via linear. We cannot just stop linear and only go digital.”

Consumer benefit should be the main objective behind convergence. There is no convergence if you don't deliver value to consumers. Disruption or transformation of business is what it is. The growth of OTT raises the question of whether companies should strive for convergence. Humans are interacting with devices less while OTT services are increasing. Do you want to give consumers a lot of content in different places?

“It [convergence] is a single access point that offers you the ability to do virtually anything” – John-Paul McKerlie, VP of Marketing and Sales, TOD/beIN Media Group
Which will prevail – OTT or linear?

Modern technology showed that traditional means wouldn't be rewarding. The growth that we built our dream upon was not going to come from selling to linear channels. Why not go to OTT? The goal of producing content in several languages is achieved by the use of OTT. We can start growing around the world in the next few years, and we see that these years are going towards digital platforms.

OTT can replace a part of linear programming. Regular follow-on content can be created based on viewer preferences. When you sell OTT rights, don't allow you to make follow-on content. I would be able to create a channel on the fly if I had a recommendation engine.

Linear can be generalized when discussing its future. We need to separate linear content from digital and OTT content.

“For production companies like ours, 30-40% of their business comes from TV stations or cinemas, but 60-70% is from merchandising. So, we’re now looking into this” – Feras Al Kiswani, COO, Progressive Generation Studios

News and live events are likely to stay on linear channels. It's important for programmers to keep things interesting and engaging with viewers. In order to scale down costs of creation, we need to integrate other solutions and technologies.

The debate over linear's future in the region began over a decade ago. Samra said that working under the belief that linear has ended has helped companies reach their current positions. Is linear going to leave or stay? OTT just arrived. Linear investing is still worthwhile. Most channels would have stopped airing by now if it weren't for it.

“It [One Million Meals campaign] was one of the highest clickthrough rates we’ve ever had”- Heba Al Samt, Digital Media Director for TV and Radio, DMI
What business models can convergence bring?

Business models are going to have to change to keep up with the possibility of more than one revenue stream. Social commerce includes e- commerce on traditional and digital platforms.

Social commerce has been tested. Previously, if viewers liked characters' outfits, they could click for more information and purchase from e-commerce sites. This model was not very successful. Samra said that coupling the interactive e- commerce experience with content didn't work for them. It might be a bit early.

The 100 million meals campaign was a way for the government to feed those in need during the Muslim holy month. During Iftar hours, the linear channel showed a pop-up that asked users to donate. The result was a resounding success. According to Al Samt, it was one of the highest clickthrough rates. It proved less effective when the model was adapted for the OTT platform. More people wanted to participate in the campaign, which is why we saw more success there.

Sanjay Raina, a global media and entertainment professional

Morgan said that the model has helped media houses achieve the same goal. The broadcasters wanted to drive traffic to digital and divert users to OTT platforms with several new series. Users could find trailers and promotional videos on linear channels. Users would be directed to the mobile app to set notifications if the series hadn't aired yet.

“We need to segregate which type of linear content will sustain and which will move towards digital and OTT, and essentially converge” – Karim Morgan, Head of Digital Technology, Asharq News

Fast is being used to open up another revenue stream. Dr Refaat said thatFAST allows ad replacements. To increase CPM, you have to change all the linear ads and streaming ads that relate to the viewer. Fast is being used by eight Turksat channels to play ads for hotels that are related to Turkey and Europe. Monetisation is all about.

It is important to spread FAST internationally. It could be wasteful if it wasn't already. The ads cost between $2,000 and $5,000. $5-20 per CPM is what you would get if you go to FTA. That isn't much at the end of the day. If you want to use FAST, you need to go global and use platforms that support it.

The challenge for the channel is bringing in revenue. Refaat said that nobody is going to advertise on the channels. Physical products that you sell around your series are encouraged by me. The merchandising market is being explored by the company. 70% of business comes from merchandising, while 30% comes from TV stations. Al Kiswani said that they are now looking into it.

Afzal Lakdawala, Head of Digital Transformation, ARM Holding

It helps to enter the metaverse and launch NFTs. According to Refaat, Business Bay has recently welcomed a port for NFTs. The group wants to establish a theatre in the metaverse.

Although currently prohibited in the region, gambling could be a prolific business model, which speakers said is the industry's next step in the region and an indirect model to monetise for sports.

Steve Russell, Chief Product Officer at Red Bee Media and the day’s moderator

Raina said that companies in the region should follow the example of Amazon Prime. The company combines e-commerce, OTT television, video gaming, merchandising and advertising.

While capitalising on the country's busiest retail period, Amazon Prime ventured into live sports in the UK. There was no parallel app for the games that they showed them on their main app. They achieved the highest CPMs for the ads shown during those matches.

Samra advised that partnerships with gaming, gambling and e- commerce should take a back seat to their main objective. OTTs are not close to our core business. It's a good idea to put aside anything that will conflict with your main source of income. You're just diversion.

Should companies handle their own tech?

Should the company invest in in-house technology orOutsource technical services to a white-label provider? When Al Kiswani and his partner realized that long-term upkeep and technology updates wouldn't help long-term goals, they decided to outsourcing to Red Bee Media. Investing in Red Bee services as a white label and in content makes sense. We need to focus on children's content.

Companies should focus on core business objectives and take advantage of technology outsourcing opportunities to mitigate risk. He said to keep the technical worries to the company.

Outsourcing also promises security and faster time-to-market, granting companies much more efficiency. After a few years on the market with a service provider, companies are also likely to have more scalability. “Service providers with specific knowledge of what they do in niches are becoming the key factor,” said Van Dam.

Discovery is an exception to the outsourcing trend. We have our own intellectual property. Our own technology carries our own intellectual property. The scarcity of service providers allowed it to do this. Raina suggested that moving in-house could become a discussion once a company hits $100 million in revenue. Results seem to come from partnering with internet and outsourcing businesses.

What’s next?

In a decade, media convergence is likely to be the same as it is now. Companies will still strive for convergence despite the tools and platforms changing. Al Samt said that platforms may evolve to give users a more immersive experience. Social events are entertainment. Feeds will move to a place where you can keep in touch with your friends.

The next five years are likely to see the evolution of the 'content is king' slogan. Content will become god and beyond.

Dr Naser Refaat, CTO, Rotana Group

Morgan said that platforms could turn to viewers for content. The audience will become the content creators.

In the future, practices from prominent OTT players will serve as a lesson for media companies in the region.

Related