Media companies get back to basics in 2023 with monetisation mindset

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by Lindsey Francy Feb 4, 2023 News
Media companies get back to basics in 2023 with monetisation mindset
Mark Zuckerberg

Mark is the founder of Facebook.

The CEO of Meta said this week that it would be a year of efficient. He could have said the same thing for any major firm in the media business. With the economy turning sour and content and innovation losses mounting, the emphasis among big tech giants is now on good housekeeping.

'Efficiency', shorthand for job cuts, axed shows and innovation write downs, is just one part of the unfolding narrative. The media industry has a claim to be the media industry slogan for the year 2023. The top priority for the board this year is to remember that the business is all about squeezing extra cash out of consumers and making intellectual property sweat.

The move to restrict password sharing is a high-profile attempt to improve monetisation of its eye-watering expenditure. The streamer is expected to experience a short-term consumer backlash before reaping the rewards of additional subscriber revenues. Analysts will be looking for improved margins in the back end of the year after the introduction of the ad-supported tier.

Peacock decided to scrap its free entry tier for new subscribers. Peacock was a pioneer in the shift towards lower cost ad-funded streaming tiers and proudly announced that it was free as a bird. It looks like the chickens have come home to roost. Like its main rivals in the streaming business, the future for Peacock is a hybrid model, where subscribers at the entry level pay a monthly fee while also having to put up with interruption from ads

The stories are part of a larger move to make more money. Consumers in the Netherlands are seeing price increases to their streaming subscriptions. Sky's Now platform in the UK has just announced plans to increase prices on some packages in February of next year. With rampant inflation, platforms have little room for maneuver, even though they are taking a risk that consumers might choose to leave.

There are other parts of the monetisation puzzle. The news coverage this week focused on the willingness of premium content owners to forge flexible business models to grow their revenues. It looks like the idea of streaming platforms being exclusive and rarified looks like a broken flush. Adding ad-supported tiers, integration into pre-existing platforms, openness to content rights sharing and an increasingly flexible approach to programme distribution are all signs of a new mindset.

David Zaslav acknowledged all of the above. WBD still has grand ambitions for its soon to be unveiled global streaming platform, but the canary in the goldmine was a distribution deal at the end of last year.

The market has seen WBD cozy up to Amazon Prime once more and launch a full frontal attack on the FAST market with a portfolio of new WB TV branded channels. Companies are doubling down on the realities of generating return on investment.

A spirit of collaboration

This theme is extended by other stories this week One of the manifestations of the race to prioritize monetisation is the new alliance between Starzplay and Watch IT. The decision to join the UK, Ireland, and LatA m platforms was similar to the one made by Lionsgate.

The news of an enhanced partnership between Fox Entertainment and Disney-owned Hulu was eye-catching this week, and is a key feature in this regard. The new partnership between Disney and Fox can help Disney control ballooning content costs while saving Fox the bother of launching its own streaming service. There is something quite old about the fact that Fox is travelling to a Disney-backed streamer at the same time that Warner content is going to Fox.

For Rob Wade, CEO of Fox Entertainment, the long-standing partnership with Hulu creates an important pathway for our series to maximize viewer reach. The new deal will allow Fox to better serve audiences and bring visibility to premium content on its platforms.

The shift towards a more flexible partnership-led business model is likely to be more sustainable than constant subscription increases. Death by a thousand price hikes increases the risk of piracy and cherry-picking and can be justified on the basis of inflation.