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Building a Strong Media Revenue Operations Team in 2023: Essential Skills and Tools

06.21.2023 | Ray Gilmartin
 

The media distribution landscape is continuing to evolve in 2023, with new distribution and revenue models, a growing number of distribution platforms, and the ongoing shift from traditional linear to Over-The-Top (OTT) media distribution. We’re also seeing the emergence of new software technology and products aimed at helping media companies maximize distribution revenue and streamline media finance workflows.

For M&E executives tasked with building and managing media finance teams within their organizations, responding effectively to these changes means recruiting media finance professionals with the right skills for the shifting environment, choosing the right software technology to support them, and implementing the right processes to minimize costs and maximize output.

In this blog, we’re sharing our best hiring tips to help M&E executives build efficient and high-performing media finance teams within their organizations.

 

OTT distribution is disrupting linear media finance workflows

The rise of OTT media distribution is radically changing how M&E companies manage financial operations. This is true for both OTT-native businesses that distribute content exclusively on OTT platforms, and for businesses in a hybrid model that manage distributor revenue from both linear and OTT sources.

Here are just a few ways that OTT media finance workflows differ from linear workflows:

1) Complex and non-standard licensing agreements: The terms of linear media distribution are typically governed by stable, multi-year content licensing agreements with the same partners. Agreements are often renewed with little or no negotiation by either side. But with OTT distribution, we’re seeing longer and more detailed agreements with more complex rate calculations, shorter and highly variable licensing windows, and a rotating cast of partners.

2) New and varied data sources: The financial data that media finance teams receive from linear distribution partners is used to process month-end close-outs, report financial results, and forecast revenue. It’s predictable and largely standardized between distributors. But with OTT distribution, M&E companies now have a larger number of distributor partners sharing highly variable and non-standard data sets in a variety of formats. The challenge for media finance teams is to organize, process, and analyze this data to drive the organization’s business strategy.

3) Content-centric vs. distributor-centric revenue: Linear media distribution follows a distributor-centric revenue model where content sellers earn a negotiated rate multiplied by the distributor’s total number of subscribers. However, OTT distribution follows a content-centric revenue model where compensation is based on the specific performance (e.g. total viewership, transactional/ad dollars generated) of individual media assets. As a result, media finance teams must value each individual piece of content as an owned asset whose value can be strategically maximized.

The projected growth in OTT TV and video revenue implies that most media companies will need to adjust to hybrid or OTT-exclusive distribution in the coming years.

For specific tips for linear media finance tips adjusting to OTT workflows, see our blog post on 4 Digital Media Finance Tips for Linear Finance Experts.

With licensing agreements growing in complexity, data coming from a growing number of sources in non-standard formats, and revenue data being reported at the more granular content level, media finance professionals need a more data-focused and software-literate skill set to make sense of this data and effectively analyze it to drive business strategy.

Below, we highlight five skills that M&E executives should look for when hiring media finance professionals for this new environment.

 

Five must-have skills for today’s media finance professionals

 

1)   Data focus and analytical skills

OTT platform data includes valuable content performance, user engagement, and financial data that can be analyzed by finance teams to drive financial forecasting and planning, cost management, and revenue optimization.

Today’s media finance professionals need strong data analysis skills to make sense of the complex and variable data sets that content sellers receive from their OTT distribution partners. They must be able to think critically about M&E data, analyze it using modern tools, and translate their findings into meaningful business advice.

 

2)   Financial modeling skills

With the growing availability of content performance and financial data from OTT platforms, data-driven media finance teams are using financial modeling to forecast the revenue performance of specific media assets, or the entire organization’s revenue performance, under a variety of production, distribution, and investment scenarios.

Media finance experts today need exceptional financial modeling skills to build accurate models that can predict the answers to questions like:

  • Which distribution platform(s) can provide the best revenue performance for a specific video asset?
  • How much revenue drop-off is expected for a specific video asset on a specific distribution platform over a specified timeframe?
  • What type of content should the organization produce or acquire? What type of content will bring the most revenue?
  • How would a change in distributor partnerships impact revenue performance?
  • How would changes to one or more licensing agreements impact revenue performance?

Financial modeling combines accounting and software skills with data analytics to produce reliable forecasting that can drive impactful changes to the organization’s content production, acquisition, distribution, and revenue optimization strategies.

 

3)   Synthesizing complex data for executive audiences

Media executives want and need to make data-driven decisions towards revenue optimization, but may not possess the technical expertise to interpret the raw data themselves. Instead, they depend on media finance teams with the right skills to view the data, search for patterns, trends, and correlations, extract insights, and build visualizations that drive home the key findings.

 

4)   Software literacy

Digital transformation has been slow for M&E companies, and most media finance teams still depend on legacy applications like MS Excel for revenue management and forecasting tasks.

But for the next generation of high-performing media finance professionals, maximizing the value of M&E financial data will require strong software literacy and a working familiarity with innovative SaaS tools that can help streamline data management workflows, analyze and visualize data, and automate key financial management tasks.

 

5)   Collaboration

As media finance becomes increasingly data-driven and dependent on software technology, media finance teams will need to work more closely with IT across a variety of initiatives.

M&E companies should search for new media finance hires with strong collaboration skills, who can effectively partner with IT to smooth the adoption of new media finance software tools and implement data integration/reporting and systems enhancement initiatives.

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Before you hire:

3 Strategies for optimizing your media finance department

When it comes to optimizing your media finance team, hiring people with the right skills is just one piece of the puzzle – you’ll also need the right processes and technology to set your team up for success. Here’s what to think about before you start the hiring process:

 

1)   Optimize data workflows

Media finance teams depend on financial and revenue data from a variety of sources to perform their roles effectively. That includes both internal data from CRM, billing systems, and other sources, as well as content performance and financial data from distributors.

But before media finance teams can make use of this data, it needs to be centralized in a system of record, cleaned to fix any errors or anomalies, and normalized to prepare it for analysis. M&E executives should think about how they can streamline these essential data management workflows to give their finance teams timely access to data and accelerate the development of insights.

Thoroughly examining one’s data workflows can often reveal inefficiencies that may need to be addressed before onboarding new staff members.

 

2.   Invest in modern SaaS solutions

Implementing modern software tools and technologies is a high priority for M&E executives seeking to maximize the impact and efficiency of their media finance teams.

Modern SaaS tools like Revedia can have a massive impact when it comes to streamlining finance and accounting workflows. Revedia acts as a system of record for tracking all revenue streams related to media distribution, allowing media finance teams to streamline and automate data ingestion, normalization, revenue modeling, reporting, and audit tasks.

 

3.   Don’t underestimate the importance of futureproofing

While you shouldn’t expect AI to directly take over media finance functions just yet, newer SaaS products can allow smaller teams to operate more efficiently and accomplish much more in less time compared to 5-10 years ago.

For example, Revedia Digital can streamline financial auditing by automatically detecting payment anomalies – but you’ll still need your finance team to investigate those findings and initiate next steps. Look at what functions can be done more efficiently with SaaS solutions today, then ensure your team is ready to leverage the continually developing AI capabilities of those tools in the future.

 

Power your media finance team with Revedia Digital

Media finance professionals need more than the standard accounting and risk assessment skills to maximize their organizational impact in 2023 – that’s why it’s critical for M&E executives to start building media finance teams with the right skills to operate in this new paradigm.

the datasheetRevedia Digital is a SaaS-based data intelligence platform purpose-built to support the content licensing, data management, and revenue operations needs of modern M&E companies. In addition to automating data ingestion and normalization to accelerate data availability, Revedia Digital streamlines critical finance tasks like auditing, reporting, and month-end close-outs, so media finance professionals can accomplish more with less and spend more time on revenue optimization.

Check out our blog post Introducing the All-New Revedia Digital Platform for a more in-depth look at the power capabilities offered by Revedia Digital.

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