When OTT video streaming emerged as a business model in the late-2000s, content sellers quickly recognized the potential to establish new revenue streams through distribution deals with platforms like Netflix, Hulu, and Amazon Prime Video.
With hopes of capitalizing on that potential, and predicting that OTT streaming companies would operate quite differently from traditional linear MVPDs, many content sellers chose to keep their linear media operations teams while establishing new internal teams across multiple functions (e.g. sales, data & analytics, legal/compliance, and finance/accounting teams) focused exclusively on managing OTT distribution.
But fast-forward to today and many of these same content sellers are moving to combine their once-separated linear and digital teams and create unified media operations teams that can efficiently manage and maximize both traditional linear and digital revenue streams. For example, we know that the merger between Showtime and Paramount+ involved combining linear and digital operations teams. AMC Networks also announced this year that it would merge its linear and digital sales teams.
Keep reading to discover why media companies are undergoing this unification effort and the benefits and challenges associated with integrating linear and digital media operations.
Why content sellers are unifying linear and digital operations
First, content sellers have realized that while OTT and linear distribution deals and data can look quite different, the underlying processes used to manage them are often quite similar.
While linear distribution deals typically have relatively standardized payment terms and data sharing expectations, OTT distribution does present several unique challenges to traditional teams. OTT distribution deals are often characterized by a shorter licensing window, more diverse payment terms (e.g. flat fees, revenue sharing, pay-per-engagement, guaranteed minimums, etc.) and varied data sharing requirements. But despite these differences, content sellers are now seeing that similar license management, compliance, and financial workflows can be used to manage both revenue streams.
Second, when linear and digital media teams are siloed, each group has a vested interest in maximizing its own revenue streams. This invariably leads to conflict between linear and digital media teams over how and where media assets should be distributed. Digital teams might push the narrative that OTT is the future and everything should be moving to digital, while linear teams might recognize a stronger need to preserve revenue by deepening partnerships with traditional MVPDs and keeping assets on linear TV.
A third reason for unifying linear and digital media operations has to do with the financial pressures content sellers are feeling. Profit margins are being compressed across the media industry, so even enterprise-level media companies can no longer afford to have entirely separate teams for linear and digital media operations. Consolidating linear and digital sales, rights management, and finance/accounting teams can result in greater operating efficiency and significant cost savings for content sellers.
Benefits of unifying linear and digital media operations
1) Streamlined media operations workflows
Hybrid distribution is not going away. Unifying linear and digital media teams empowers content sellers to streamline licensing negotiation, agreement management, data analytics, financial management, and other media operations workflows. Combining digital and linear media operations into a single department helps reduce duplicate efforts while eliminating data silos and driving operational efficiency.
2) In-sync goals and priorities
It’s easy to see how linear and digital media teams can come into conflict. Both teams may want to control distribution for as many assets as possible so they can earn more revenue and demonstrate their value within the organization. This can lead to zero-sum thinking where distribution successes on one side are seen as a loss for the other.
Unifying linear and digital media operations eliminates conflicting goals and priorities by creating a single team that’s aligned with the seller’s core objective: maximizing long-term overall revenue across all distribution channels.
3) Diverse media expertise
Another benefit of unifying linear and digital media operations for content sellers is the opportunity to leverage diverse media expertise across all content distribution operations.
Integrating teams gives the most skilled data analysts, compliance experts, and media finance professionals from both linear and digital teams the opportunity to multiply their impact on the business by touching all media distribution channels – not just linear or digital. Team members who previously worked in separate teams will have the opportunity to collaborate, exchange expertise, and innovate new ways to maximize distribution revenue.
4) Reduce operational costs
Unifying linear and digital media teams is helping content sellers reduce costs in response to tightening profit margins across the industry. Combining linear and digital teams can help drive down staffing costs, management costs, and office overhead while allowing for resource consolidation or economies of scale on things like software technology and data storage.
The road ahead: challenges and opportunities
Aligning long-term media distribution strategies
Unifying media operations gives content sellers the opportunity to better align long-term media distribution strategies, but there’s still plenty of room for debate around how those strategies could look in practice.
Advocates for OTT will want to focus on digital distribution and leverage the rise of FAST platforms to access bigger audiences for valued content assets. On the other hand, advocates for linear may be searching for ways to preserve MVPD relationships and revenue with exclusive distribution agreements for those same assets. As the industry continues to evolve, content sellers will need to think carefully about which channels can help maximize both short-term and long-term revenue.
Balancing stability with agility
The long-established business model for traditional linear distribution is highly consistent and standardized across all touchpoints (e.g. licensing, analytics, finance, etc.), while business models for OTT streaming are continuously evolving and highly variable in comparison.
To maximize both revenue streams in the long term, unified media teams will need to operate in two modes: a “conservative” low-risk mode that adheres to the established processes for managing linear distribution, and a “progressive” mode that’s open to experimenting and embracing risk with new opportunities in the digital space.
Consolidating linear and digital media technologies
As linear and digital operations teams join forces, they will need to streamline operations by consolidating the software tools and technologies used to manage license agreements, store and analyze data, and maintain financial records.
Previously siloed data from linear and OTT distribution partners should be integrated into a single data store where it can be analyzed together. Licensing management tools and financial systems of record for linear and digital distribution should also be combined to streamline workflows and reduce costs. To achieve these goals, organizations will need to overcome the lack of common metrics across distribution channels and implement a holistic analytics strategy to transform linear and digital data into actionable insights.
Streamline linear and digital media operations with Revedia
Revedia empowers content sellers to streamline and automate every aspect of media operations – from data management, to content valuation, licensing compliance, and financial reporting. With Revedia, content sellers can aggregate and normalize data from linear and digital distribution partners, then leverage that data to detect revenue leakage, measure audience trends, compare and predict content performance, and maximize distribution revenue.
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Schedule an interactive demo of Revedia and see how our data intelligence platform can help your media operations teams streamline both linear and OTT distribution workflows.