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Open source, Mobility, Freemium: Requisites for Digital Revenue Generation

Open source, Mobility, Freemium: Requisites for Digital Revenue Generation

Author | Noor Fathima Warsia | Wednesday, Apr 14,2010 8:27 AM

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Open source, Mobility, Freemium: Requisites for Digital Revenue Generation

A key agenda for the global digital fraternity is how to monetise audiences and generate revenues from digital platforms.

The Digital Think Tank series at MipTV 2010 organised a discussion on ‘Dual Revenue Stream: The value of online content’. The speakers included Patrick Walker, Director, Video Partnerships, YouTube; Simon Danker, Director, Digital Media, BBC Worldwide; Jonathan Milne, Senior Director, Sales & Operations, Ooyala UK; Egor Yakovlev, CEO, Tvigle Media, Russia; Steve Nuttall, Group Commercial Director, BSkyB and Johannes Larcher, Senior Vice President - International, Hulu USA.

The panel discussed that while advertising on various digital platforms was increasing, it was important to delve on various kinds of revenue generation models for each platform to be able to generate revenues.

Patrick Walker cited the example of some of the work done on YouTube, and explained that one couldn’t place TV ads on internet and expect magic. He said, “Think your online strategy carefully, and it has to have three main legs -- experiment, embrace the user and engage him.” He informed that YouTube has been testing pay models and rental concept through some of their initiatives like Sundance. The company’s experience has been that users were looking for this kind of content on the platform. He informed that YouTube was looking at this kind of partnership with various companies and operated on a revenue share model for that. He explained that in 2009 alone, YouTube’s partnership revenues had doubled.

Simon Danker observed that one of the key areas to watch out for was to stay relevant to the user and one way of doing that by being able to embrace all three platforms. He said, “More and more content is available for free on the digital space every day. This mixed economy is going to the way of life. We love subscription models, we are doing great numbers on our iTunes partnership. Our content can fit in virtual content shells but the challenge is how we raise content to the top and then raise money, and in that I would say portability is key.”

Jonathan Milne explained that broadcasters needed to be nimble footed to be able to deal with the current scene when most of the media companies aren't clear what their business models are.

Egor Yakovlev added that the in current stage of market development, to be able to develop successful models and creating right content was not enough, the overall package needed to be revisited and worked in a way that would take a company forward. He informed that for them, subscription was around 10-15 per cent of advertising revenues.

BSkyB on the other hand was the complete opposite. Steve Nuttall informed that for BSkyB advertising was only 10 per cent of its revenues and the rest was coming from other revenue streams including subscription. He asserted that the company was constantly exploring new kind of revenue streams, and digital played a key role in that. From using mobile devices for news channels to other forms of digital, the mantra was to give the consumer good value. He noted, “When the consumers’ demands are identified and satisfied, you can grow.”

Johannes Larcher, though stated that Hulu was not looking at subscription for a while, added that subscription could unlock more content. He said, “Our mission is to provide premium content to our users at any place and any time.”

The panel discussed that on the digital space, piracy had to be seen as a market signal of where the demand was and what the opportunity in that could be. While it appeared that “smaller guys” made it big on the digital frontier, increasingly the market is changing such that the smaller guys have some bigger guys behind them. Many are experimenting with digital but the bigger monies are coming in now, and that would show results for all.

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