Internet is a distruptive force changing media landscape. Fast broadband connections are becoming common and distributing even high-definition video content online is becoming a viable alternative. Reaching the masses in the continuosly evolving environment is no easy task. In retrospect we have found that the portal, content and authentication are the three most crucial things a service provider must get right for service to fly.
The most common misconception is that a portal is just a branded graphical user interface to the service. However for an online content service this interface is a manifestation of how they do business. All the business constraints and value-creation logic must be interpreted as business rules that are acceptable to the customer. Successfully communicating the value proposition is of enormous importance since the service might not even have a physical customer service or retail presence anywhere. Understanding how users want to interact with a service is the single most important thing in building an online content service.
It may all sound relatively simple in theory, but creating personal entertainment experiences is no easy task. Tailoring a service to customers’ needs requires knowledge of personal preferences and representative demographic’s viewing patterns. Creating a compelling experience to all customers from the start is inherently hard. Starting out there is no information of past purchases and negotiating for content rights will be costly and time-consuming.
Understanding intuitively what content will be attractive and serving a global audience are the only two possible shortcuts. However in the long haul to run a profitable service the operator must be able to consistently surpass the expectations. Every time the service is used there must be something new available. Failing to deliver once on the promise makes luring customers back in impossible.
Letting customers come to you by recommendations is a slow, but effective marketing strategy for a self-publisher. It can only work if you minimize the distribution costs and do not have to invest in the global distribution rights for the chosen niche content. The tricky bit is that setting the price requires a thorough understanding of the product’s value ie. quality and price. Being able to match these two qualities for each customer really gives a players an ace up their sleeve.
Video content is not just starting to slowly seap out of other distribution channels, but content also authored directly for the net. Being able to adapt is thus of utter importance. Investing in producing the wrong content may be a fatal mistake to a player starting out. Taking the guess-work out of the equation requires building analysis tools right into the distribution platform.
Most audio-visual content is still consumed in the living room. Creating a home eletronics device and being able to sell it requires tremendous amount of trust from the customer towards your offering. While the cost of the device offers a chance of tying a customer and locking them in to the service it is also a huge risk factor. The device might not work as it should or there might be delays in manufacturing. Instead of tying the service to just one platform, an open solution is the right way to go.
While music industry is at least partly moving to a DRM-free distribution there is no signs of equal pressure in Hollywood. Currently myriad of rights protection technologies are used on top of open interfaces, but importantly open device platforms do offer both a protected and constrained ways to deliver content. Choosing between different options will depend on the rights holders and geographic location. Since DRM systems require a method to identify users the selection will also affect how customers’ will be authenticated.
In an online environment even if the content was advertisement-funded and were to be distributed free of charge authentication would be necessary. As complicated as it sound to fully fill the customers expectations of personalization each user, not just the device, needs to be identified. Authentication is really the most important enabler to all online business. Investing in a custom system will not be wise and the most important criterion for selecting one are a well-established user-base and a global reach.
The video services market is undergoing tremendous changes and meanwhile there are no monopolies there is still a window of opportunity. Understanding the fundamental laws explained in this post will help a lot in developing a video aggregation business. To learn more it would be a good suggestion to benchmark other industries. For example looking for solutions for portals, content and authentication in the video games business would be a great idea. Analyze the inner workings of a competing service provider and where they are on the learning curve just by going to their portal. You know what to look for, so now you keep afloat when the floodgates open.