Insights: Strategic Priorities in Media and Entertainment

Chapter 6.

Technology Investment and Emerging Revenue Models: Building for Future Growth

As content inflation continues to rise and technology cycles accelerate, media organisations face critical decisions about where to invest their limited resources and how to develop new revenue streams beyond traditional models. Our research reveals how leading companies are evaluating technology investments with greater discipline while exploring innovative approaches to monetisation that extend beyond subscription and advertising.

Evaluating Technology Investments

Angus Mitchell from Channel 4 describes their approach to technology investment decisions: "When evaluating potential investments, market demand is crucial. We talk extensively with our customers about how we can help them and where they're heading. With the growth in our digital business, first-party data and partnerships with data providers have become increasingly important."

Their methodology emphasises real-world testing: "We test viability through small closed tests or soft launches with selected brands and advertisers. We typically look at a 3 to 5-year horizon for return on investment." This disciplined approach ensures that technology investments deliver measurable business outcomes rather than simply chasing innovation.

Our poll data indicates that "customer satisfaction" and "revenue per user" are the metrics most influencing technology investment decisions, suggesting a shift toward business impact rather than purely technical considerations. When considering implementation approaches, media companies show a strong preference for "strategic technology partnerships" over building capabilities in-house.

Marco Berkheij from Red Bee Media emphasises this partnership approach: "The technology lock-in concern is a significant industry challenge. Many broadcasters are attempting digital transformation while dragging along legacy systems, which is comparable to changing the wheels on a moving bus. The ideal approach would be to build something entirely new alongside existing systems and then perform a complete transition, but budget constraints often make this impossible."

This explains the growing demand for managed services and technology partnerships. Berkheij continues: "Content owners are recognising that outsourcing technology operations to specialists allows them to remain agile while focusing on their core strengths. Several large media companies are currently transitioning to this operational model, essentially pushing the reset button on their technology strategy."

Channel 4's approach to technology partnerships illustrates the potential benefits: "Our approach to technology involves partnering with companies at an early stage of development. This allows us to shape the product evolution and ensure it becomes genuinely fit for market purposes. The primary advantage is gaining early access to innovation, while challenges typically emerge when partners undergo significant changes or when our requirements evolve beyond their capabilities."

Emerging Revenue Models

Beyond the established hybrid models of subscription and advertising, media companies are exploring innovative approaches to monetisation that leverage their unique assets and capabilities. Richard Huang from BBC describes the evolution beyond traditional advertising: "Looking ahead, I believe there's potential to transform the advertising experience into a genuine benefit rather than a negative. Amazon could leverage their commerce capabilities so viewers who see something relevant in an ad can immediately purchase it through the app or via voice assistant."

Angus Mitchell shares Channel 4's exploration of commerce opportunities: "We're also exploring e-commerce opportunities. During the pandemic, we observed a significant acceleration in e-commerce adoption. We've conducted tests with shoppable advertisements, such as implementing QR codes in Jamie Oliver's Air Fryer Meals programme, enabling viewers to purchase the featured products directly."

Daniela Boquete identifies an emerging trend in viewer engagement and loyalty: "I anticipate loyalty will be better rewarded by streaming services, as engagement becomes an increasingly key metric. People who spend more time on a platform or share it with friends might receive benefits or special offers, similar to retail rewards systems. Though this approach hasn't been widely adopted in streaming yet, as the industry matures and margins tighten, implementing such programmes seems a natural evolution."

Free Ad-Supported Television (FAST) channels represent another approach to monetisation. Marco Berkheij explains: "FAST channels provide an opportunity to generate additional revenue from existing content libraries. For instance, in the Netherlands, a company holding rights to The Smurfs can launch a 24/7 FAST channel with that content, interrupted by advertisements every 15 minutes. Even if it generates modest revenue – perhaps just €1,000 monthly – it creates value from content that would otherwise remain unused."

Daniela Boquete envisions more fundamental changes to platform architecture: "Decentralisation and blockchain-powered streaming will become increasingly important, particularly for rights management through smart contracts. While this technology is likely still a few years away, I'm researching and building these solutions because they address significant industry challenges."

She continues: "The key questions are whether this technology will help media companies, rights management professionals, production teams, talent, or creators increase fairness in payment, or help users reduce service costs through a more efficient supply chain. Large companies typically don't have the bandwidth to address these specific solutions, which is why focused startups combining industry knowledge with technical expertise and legal understanding will likely drive innovation in this space."

Facing unsustainable content inflation, major platforms are diversifying beyond their core offerings. Richard Huang notes: "Beyond advertising, we're seeing interesting diversification. Disney is now open to distribution deals on their archive content after initially taking everything exclusive, Netflix is experimenting with gaming, and Disney has invested in Epic Games. This experimentation is necessary as content inflation reaches unsustainable levels."

For organisations evaluating technology investments and new revenue streams, success depends on several key factors:

  • Maintaining strategic flexibility while avoiding technology lock-in
  • Developing partnerships that provide access to innovation without requiring internal expertise
  • Exploring monetisation approaches that align with audience behaviours and expectations
  • Leveraging existing assets (content libraries, audience data) in new ways
  • Balancing experimentation with disciplined evaluation of business outcomes
  • Preparing for longer-term structural changes in platform economics

The future of media monetisation will likely combine elements of traditional models with innovative approaches that create value beyond just content delivery. The organisations that navigate this landscape most effectively will maintain flexibility in their technology choices while pursuing revenue models that align with their unique audience relationships and content assets.

Key Insights Recap

As content inflation continues to rise, media organisations face critical decisions about technology investments and new revenue streams. Leading companies are evaluating technology with greater discipline while exploring innovative monetisation approaches beyond subscription and advertising.

Quick Action Guide

Key Insights Recap

As content inflation continues to rise, media organisations face critical decisions about technology investments and new revenue streams. Leading companies are evaluating technology with greater discipline while exploring innovative monetisation approaches beyond subscription and advertising.

Quick Action Guide

Connect with us and let's shape the media's future together.

Globant is a digitally native company that helps organizations reinvent themselves and unleash their potential. They bring innovation, design and engineering together at scale to create impactful solutions. Globant specializes in digital strategy, design, and development, leveraging cutting-edge technologies and trends. With their agile pods methodology and commitment to innovation, Globant is a trusted partner for top brands looking to lead their industries in the digital landscape. They create digital transformations using disruptive technologies like AI, blockchain, and cloud computing. Major clients include Google, EA, and Disney. Globant bridges the gap between design and engineering to develop innovative software products. Overall, Globant helps global organizations reinvent themselves digitally.

Globant-UK@globant.com

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