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How Local Media Can Monetize OTT

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Read the complete transcript of this clip:

Susan Bell: 

When looking at local media, which is what we concentrate in, that client-side, server-side, all that stuff is a huge challenge right now with revenue. So there's still a lot of local media, I'd say most right now, that are still looking at a very traditional type of advertising, which is client-side. We have our digital technology which is pre-roll, mid-roll, post-roll, that all works in the live linear stream itself, we've seen a lot of creativity, and Derek can do this. We have clients that are actually using the WideOrbit system, and they're just trafficking in their own linear channel, differently from their on-air broadcasts, and they're like, "We can do it that way while the industry figures this out." You know, one of the challenges with revenue is that, during the opening presentation with Hulu who mentioned this, is that we don't have a industry-wide adoption of digital live streaming for markers, right? So, and if you don't believe me, go talk to a broadcast engineer and ask them what they think about SCTE markers. So to really achieve the DAI that everybody's kind of expecting, we've got to figure that out, so, and we will. The industry'll get there, but right now, those client-side sponsorship models, you know, when you first launch your OTT channel, you don't have an audience, right, if it's brand new. You need to be able to make money on it right away, so kind of that two-tier process, what is my out-of-the-gate revenue plan, which may be very TV-like, bundle the products with sponsorships and stuff, and then how am I going to monetize this as my audience grows?

Derek Gebler: Right, so there's a point when you're able to evaluate, okay, now that we've started off and we've built up the audience, can we switch it to pulling in other networks, can you sell on a CPM basis at that point. That's the big jumping point, and a lot of local stations still are, the traffic size can't justify that yet, but with service-side ad insertion, that starts to increase their inventory on a live stream, and you're not just talking about one pre-roll now, now you're talking about how many of them can you get in the middle of an entire stream. Can you string all of your VOD hooks together, and then run ads in between those? So, that's been opening up the market, but, yeah, there's some tactical side of things, yeah, and there's a lot of smart people figuring out how to do that, but at the local side, a lot of the trigger mechanisms are still a basic switch that's on, off, and it's a GPIO, and you can fake it, but eventually with the SCTE markers, there's a lot of additional metadata, right, you can tell about, okay, we're going to commercial and it's two minutes long. Just knowing the length of it would be really helpful ahead of time, but it's hit or miss, and it's a upgrade for every station to get up to that system. Not everybody has that right away.

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