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VDMS: Content and Subscriptions Alone Won't Sustain the Industry

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When every subscription video-on-demand (SVOD) service has similar content, how can any of them stand out? That was the question posed by Peter Gallagher, chief operating officer for Verizon Digital Media Services (VDMS), speaking in a fireside chat during the New York Media Festival's Future of Television conference.

"I think SVOD is too generic a term right now. It does need to evolve," Gallagher said. Content can't be the only way to build an audience; properties need to appeal to potential members in other ways. Gallagher highlighted the success gaming properties are having by bringing in online personalities and appealing to their fan bases. Services can drive a lot of traffic by creating relationships outside of content deals.

Gallagher highlighted crucial issues for an industry in flux. One key area is monetization and consumers' relationships with ads. Subscription services can't rely on subscriptions alone, he said, and will need to augment with ads. But they need to be careful, ensuring that their ads don't become intrusive. Consumers understanding of the role ads play in bringing them content will need to evolve, so viewers become more accepting of ads. "The model here is still maturing," he offered.

While VDMS has made its name delivering high quality video at scale, that's still the area that keeps Gallagher up at night. "The technology is still maturing in this industry," he said, and online viewers expect a TV-like experience. It's easy to build a content pipeline, but content providers need to be able to scale from thousands to millions of viewers in minutes, and that makes him nervous. "What consumers expect is that type of quality experience," he said. "They just want it to work like television."

Finally, for anyone still confused by the name change that took place recently with Verizon properties, Gallagher offered an explanation: "Oath is a house of brands," he said. It's an umbrella organization (holding AOL, Yahoo, Huffington Post, and more) that's meant to solve problems of distribution and monetization. We'll all get used to it eventually.

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