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How Can SVOD Survive and Grow?

“Is this the moment we've reached that peak in the traditional business model?” asks Chris Pfaff, CEO, Chris Pfaff Tech Media, Producers Guild of America (PGA), VR AR Association (VRARA). “Is this where the creativity and the shift come in without throwing down mega billions like Netflix has?”

“Many of us who [have] sat in those rooms when you're in the process of green lighting shows and you're looking at overall budgets, everybody just says, ‘make more hits,’” says Paul Pastor, Co-Founder and Chief Business Officer, Struum. “And you're like, if it was just that simple, of course, we could do that! Right?”

“Why didn’t I think of that!?” Pfaff jokes.

“If we all understood what was going to be a hit from the moment it's an idea until its execution…there are very few people who are that level of genius, right?” Pastor says. He notes that business models are now maturing towards more targeted/smarter programming approaches based on complex audience data, and the age of the “mega-hit” mindset may be ending. “With the amount of data they have available, they can be smarter about the things they like to green light and how certain genres will play to certain cohorts,” he says. “But [they can] also build secondary cohorts and tertiary cohorts that drive the appeal and can drive the retention and drive that engagement and drive that monetization.”

Pastor highlights the ways that recent major consolidation trends have bundled a wide range of content categories all aimed toward different audiences. “So you can take a Paramount, for example,” he says. “Which has Paramount Plus, it has Pluto, it has BET Plus. You can maybe draw the same example with NBC Universal.” However, he notes that there is not yet a very cohesive way to maximize audience value across all of these disparate content offerings. “You have all these people who built these products that don't have a shared data platform,” he says. “[They] don't have shared data structures to be able to actually manage the entire lifetime value of the consumer across all the product offerings they have, and so I believe that we're going to see an investment cycle driven by what are cloud-based workflows, but also a consolidation in their platforms and data structures to help them figure out how to ultimately deliver the value at the consumer they're looking to attract.”

The future of SVOD may boil down to super-customization, Pastor says. Even AVOD and FAST have the potential to become much more user streamlined. Which customers have a tolerance threshold for watching three commercials in a row and which are fine with watching five in a row? “So I think that's really where we're headed on a macro level,” Pastor says. But he emphasizes: “It's going to take a lot of work in the interim to get there and build those data structures and those platforms able to support those types of environments.”

Learn more about the future of SVOD at Streaming Media West 2022.

Watch full-session videos from Streaming Media Connect 2022.

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