How NBCU and Chicken Soup for the Soul Have Evolved Their Monetization Strategies
What are the best approaches to maximizing content monetization within the rapidly evolving streaming market? Evan Shapiro, CEO, ESHAP, discusses this topic with Matt Farina, Senior Vice President, Content Distribution, NBCUniversal, and Philippe Guelton, CRO, Chicken Soup for the Soul Entertainment, in this clip from Streaming Media Connect 2023.
Shapiro begins by asking Farina about NBCUniversal’s recent shift from essentially free content offerings. “For new subscribers, you’ve moved to all paid, but varying prices with ads, right?” he says. “So how do you think Peacock, in particular, is positioned, given all of the inputs from the consumers that we just saw? And then when you think of NBC Universal's distribution strategy writ large across all the properties that you're offering, how do you feel like the company is situated with regards to this very complex set of points of view that the consumers are bringing to the table?”
“What's clear is that consumers still really want access to professionally produced content, but the distribution model has changed,” Farina says. He breaks down the advantages that NBCUniversal has regarding widespread distribution methods. “I think we have all the pieces,” he says. “We have a very healthy scaled traditional pay TV ecosystem that we still distribute our content on, and we still value those partnerships and relationships. And there's a lot of people watching content on that platform. But for folks who are interested in watching in a bit of a different way [such as] on demand, we have a Direct to Consumer (DTC) offer. And Peacock is really well positioned because we have this dual revenue model where there's a subscription fee but also an ad fee…you're seeing some of our peers follow suit now with the ad-supported model. In order to sort of sustain the premium content model, the dual revenue model I think is really where we need to be.”
Farina also emphasizes the benefits of having multiple platforms for NBCUniversal’s content offerings. “For folks that just want to lean back and have a more casual experience we have a FAST and AVOD business,” he says. “And for us that's really interesting because now we have content getting a second, third, and fourth window behind its initial release.”
Shapiro turns to Guelton for his thoughts on the ways that Chicken Soup for the Soul’s approach differs from NBCUniversal’s, especially regarding their very different beginnings. “Unlike NBCUniversal, which started basically with one set of linear properties that they kind of built everything out from, you actually started with an AVOD property in Crackle and then really built around that,” he says. “When you talk about the stack that you have, everything from Crackle to Redbox to the TVOD that you have in between, how do you talk about your stack?” he asks. “And then how do you see it positioned in the same ecosystem that Matt was just talking about, where the consumers have a really wide and varied set of inputs on a monthly basis?”
Guelton says that, like NBCUniversal, Chicken Soup for the Soul Entertainment is also in an advantageous position considering the variety of methods they currently have to distribute content. “The way we talk about it is all those consumer touchpoints that we have and providing viewers options to watch content in many different ways,” he says. “Different formats at different times at different prices as well, so they can choose when and where to watch Avatar, for example. It will come out soon on our DVD rental business and then on our TVOD platform. And then AVOD will be much later. We especially want to serve value-conscious consumers – we're not in the SVOD business. That's actually the only model that we don't have today.”
“But you sell to the SVOD players,” Shapiro says.
“We do,” Guelton says. “Because we have a studio business, we have a movie and TV distribution business, and we have our own platforms. But Redbox is really interesting because it brought additional channels like FAST…we have a FAST platform with over 160 channels, both ours and third-party channels and TVOD, which is a way to provide consumers an early peek at content right before it gets to SVOD event platforms. And it's a great way to attract consumers, too.”
“That’s ad-free,” Shapiro says. “You buy that kind of traditional model…”
Guelton continues to outline the ways that each content delivery method can serve to direct users to other ways of watching programming. “Interestingly, for example, we may have some movie movies where we have both AVOD and TVOD rights, and we offer both options to consumers,” he says. “And guess what? It actually increases TVOD rentals because consumers can actually sample the content on the AVOD side. They don’t have to commit right away and buy the movie, and then just as likely they actually switch and say, ‘All right, let's buy it and kill the ads for the next hour. Then, of course, the Redbox kiosks…a lot of people were wondering, ‘Why would you want to rent DVDs these days?’ And I would say on top of serving certain communities of viewers who need that…”
“For tens of millions of homes,” Shapiro says.
“We're renting out millions of DVDs every month,” Guelton says. “It is an amazing source of First Data because we have all these registered users…they’ve got to swipe their credit card. [We’ve] got 40 million members in our perks program. It has 34,000 locations around the country, so [we have a] relationship with all major retailers, which opens great opportunities on the outside as well, because now we can start building 360 programs with them, and then the actual screens that we have on those kiosks. People interact with the TVs on top of the kiosk…”
Shapiro says, “It's funny, I was going through your notes to me before this panel and you had ‘Digital Out of Home’ (DOOH), which by the way is not an acronym I knew. I thought you were just like pulling a Homer Simpson and saying, ‘Doh!’, which you weren't!”
Guelton says that DOOH is currently one of the fastest growing businesses in the ad world. “So Digital Out of Home and retail media networks and the kiosk are really at the intersection of both,” he says.
Shapiro says, “People are going back out, they're leaving their homes and they're going back out into the world after a lockdown. And so Digital Out of Home advertising is really exploding.”
Learn more about streaming monetization strategies at Streaming Media East 2023.
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