Maintaining a digital content library in the media industry isn’t easy. Why?
They are a complex database of produced, resold, reused, content that needs a systematic arrangement.
After that, comes simplification, automation, and targeted deployment through targeted media channels.
We get asked quite a lot about how a custom digital content library can solve pain points of production managers and direct content producers.
Maybe this content piece can fit within the complex jigsaw of media content creation…
Let’s start by taking a step back so that we can look at the role of digital content within the media and entertainment industry.
Scope For A Robust Content Library in the Media Industry
The media and entertainment industry has changed dramatically in recent years.
The popularity of streaming video on demand (SVOD) services, such as Netflix, HBO Now, and Hulu has generated a slew of copycats.
Almost every media business has declared plans to start an SVOD channel in the aim of grabbing those subscriber dollars from direct-to-consumer sales.
For Production Heads, this has resulted in a significant increase in the demand for material in order to attract and retain members’ attention – as well as a slew of questions regarding how to store a content collection & automate them.
While new films or TV series receive a lot of attention on these SVOD services, the majority of their material is library titles, which are films or television episodes that were released years ago.
Then there are recent content libraries purchased from third-party distributors.
Now to improve production efficiency by 200%, media companies need a robust system that can combine content library tasks such as,
– Acquisition of digital content
– Cataloging systematically within a content library
– Proper naming conventions
– Categorization of shows, serials, animated content, and their management
– Circulation of content and tagging references
If digital content producers and digital content distributors see the benefits of building a custom digital content library, then the common media productions challenges can be avoided.
Some of those media production pain points are,
– Lack of transparency due to poor tagging of digital content
– Lack of ideas when creating consumable content
– Producing enough content to justify the expense of production
– Failure of a research mechanism to see what content works
How can we solve this? Let’s dig deeper into digital content and the purpose of building a custom digital content library.
How Can A Digital Content Library Be Optimized?
A content library is a collection of various forms of media spanning a wide range of genres and formats.
A video content library often consists of a collection of films, television shows, and athletic events stored in a variety of forms, including film, videodisc, videocassette, and digital.
According to SelectUSA, the movie and television production businesses in the United States continue to generate significant earnings through a number of channels, generating more than $60 billion in 2019.
Movie and television studios’ film libraries produce large revenue streams and often account for a significant amount of the value of intellectual property held by the studios.
However, the criteria and considerations that go into determining the worth of a content library or a single book in a collection are very subjective.
A digital content library’s worth is determined by the bundle of rights to sell and distribute a series of products in various countries throughout the world.
A Chief Production Officer’s role is to determine if the media content library is allotted to the respective owner’s rights and the predicted future cash flows is associated with those rights. Slightly confusing, but all these will get clearer further down the article.
In some countries, such as overseas markets, it is normal for the owner of a material collection to sell or lease media rights to third parties.
Netflix and other subscription video on demand (SVOD) firms, for example, are looking for long-term exclusive licensing to select programmes or world digital libraries.
Of course, selling or licensing a portion of a content title or content library’s bundle of rights, lowers the value given to the remaining bundle of rights.
As a result, a potential content media library buyer should perform due diligence on the individual media titles involved in the sale as well as the markets in which each title could be marketed and distributed.
The number of global broadcasting territories or local media libraries, in which a title is yet to be sold and marketed is an important aspect to consider when appraising it. (so, Marketing Managers in Media Industries, do take note).
Furthermore, the value of this bundle of rights might fluctuate dramatically year on year, depending on market conditions and key revenue sources. Content library sits at the start of the value chain.
According to CNBC.com, the value of content libraries has decreased over the last 15 years as DVD sales have decreased.
However, due to strong demand for content from SVOD services such as Netflix and Amazon Prime, these libraries have recently experienced a resurgence in popularity. As a result, a potential buyer of a book or media digital content library owners should analyse the property’s present and expected future cash flows, as well as the market’s expected trajectory.
Because of global stay-at-home orders issued in the aftermath of the COVID-19 epidemic, new media content material is being generated, and evaluated.
New sports programming has all but ceased, despite consumer demand for streaming content more than ever.
This has resulted in an increase in potential cash flow for some content, albeit only momentarily.
Individual film titles within a custom digital content library can be examined and categorised based on their potential value, in addition to appraising a content library via the assessment of expected future cash flows.
Recent revenue generation, age since first release in cinemas or on television, media or television ratings, director credits, producer information, starring cast, content genre, and exposure to home and overseas markets, are all factors to consider while evaluating any movie.
Here’s where a custom content library can be a huge benefit to Media Production Managers. The title of each film within the custom media library can be split into four categories: the best category reflects pictures that generate the largest revenue, while the lowest category indicates titles that are unlikely to justify the costs of monetization.
The general quality and age of each title, as one might imagine, have a substantial effect on the media library’s underlying value.
If all other circumstances were equal, a newer film that was a box office hit would have a higher value than an older film that had a small box office success.
A media company who owns a freshly released blockbuster motion picture, for example, might anticipate large money in the near future, whereas an older movie with limited box office profits will likely have a low value.
This demarcation is possible only if a media company builds a custom content media library.
However, with the exception of a small number of award-winning or legendary titles, an owner typically reaps the most of the benefits of owning a book within three years after its first release.
Another element that might affect the total worth of custom content libraries is the quality of the underlying physical and digital assets.
Digital assets are gold for any production personnel working at a small to medium-sized media company.
A complete collection of physical and digital assets for a library would command a higher price than a similar library where a buyer would have to pay for subtitles or digital files before being able to monetize the assets.
Similarly, a buyer should assess variables such as a library’s picture and sound quality to ensure that it is ready to use right away, and consider reducing the transaction price to account for any costs involved with digital restoration.
A complicated set of elements goes into determining the value of a certain content library, including the identification of a potential buyer and their capacity to access the essential distribution channels to monetize the assets.
Given the additional resources available to exploit the intellectual property, a multinational organization with a global presence, for example, would have more leeway in paying more for a library.
A corporation with a North American footprint, on the other hand, would most certainly need to license these rights to third parties in overseas markets, giving up a percentage of the intellectual property’s revenue-generating potential to the licensees.
Of course, just because an institution has the financial means to monetize a library does not mean it will pay a vendor for that ability. Many factors, including the quantity of other prospective purchasers and their financial resources, can influence a buyer’s willingness to pay in practice.
The valuation team at Gordon Brothers has a lot of expertise valuing content libraries, such as animated character copyrights, film and video libraries, sporting event libraries, song libraries, and other intangible assets including machinery and equipment and inventory.
Increased demand for older library materials prompts the issue, “How much is the content worth?”
As the fortunes of the entertainment industry have altered, the value of film and television libraries has shifted considerably.
When DVD sales began to decline after 2007, the value of content libraries plummeted.
Miramax’s 700-film library was previously valued at $2 billion, however due to the collapse of DVD, the library was sold in 2010 for only $660 million. Many parties are showing fresh interest in acquiring film and television assets as digital revenues have continuously climbed and SVOD platforms have multiplied.
There are significant factors to consider when buying, holding, or selling a library in order to appropriately assess its value.
Digital Content Library with Titles and Rights
The first step is to figure out exactly what is for sale?
A company’s ownership of some rights to a title does not necessarily imply that it owns all of the rights to the title.
The sale or licensing of certain rights to third parties is extremely widespread. Because international rights are frequently sold to help fund a production, it’s feasible that a firm will only be able to exploit a title in certain countries.
Similarly, third-party streaming or broadcast media rights may have previously been licensed for years.
Because they are some of the most lucrative potential revenue sources for library materials, a title’s worth can be substantially reduced if these rights are not used.
Does a media professional know if a title has digital rights?
Which ones, if any, are we talking about?
‘Digital’ is a broad term that encompasses both digital streaming and digital transactional rights, such as Video on Demand (VOD) and Electronic Sell-Through (EST).
Prior to the creation of home video or SVOD, older titles may not be exploitable through these newer distribution methods unless the rights have been cleared and validated.
It’s critical to verify a title’s media rights in order to determine a suitable digital content valuation.
Many companies use a Rights Management System, such as Rightsline or Filmtrack to maintain track of all their titles and associated rights.
The rights, on the other hand, are just as likely to be tracked and summarized in a spreadsheet or even an old, manually-typed list. (Trust us, that’s monotonous and what happens when you want to expand?)
Regardless, production medical professionals need to check the original title contracts and any addenda to ensure that the information in the database or list provided by the library owner corroborates the information in the database or list.
When working with a smaller library, it’s a good idea to go over all of the contracts. But for larger contracts to build long-lasting partnerships or collaborations, a custom digital content library is a must.
It may only be possible to review a small sample of contracts while assessing a big library. A custom media library can make the job of production professionals easier.
They can control the contract negotiations, organize the content library titles, and monitor the condition of digital media assets.
Title Quality Categorization
There isn’t a one-size-fits-all solution when it comes to titles.
Even titles that appear to be similar in many ways can have vastly varying prices.
The Matrix and Replicas are both sci-fi films starring Keanu Reeves, but The Matrix has grossed hundreds of millions of dollars and will likely continue to do so in the future.
Meanwhile, Replicas barely grossed $4 million in the United States, and the film may struggle to recoup its production and marketing costs.
It’s helpful to categorise each title based on its likely worth while analysing a bigger material library.
A custom digital content library will of course be built with advanced analytics that can help in easy categorizing titles in A, B, C, or D. All this is being categorized based on the greatest movies and the highest commanding prices.
The recent financial performance of a title, its age, Box Office / TV ratings, well-known stars or directors, and genre all go into the ranking.
On DVD and Blu-Ray, a title may still make significant money, however a C or D movie would not justify the cost of releasing a title in these media.
By grading each title, one can better assess the library’s future financial prospects.
Availability and Conditioning of the Assets
The availability and condition of physical and digital assets are often disregarded when determining the value of a digital content library.
Are media content producers purchasing film reels, tapes, or discs?
Is it possible to get subtitles?
Is the movie or piece of content ever going to be digitized?
If any parts, such as subtitles, are missing, can rebuilding help them before the content is released?
To license a film to Netflix or sell it on Apple TV, media producers need to develop digital files if it’s never been digitized.
Additional costs to efficiently monetize a custom digital content library are incurred when assets are missing, and these should be factored into the valuation.
Film and video quality might degrade with time, so check the image and sound quality before buying a movie or television show, especially if it’s an older title.
Digital restoration can be enhanced in quality, but it can also be pricey. The title may not be releasable if the quality is poor, and so has no value.
Filing Outstanding Obligations
Is there any debt or financial responsibility associated with an already existing library?
The many guilds and profit participants that contributed to generate the content are owed residuals and participations in most films and television shows.
A custom content library can be programmed to check if these payments are up to date.
Similarly, a mechanism must also be present that can ensure there are no outstanding legal settlements or lawsuits that may add to production costs or limit your capacity to utilise specific library titles.
A Thinking Custom Digital Content Library
The tremendous pace of change that has characterized the entertainment sector in recent years is certain to continue.
This proclivity for change must be taken into account when appraising a content library.
While a title’s recent financial performance is the strongest predictor of its future worth, you can’t expect it to stay consistent year after year.
Any appraisal of a film collection a decade ago would have expected that DVD sales would account for a large amount of the library’s future revenues.
Only A films are likely to receive this income after the first 12–24 months of release today, and a C or D title may never be published on DVD or Blu-Ray at all.
Most library properties’ two major revenue streams are currently streaming and TV licensing, although projecting these revenues can be difficult.
The best place to start is by looking at recent streaming or TV sales for a title or competitor titles.
As new SVOD players enter or exit the market, and cable companies battle cord cutters, pricing trends will undoubtedly change.
As a result, it’s critical to be in touch with sales staff and other industry participants who are best positioned to understand what customers are ready to pay for content and where the market is headed.
Content Production That Emerges From A Content Library
It’s important to realize that, depending on their assumptions and capabilities, various organizations may arrive at different valuations.
To leverage its titles, a firm like Disney can use its global distribution team, output deals, consumer product alliances, and theme parks.
Most other organizations lack this kind of infrastructure to assist in the monetization of a title. As a result, while considering how to value a content collection, it’s critical to think about a media company’s strengths.
Is the media company capable of selling and distributing both physical and digital content?
What about on a global scale?
One can expect to give up a considerable amount of potential sales if you use third parties to sell and distribute your material.
When determining the worth of a content collection, all of these aspects must be taken into account.
The existing Covid-19 rules on social distancing and travel restrictions have necessitated significant adjustments in work practises.
Content production was evolving even before the pandemic. Rapid technological advancements, combined with the necessity for production organizations to decrease costs, prompted a shift to more remote working.
While some content productions were forced to cease during successive Covid-19 lockdowns, others responded, speeding up and intensifying the already underway changes.
For example, while the transition to Internet Protocol (IP) in broadcasting — a critical step in digitization and data transfer – was already underway, as reported in a recent survey by Haivision, 71 percent of broadcasters have expedited their adoption of a technology-enabled digital content library.
The enormous environmental advantage that has resulted from this shift must be maintained – and accelerated – if media companies are to achieve their net-zero goals.
Remote Content Production of Live News And Sports
Newscasters have broadcast programmes from the comfort of their own homes.
With intense use of centralised facilities, large outside broadcast crews have been replaced, or at the very least shrunk.
Formula 1 became the first sports organisation to deploy remote operations around the world, paving the way for a longer-term sustainability strategy to address the pandemic’s health and safety concerns.
Another noteworthy example is Premier League football, which uses significantly fewer crews to film at stadiums, allowing one central production hub to cover many matches in the same afternoon.
The migration of broadcasters to IP has had a role in this. Remote teams may cover one match and then move to the next utilising automated and templated operations, eliminating the need for wasted trip time.
Moving production to the cloud also allows scattered teams to work in real-time with even more flexibility (yet another benefit of digitally transforming the way content is produced & managed).
While energy is required for connectivity and processing power in this type of distant manufacturing, the financial and environmental costs of a distributed team are much cheaper than the costs of driving outside vehicles and employees to sites.
Almost usually, computing is less environmentally friendly than travelling!
Managing Films And Scripted Content
For the production of scripted content, the changes have been just as extensive.
We’re at the start of a new age for virtual production in both film and television, fueled by technology and the need for considerably fewer people on set.
Directors can use modern computer-generated imagery (CGI) to transport an audience anywhere on this planet – or others – all from the studio, rather than erecting expensive sets or moving teams to film on location.
CGI has progressed as a result of the incorporation of gaming technology platforms and tools into films.
Previously, graphics were layered onto green screen post-production, but now actors stand in front of massive CGI backdrops, making production faster and easier.
The Mandalorian is the most renowned example of this, as it has successfully re-created the Star Wars galaxy for its devotees without requiring them to set foot in a desert.
In fact, we’ve progressed to the point where a film crew can now send out a drone to ‘shoot’ a location, which is then virtually replicated in high definition and used for studio filmmaking.
And this isn’t simply a plan; it’s being implemented right now!
Through the shift to remote production, this industry has adopted improvements in a year that would have taken five or even ten years to develop.
But we can’t afford to remain complacent if we want to reach our decarbonization targets for 2023 and beyond.
Any media firm now has the problem of integrating what has happened in the previous 12 months, moving forward with digital transformation, and measuring and speeding up their path.
Why engage an engineering and production team in far-flung places in journalism, for example, when you don’t require complicated camera maneuvers and can now manage the camera, audio, and lighting remotely?
And, with such fantastic new techniques of filmmaking, may we be seeing a return to the types of studio lots seen in the 1920s?
While estimates on the effects of the previous year on the industry’s carbon emissions aren’t yet available, they will almost certainly indicate a significant drop.
There is, however, no room for complacency.
According to a recent BBC research, switching from broadcast to streaming actually increases carbon emissions.
The downstream carbon footprint of media business technologies (distribution and end-user apps) is significantly greater than a media company’s direct carbon impact.
The priority should be to optimize these parts in terms of energy utilization.
But, that’s for another blog post. For now, if you are a media producer and are looking to add intelligence to the content production process, then let’s chat…