Today, media companies are at the inflection point where linear revenue is lower than digital and streaming revenue. That has major implications for what’s next.
With more than a decade of experience at The Walt Disney Company, I experienced how digital and streaming upended standard foundational ad serving and operations, commercial formats and ad sales proposals.
Now, a new age of diversification in media is taking over. The winners are emerging as truly bespoke businesses. Companies like Disney, NBCU and Paramount are leading the way, creating distinct value propositions.
I remember the years when media companies had relatively similar TV businesses – some form of national and local linear broadcast content with standard commercials that would be programmed based on a defined set of targeting parameters.
With digital and streaming, it’s just the opposite. Media companies have all sorts of business models built on websites, streaming apps, partnership deals, data and more. It’s anyone’s guess how CTV advertising will eventually look. But, today, there are no rigid standards. Advertisers are open to testing wild varieties of formats and strategies, including audience targeting, contextual targeting, dynamically generated ads and even in-content AI-created product placement.
Three media leaders, three media strategies
Remember when everyone lumped NBC, ABC and CBS into one category? Or when there was an endless list of cable channels that offered the same combination of news, reruns and sports? Beyond hit shows or an attractive news anchor, there weren’t many opportunities to differentiate.
Compare that to three leading media companies today: NBCU, Disney and Paramount.
NBCU is the sponsor of the Olympics this year, powering the viewer experience with their NBCUniversal One Platform, a proprietary ad tech stack they built to unlock data-driven audience targeting and personalized viewer experiences. NBCU offers scale and measurement across streaming and linear with a unified media offering.
Disney has taken a different approach. Although the Disney+ app has been losing subscribers, the company has been agile and pivoted toward another money-maker: sports. Disney offers audiences bundled subscriptions, which distribute the cost of platform ownership with partners like Fox Sports and Warner Brothers. Their ESPN+ offering leans heavily into sports, and the company is poised to reach profitability by the end of 2024.
Paramount, meanwhile, is in the middle of a major push to bring a full funnel of marketing capabilities to CTV from data to targeting and commerce. After a string of acquisitions and mergers, Paramount is betting on unified data and a converged product catalog, which will differentiate it as a performance play while freeing the company to streamline its technology and operations.
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Building out a unique offering
These enormous media companies are investing time and millions of dollars in unique technical and data configurations. All are large enough to have substantial proprietary tech or a highly integrated stack of foundational third-party technology. All want to be agile and flexible and set up to scale, as digital and streaming become bigger parts of their business.
However, moving completely away from rigid, undifferentiated technology is not an option. Linear is still huge, and there are core technologies that are deeply entrenched in the media landscape that aren’t going anywhere. These media companies are finding ways to maneuver through modular solutions that solve specific problems and deliver unique value.
Media companies may add a cloud solution to bring all of their data into one place or technology that offers a unified product catalog or rate card. One might need yield management and pricing software to help with allocation across a huge variety of different content and channels, while another might need sophisticated AI modeling to identify audiences that help an advertiser reach their goals.
These individual technology solutions don’t help these companies get closer to some “ideal” media company. Instead, they help a media company become the ideal version of itself.
“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
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