Enterprise content portfolio management: Toward the simultaneous monetization of traditional and new media content

Evolve or die! This mantra from biology texts and popular business books reverberates loudly across the broader entertainment industry. While consumer trends show continued viewer growth, fragmentation and the explosion of digital content distribution create significant revenue and margin challenges. In addition, disruptive technology and new business models provide competitive threats as well as opportunities for growth.

Digital technologies have reinforced consumers' enhanced individualized expectations, that they can access entertainment products wherever they are, on the platforms of their choice, in their preferred language, whenever they want it, and on increasingly flexible pricing terms. These technologies also disrupt traditional exhibition release windows and put pressure on traditional revenue streams.

This transformation of the media requires a transformation of the media enterprise. And this requires nothing less than the recasting of business operations, even as they support legacy models that continue to drive significant levels of cash flow amid cannibalization and intense competition. New release window strategies must factor the extent to which viewers of one channel are eliminated as a result of the growth of another. Traditional business verticals now require more flexibility within their domains and a more fluid integration across the enterprise. However, silos of content stores and financial systems per business unit and lack of common intellectual property rights information make it difficult to answer day-to-day questions and create major portfolio management issues for studios.

The complexity of media operations and distribution is a product of the rapidly transforming marketplace:

Customers are more willing to pay for a better experience, if the price is right - As an increasing number of content providers, aggregators, and telcos are starting to charge for high-quality content access, consumers are also stepping up and indicating that they are more willing to pay. Now is the perfect time for companies to experiment with new pricing models to exploit the economic value that has long eluded online and wireless distribution of digital media content.

Explosion of new devices that not only revitalized old content but also raised the bar on bandwidth demands - As the iPad brought new life and new subscription revenue models to the publishing industry, content originators and distributors are faced with potential new revenue streams as well as additional cost of customizing the same content to make it relevant and easy to consume from multiple devices.

Changing competition and alliances landscape translates to complex deal structures- ATT Uverse and Verizon FiOS are competing with cable MSO offerings; Google and Apple are expanding into and dominating smart phones and mobile services; original productions are co-funded by multiple parties; and multiple industry consortiums are forming to deliver high-quality content and standards. The frenzy not only generates complexity for the legal department but also highlights the need to track the rights to exploit content and maximize revenue opportunities.

Sophisticated and fragmented customer base is demanding a la carte content and relevant advertisements in real time, in the right format, and at a lower unbundled unit price - ESPN demonstrated its interactive Live Sport experience where viewers’ feedback is collected (from social media, TV boxes, and other devices) and used to update content in near real time. This presents unprecedented opportunities to build intimate customer profiles, demand premium advertising fees based on viewing behavior, and exploit cross-sell and up-sell opportunities.

Real time, a la carte content and multi-platform up-sell is unfortunately not easy to facilitate. Content providers and distributors will need to manage micro-payments, streamline production/post-production and distribution workflows, and push as many services (such as rights clearance) into an online self-service model to meet the real-time demand.

According to PwC’s 2010 Global Media Outlook, more than one-third of media spending around the world in 2014 will be on digital content. Content providers that continue to treat their digital and mobile businesses as standalone experiments will stand to lose real revenue and market share. Providers can no longer continue to manage their valuable assets through disconnected business unit silos focusing on specific distribution channels; such thinking is "analog management" in a digital world.

The enterprise needs to integrate content, rights, and financial information to gain visibility of content performance across all channels and make more informed decisions regarding content exploitation.

The challenge lies in linking media content with its rights and historical financials by channel and presenting the consolidated information in a dashboard to support proforma analysis. In addition, organizational, process, and technological platforms must be aligned to support data-driven decision-making for the enterprise as a whole.

An enterprise content portfolio dashboard could deliver:

• Visibility of media asset performance across all channels through the integration of content, rights, and financials
• Ability to rapidly address changing customer expectations and repurpose content effectively
• Easily locate content that can be shared and reused across business units
• Discover content that is not being fully utilized across multiple rights dimensions
• Real-time alerts of a portfolio's profitability and performance, especially during the critical theatrical exhibition window
• Reduce legal risks across the enterprise and maintain enterprisewide standards and governance
• More accurate planning and estimation of performance for budgeting and planning

Enterprise content portfolio management (ECPM) allows a business to realize these benefits with a holistic view of content, rights, and financials. Combine these views to empower the business and maintain a strong and dependable portfolio.

Content, and more importantly, metadata describing the content, would need to be aggregated from multiple supporting systems to deliver the dashboard view. For example, to obtain the total revenue from the Batman franchise, all related revenue may need to be collected from theatrical, home video, licensing, international distribution, and theme parks. Furthermore, various business units may have different metadata or terminology for the same content, and the metadata evolves as it is ingested, edited, formatted, and distributed, thus making sharing and searching of content difficult across business units.

The key to enable content visibility and maximize content value is metadata standardization. A large content originator such as a major studio may have thousands of metadata fields, and it is not necessary to standardize all of them. Instead, content owners should look for the subset of metadata fields that have financial impact and trigger different rights treatment. For example, Blu Ray versus standard DVD versions have significant revenue and cost impacts, and the format and spelling of these key metadata must be unified. Once standards are agreed upon by the business units, automation of metadata ingest and validation of metadata update become the critical processes to ensure consistency and content identification.

The need for enterprise standards applies not only to metadata, but also to the content owner's intellectual property (IP) rights. Legal rights information and restrictions pertaining to a media asset are often trapped in paper form, making rights clearance a labor-intensive, time-consuming exercise. This slows contract negotiations, delays time to market, and exposes parties to legal liabilities.

A well-defined, standardized legal taxonomy describing rights to content is essential to maximizing the performance of assets. The reality is that for many content producers and originators, legal contracts are in paper form or scanned as a PDF; neither format is searchable. Sorting through the existing paper mountain requires prioritization at the asset level and at the legal clause level and must be done according to a well-thought-out taxonomy.

Once the metadata on content and rights are standardized, historic revenue and cost information can be associated to form a picture of the financial performance of a specific title, in a particular channel, in a specific geography. As new revenue models emerge and as joint ventures and distribution channels proliferate, the capability to share and recognize revenue and costs becomes ever more complex.

An executive dashboard that aggregates content, rights, and financials across all channels can provide the clarity executives need to understand past performance and make more informed decisions, which benefits the enterprise as a whole. Only by looking at all the media assets and channels as a portfolio, can one see the macro trends and make decisions that will affect growth and the return on investment of content.

To support the portfolio presentation of content, rights, and financials, PwC has created a reference solution framework, illustrated by the diagram below.

Two main components of the design include the Dashboard and the Reporting Tier, highlighted below.

At the dashboard tier, deal analysis tools and content dashboards cover all the distribution channels in the content value chain to support decision-making and what-if analyses on new deals and business models. The dashboard can be configured to present relevant information at varying degrees of abstraction for different levels of management. A sample dashboard is presented below.

An executive dashboard can support the following use cases:

1. Analyze profitability of past deals based on revenue, costs, ratings, related content, or brand family profitability.
2. Identify additional exploitation windows and forecast expected new revenue streams based on multi-dimensional rights clearance and reporting.
3. Serve as a work bench to construct future content acquisition or licensing deals: users can input deal parameters based on historic values, expert opinions, and growth projections. Users can also vary the parameters to see the potential effects on profitability.

The reporting tier delivers content availability, utilization, performance, optimization reports, and market insights to address questions such as:

• Which title is doing well/not well? Why? Drill down into geography and screen level if necessary.
• How does the recent box office performance impact the ultimates of the new title?
• What contents are available for distribution in what geography, format, platform, and language?
• Do we have the rights to exploit specific titles in a particular country?
• What is the profitability by title, platform, and geographic region?
• What are the most popular search words for the latest blockbuster to be released this weekend?
• What are the consumers and the audiences saying about the content and services?

The reporting tier is powered by a business analytics engine that supports structured data and unstructured data, in real time and through historic analysis. The structured data is created from a clearly defined reporting rules base that compiles mostly historic data. The unstructured data, including social media information, customer transactions data, website traffic, popular search words, and preferences are collected and analyzed continuously or in real time to support on-demand content updates.

Companies with the ability to analyze both structured and unstructured data enjoy increased agility in business operations and are better positioned to take advantage of rapid changes in demand or capture a new market segment.

For those enterprises that are considering or are already under way with the design or implementation of ECPM, a few observations from successful initiatives:

• Establish a clear understanding of the current state. Even if the solutions run on a set of spreadsheets and filing cabinets, it is important to assess the current state of systems, processes, tools, standards, and policies used to manage content, rights, and financials. This helps the team to visualize gaps, set the baseline for ongoing project efforts, and collect metrics to compare against industry best practices and benchmarks.
• Develop a target state road map backed by a quantified business case. Building the ECPM solution is a large undertaking that will require cross-business unit collaboration and executive level support. A road map is the perfect tool to communicate to stakeholders the vision and a phased approach to realize the benefits.
• Take a content-centric approach. Many content originators and distributors are organized around networks, channels, or platform groups (e.g., broadcast division, new media business unit, mobile access group). These business units develop disparate and potentially duplicated infrastructure, application, and content repositories, making it difficult to search, retrieve, and repurpose content across the enterprise. This also involves halting investments in silo repositories, standardizing metadata to enable enterprise-wide content search, and creating a common content governance model.
• Prioritize services to be offered for quick wins. The more a company enables self-service to staff, partners, and customers, the lower the cost of content exploitation. Companies should look at the most common queries from various stakeholders that are the most costly to answer. One such query is "Do we have the rights to distribute or license this content?" and more precisely "to distribute this content in a particular format, on a particular platform, during a particular date range, for a particular geographic region?" This may take the legal department days or weeks to ascertain. Common rights taxonomy is the key to extract contract clauses and organize them into easily searchable data structures.
• Invest in the right architecture from the beginning. A well-crafted content and rights portfolio platform relies on a well-architected integration solution, and SOA is the necessary initial investment that will pay off over the long term in its scalability, extensibility, and relative ease of maintenance.
• Maintain a business process focus to discover and refine business requirements. A clear and thorough definition of specified workflow requirements allows selection of appropriate technologies, which can then be easily integrated to support desired processes while remaining flexible and scalable.
• Understand media format requirements. With the proliferation of distribution channels and devices, it is important to invest in multi-platform IP-based interoperability standards (such as Broadcast Exchange Format (BXF) and Material Exchange Format (MXF) and mezzanine format standards (such as the mobile digital standard ATSC-M/H), which may serve as a superset of standards for mobile phones, personal computers, and televisions. Companies need to constantly scan the market for emerging standards and evaluate their baseline storage format accordingly.
• Establish one metadata model. A single metadata model to which all stakeholders agree is crucial to a successful implementation. If content could possibly be reused in other productions — or in some other way repurposed or resold — it needs to be described in a language that all relevant stakeholders can understand. It’s critical to get agreement that content creators, suppliers, and editors will generate a simple, baseline set of metadata.
• Establish governance. File formats, delivery channels, and content types are constantly evolving, so an enterprise-level governance model for digital assets is critical.
• Obtain executive sponsorship. Active, visible, ongoing C-level involvement is even more critical for initiatives such as ECPM. PwC has consistently seen executive sponsorship among the most important of all success factors and cannot overstate its importance. In addition, companies need to closely involve unions, guilds, suppliers, and partners and obtain customer feedback.
• Measure everything with revenue or cost impact. PwC developed a set of 52 metrics covering production and post-production workflow. This enables improvements to be measured and budgets to be justified.
• Reduce information silos. Information silos, inaccessible to others across the organization, result in executives and business analysts duplicating one another’s efforts and struggling to access the right information at the right time.
• Reduce data fragmentation. In many organizations, the strategy, architecture, and governance of data are fragmented. Multiple definitions exist for the same data. And, without clear data ownership, quality suffers, and time is wasted.
• Aggressive Enterprise Information Management. Many organizations have yet to focus on the accuracy, quality, relevance, and governance of their business information — whether it’s about their customers, suppliers, finances, or operations. The majority of business information solutions have been deployed at a tactical or departmental level, lacking extensibility to deliver a single version of the “truth” across the enterprise.

Media and entertainment (M&E) companies must link together the traditionally vertical business silos into an efficient, integrated eco-environment for managing processes and information. Strategies need to be in place that overlay a horizontal approach of tools, methodologies, and processes across traditional content management systems. One of the benefits of this blueprint is that it helps content owners realize the benefits of advanced cross-platform, cross-channel analytics by aggregating and correlating content, its intellectual property rights, and associated financials in dashboards tailored to executive audiences.

Properly deployed information management solutions can empower M&E companies to seize control of their futures, allowing predictive information concerning their content to dictate how, when, and to whom digital assets are profitably released or marketed. To realize this vision, M&E organizations need to develop a holistic perspective, structured approach, and comprehensive plan for managing the growing volume and complexity of information for strategic advantage.

While it is true that one of the challenges is the migration from analog to digital, this is not the crux of the problem because in today's world most media/entertainment content have migrated to digital formats. The important issue is that the growth of the industry is in nontraditional areas spurred on by new competition and technology. The really big problem is that no clear business model has surfaced, and the new models cut across the vertical aspects of the media companies. To maintain content value and growth, M&E executives need to understand content-based value across the portfolio of distribution.

In simple terms:

• Business is changing; there is growth, but getting this growth and the impact to the traditional business is not clear
• Companies need to look at content-based value
• ECPM illustrates how you can bring together content, rights, and financial management and understand content value
• This will lead to new thinking, innovation, and growth

Therefore, moving to an information/analytics culture or mind set is critical for success. However, no matter how good the systems and tools, portfolio management must be centered in the context of business value. No level of information or data or the most sophisticated ECPM framework enabling the finance and operations executives and team are replacements for knowledge of the business, operational levers and understanding the total consumer around the M&E ecosystem.

To learn more, visit our Web site at www.pwc.com/em