in the Streaming Industry
William Sondheim, Greenfield Media
Stephen J. Kerr, Bel Age Medias &
Sarah Nean Bruce, Bel Age Medias
– 10 MINUTE READ –
This is the first in a short series of succinct articles. Included in these pieces are questions posed by Stephen Kerr, and William Sondheim, along with their perspectives, and answers - via direct quotes - from owners and executives of streaming media companies who were recently interviewed.
William “Bill” Sondheim, a long-time media executive, who has built, run, and purchased streaming media companies brings his own unique insider insights on how to build a better streaming business.
Stephen J. Kerr, a 25-year veteran corporate and intellectual property appraiser, as well as an M&A intermediary, who has bought, sold, and valued streaming and home media companies, contributes his investment banking perspective to this topic.
The industry execs, we interviewed, share their “in-the-trenches” perspectives, and experiences, on the “OTT” streaming media industry.
--"Streaming was part of the future — now it’s the only future" [The Verge] 1
its dominance is now reality and a matter of fact… for all of us.
Much of what is written about the huge, multinational streamers is not very helpful to the abundant streaming company owners and executives hustling and struggling to compete in the crowded streaming media space.
Here it begins – everything streamers may want to know and are not afraid to ask.
Both, Sondheim and Kerr, concur that CONTENT, DISTRIBUTION, SUBSCRIBERS / VIEWERS, and INFRASTRUCTURE / MANAGEMENT are any streamer’s four principal assets.
How well these assets have been managed, and how fast they have grown and evolved, are what create and sustain strong streaming media businesses.
Sondheim’s advice is aimed at strengthening a streamer from the inside out.
Kerr’s guidance relates to making media companies more valuable from the perspective of bankers, investors, and suitors.
Both points of view are important to smaller and mid-sized streaming media businesses.
SONDHEIM: “Content is really the driver of all consumer traffic and therefore drives revenue. While it is important to secure strong distribution and it is equally important to have strong operating systems for accuracy and efficiencies, none of those elements will really drive success without the right content to create initial intertest and to sustain that engagement over time. In fact, focusing on strong and compelling content will often help a company secure broader distribution and better trading terms with those distributors.
“Equally impactful, having well recognized content will draw in more sophisticated service vendors that want your business and that helps improve your operational workflows. The consumer appetite for content is enormous and must be used to create the momentum needed for strong placement and operational excellence.”
KERR: “From the perspective of an appraiser and business broker, whether owned or licensed, exclusive or non-exclusive, high-quality content (especially exclusive) is often seen as a streamer’s single largest asset. When we value a company we often look at their content first, to determine if the enterprise would have value to others.
“We have found over the years that niche, enthusiast focused content is viewed as much more valuable than a broad range of unrelated titles. The large streamers like Peacock, Disney+, Netflix and Amazon Prime can try to be all things to all people because they have massive back catalogs. But the small to mid-sized streamers need to offer focused, enthusiast-oriented content.”
Steve Saltman, Head of Domestic US Sales at Electric Entertainment (ElectricNow): “The voracious eater of capital for us is content and marketing. We can’t keep running the sprockets off of our existing programs. We need to create and acquire new properties to keep the dynamics. We’re making a big investment in production and getting the consumers to find us.”
KERR: “The number and breadth of distribution contracts (Amazon Prime, ROKU, TUBI, XUMO) a streamer has, can sometimes be more valuable than their content. Companies that have all non-exclusive content can still be very robust and financially successful if they have excellent distribution of their channel(s) across multiple platforms, and overseas.
“But, it has also been our experience that ‘Content is not everything.’ SVOD, AVOD, TVOD and Linear distribution, well-placed and well-supported, can become a major asset for a streamer. Of course, the combination of great content and great distribution is everyone’s Holy Grail.”
SONDHEIM: “Many content companies are still trying to navigate the rapidly changing digital landscape. Three years ago, a successful, smaller content producer might have been focused almost entirely on placing titles with Netflix. Three years later we see Netflix has pivoted to internal content development and production, and many smaller independent producers have little chance of placing their existing titles with them. Companies that have strong established deals in place with platforms can greatly accelerate their revenue growth.
“Equally, companies that may have lagged behind in establishing those distribution deals with emerging platforms may benefit from merging with an entity that already has those relationships, and legal contracts, in place. This is a proven technique to accelerate distribution capability and often is exhibited when smaller content companies, with excellent distribution in place, become attractive takeover targets for larger companies with stronger content, that may have struggled with new business development or been slow to adapt due to focus legacy businesses.”
Victor Elizalde, CEO Viva Film Co. (Kidsflix): “If I had a large influx of funds I would use it to consolidate the marketplace. With all the independent companies out there, the economics are such that they all can’t succeed, and they won’t.”
SALTMAN (ElectricNow): “The cream will rise to the top, and others will fade away. I do worry about being an independent. The Big Boys have leverage that I do not. From a programming point there are barriers of entry. The Big Boys create what I call ‘pseudo walled gardens’ where they keep a lot of their best content for themselves and won’t license it out, because they have huge libraries of great programming, with big brands that people recognize and follow. As an independent we’re lucky as we have several significant brands that we created and we own.”
KERR: “If a streaming media company is adding and retaining SVOD subs or AVOD viewers at a fast clip, this can be a huge attraction to any investor or suitor. Included in this perceived benefit are a company’s marketing skills, success rate and global marketing reach.
“Niche streamers often know their ‘enthusiast’ audience better than anyone else. Using a combination of social media and affinity marketing, they can regularly grow their target audience faster than a much bigger media company with a large but non-specific audience. It is still critical to have the right, freshest content, as well as great distribution… but inspired subscriber / viewer marketing really separates the professionals from the amateurs.”
SONDHEIM: “There are several factors that can drive rapid growth in both SVOD and AVOD outlets. Often content categories are underserved, or the defined target audience is unaware of the service being provided. Marketing and promotion are critical to finding a streamer’s audience, giving them clear reasons to initially subscribe, and then - equally important - retaining that audience so that they stay subscribers, lowering subscriber ‘churn.’
“While there are many traditional advertising outlets like print and TV, we have seen a clear correlation between social media and the ability to reach and convert targeted demos into subscribers or frequent visitors. Social media is both interactive and ubiquitous, that is why social media is able to generate high response rates and measurable actions. If you see something you like on a social media post you can often click instantly to a link and the transaction has begun. The group interaction on social media also tends to motivate like-minded consumers into action. We have found that marketing budgets - and their measurable effectiveness - are far greater with social media marketing for digital consumers than any other traditional media outlet.”
Ryan Swenar, Director of Sales & Biz Dev at WowNow Entertainment (WowNowKids): “The first place we want to put our resources is marketing. More visibility is key.”
David Kraus, CEO Flixx Media (FlixxTV): “It’s all a land grab right now. And the ‘land’ is the viewer.”
ELIZALDE (Kidsflix): “There is no doubt that the medium is growing. Platforms are growing. The industry is growing globally. One thing that we all need to learn from Quibi’s horrible mistakes is that we have to give the consumer the content in the format that they want to consume.” 2
Then you need them to go out with you. And then you need to get them to come back.
SONDHEIM: “If ‘Content is King’ - then the managers and operators who have a deep understanding of content categories, and who have strong relationships with the creative community, are very valuable.
“Experience with those niche content clusters can help avoid costly mistakes, and that can bring enormous value. Understanding a niche audience accumulates over time from successes and failures. Often niche audiences possess unique aspects that attract or repel them, time, and management experience are often the best ways to master those nuances.”
KERR: “Even the biggest media companies cannot cover all the niche markets, and an entrepreneur’s knowledge of a specific enthusiast group can make his / her company incredibly valuable. This is especially true when the owner is perceived as a ‘celebrity’ or ‘influencer’ in that niche market.
“Proprietary technology / infrastructure can also be perceived as major assets to a suitor if it will save that company money or make them more efficient. Much of the technology required to run a robust streaming company has become almost omnipresent (technology democratization), but proprietary systems that offer a competitive advantage to a small company may be perceived as important to a much larger organization.”
SWENAR (WowNowKids): “Instead of partnering with a third party for avails and databases and lab work, we’ve brought all of that ‘in house.’ This has allowed our company to build up at a quicker rate, and with a smaller footprint.”
SALTMAN (ElectricNow): “The ‘Big Boys’ are taking a lot of the oxygen out of the room in one sense, and in another sense universal access to the technology democratizes the process.”
None of us really know enough about all the nuances of the streaming media industry to call ourselves “experts.” Not the owners, not the business development execs… nor the consultants. We are all constantly learning, as the industry itself keeps changing and morphing into something different every year.
This is an extremely dynamic business and no one is brilliant enough or experienced enough to just to sit back on their content and distribution systems. Content, distribution relationships, audience and infrastructure constantly change and evolve right in front of our eyes.
There are few secrets in this business, mostly shared pains. If we can learn from one another how to avoid the inevitable pitfalls and roadblocks in our industry, we can all prosper.
Consequently, the more we share our experiences and our knowledge with each other - the better we, and our industry, will become.
Special Thanks to our Industry Experts quoted in this article:
↓ Stay Tuned ↓
→ HOW TO BUILD A BETTER
STREAMING MEDIA COMPANY (Part 2) ←
Licensing And / Or Buying Streaming Media Content
Looking for more capital or other resources to help you make the right moves for your streaming media business?
Bill Sondheim and Stephen Kerr can assist.
- If you need a veteran media guru working alongside you to help fortify your streaming media business, or to initiate & complete licensing deals - please contact Bill.
- If you need a business or intellectual property valuation, IP acquisition / divestiture, or you want to discuss the sale of a company - please reach out to Stephen.
1 - STREAMING WAS PART OF THE FUTURE — NOW IT’S THE ONLY FUTURE — THE VERGE – Oct 28, 2020 By Julia Alexander
2 - WHAT WENT WRONG AT QUIBI? JEFFREY KATZENBERG, MEG WHITMAN, AND SELF-SABOTAGE — BLOOMBERG – Nov 11, 2020 By JP Mangalindan
BAM News • BMC Articles • Greenfield Articles
FEATURED-GRAPHIC-HOW TO BUILD A BETTER STREAMING BIZ V2_sb.jpg – via Bel Age Medias
INFOGRAPHIC-HOW TO BUILD A BETTER STREAMING BIZ.jpg – via Bel Age Medias
HEADSHOT-LinkedIn_BillSondheim.jpeg – via Greenfield Media
HEADSHOT-LinkedIn_StephenJKerr.jpeg – via Bel Age Medias
HOW TO BUILD A BETTER
STREAMING MEDIA COMPANY (part 1)
Advice for Companies Doing Business
in the Streaming Media Industry