Streaming Challenge #1: Platform Selection

The most difficult question a creator must face is the question of where to make their content available. Of course the goal is to maximize engagement with a target demographic, but that engagement must also generate revenue, or the operation cannot sustain itself. The options are so numerous and diverse that sifting through them can quickly become an enormous challenge. But there are some considerations that can help reveal the path forward.

Pros & Cons: Platform Exclusivity

Some of the most ambitious and high-budget content can only be produced with outside funding provided up front. Historically, the most common way to secure such funding has been to enter an exclusivity agreement with the hosting party. Such agreements require the host to pay for the content’s production in exchange for an exclusive license to display the content they funded. This allows the creators to focus on making content instead of chasing revenue, while the host has the opportunity to make a return on their investment by attracting advertisers and/or subscribers to their proprietary platform. The more engagement the exclusive content can turn into money, the more the host is willing to keep paying for it. So if all goes well, everybody wins.

But the exclusivity approach has its downsides, too. For one thing, it ties the success of the content to the success of the hosting platform. In theory there’s nothing wrong with that, but in practice it can lead to significant risks on all sides. A struggling platform can bring great content down with it. Likewise, an expensive and exclusive piece of content must necessarily perform not just very well, but well enough to help the host platform compete for attention in a market that it is: a) extremely competitive, b) chaotically fractured, and c) consolidating rapidly. These unstable conditions just raise the stakes even higher.

In short, the exclusivity approach is a high-risk/high-reward strategy. When it works, it works very well. But when it fails, the content disappears, or entire platforms disappear, or maybe even both.

Pros & Cons: Multi-platform distribution

In the broadcast era, non-exclusive content was described as “Syndicated,” meaning it was licensed to multiple host networks simultaneously. In the streaming era, the equivalent is the “Multi-Platform” distribution strategy. The clearest advantage of this approach over exclusivity is that the content’s success is not tied to that of any one hosting platform. This means the content itself has a much more resilient market presence.

On the other hand, arguably the most significant downside of this approach is also the point at which the “syndication” analogy breaks down in the streaming era. Broadcast syndication meant the show sold a rights license to multiple different hosts, and hopefully profit from selling those licenses. The hosts would typically claim most of the ad revenue for themselves. In the streaming era, the model works quite differently now. Rather than hosting platforms buying licenses to display syndicated content, it is the content creators that spend money for the privilege of being hosted on the platform. So the non-exclusive creators now handle both production and distribution costs on their own, out of pocket. What they get in exchange for that is a cut of the ad revenue.

In short, even non-exclusive content still needs to generate lots of engagement to be profitable. But the stakes of the non-exclusive approach are very different from that of the exclusive approach. Those differences matter a lot to a growing pool of creators.

Distribution Costs: "Fixed/Flat" vs "Revenue Sharing"

Part of what makes non-exclusive content more costly up front is the need to distribute it to the various platforms. Most productions don’t have their own pipelines for moving content from place to place, so they have to hire a 3rd-party distributor. Many distributors offer a “revenue sharing” pricing model to offset some of the startup costs, both making the launch cheaper, and lowering the threshold of profitability.

While the rev-share model is effective at lowering startup costs, it also lowers the metaphorical ceiling by dispersing the fruits of success. By contrast, distributors who bill a flat rate raise both the floor and the ceiling for creators. It’s more expensive to launch, but the potential profit is also much, much higher without having to share revenue with the distributor.

Conclusion

The questions of exclusivity and distribution methods are arguably the most consequential topics creators and producers ever consider. If you’re struggling to navigate all the implications, you don’t have to do it alone. You don’t even have to pay someone to get some basic guidance tailored to your situation. If you’d like some free help, you can have the experts at ViewNexa audit your content library, and offer some insights into what kinds of platforms make sense for content like yours, what their models are, and what options you have - all at no cost.

Streaming is complicated. But with the right partners in your corner, anything is possible.