On Demand: Herd Mentality Can Stunt Growth of SVODs

Creative pricing, flexibility on models needs to remain the goal, panelists agree
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Complete Coverage: On Demand Summit

New York — Companies joining the SVOD fray need to be creative and flexible on pricing, distribution models and the development of their products, agreed participants on a technology panel at Thursday’s On Demand conference, presented by B&C and Multichannel News.

During the session, “A New World of On Demand Technology,” moderated by Multichannel News technology editor Jeff Baumgartner, Andy Shenkler, executive VP and chief solutions and technology officer for Sony DADC NMS, said too many SVOD services are pegging their pricing to Netflix. 

“We aren’t going to win this game if everybody sets their price at $4.99 to undercut Netflix,” he said. Being willing to price services at $15 or $20, with offerings that are different than those of Netflix, can be another advantage.

Shenkler, whose company provides supply chain solutions, said many clients have unreasonable expectations. When they invoke industry leaders like Netflix, Facebook and Google, he said he tells them, “‘You’ve just named about $700B in market cap. And you want it for $15,000 a month?’”

Tim MacGregor, head of customer success for IBM Cloud Video, said companies approach him with concerns about legacy distribution partners when they are prepping OTT services. His advice: Keep all options open. “You can call it legacy, but you have to look at it that way when you go to market with these things,” he said.

Models are also getting a rethink, panelists agreed. MacGregor and Shenkler noted more are employing “slightly set-back paywalls,” meaning some content is free and in front of the wall.

Yet another priority for anyone operating in the current ecosystem is rights management. Jim Riley, chief revenue officer for Mediamorph, which specializes in rights, says the old days of straightforward deals have given way to a dizzying matrix of territories, platforms and terms. “I got a call from someone when Prince died,” he said. “He told me, ‘I know I need your service — I have all these assets but it will take me three days to figure out what I can use and where I can use it.’”

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