Abstract
For digital video subscription platforms, creating and managing content portfolios are critical to acquire new customers, retain existing customers, leverage cross-sales, and generate advertising revenues. We treat content portfolios as a form of pure bundling which may vary in composition and attractiveness over time. Therefore, evaluating the value contribution of each content piece is essential to manage a platform’s portfolio efficiently and to understand how a specific content piece contributes to the bundle’s attractiveness. In this article, we develop an ROI content valuation framework for a digital film subscription platform. This framework describes how a single piece of content diffuses through consumers’ journeys and influences subscription fees through acquisition and retention as well as revenues from cross-sales and advertising. This conceptual approach allows us to address the heterogeneity across content and platform contingencies such as exclusive availability and platform specifics, and link them to revenue streams. Building on this framework, we offer avenues for future research and provide potential lead performance indicators together with their operationalization, enabling all parties involved in the production, marketing, distribution, and sales of content to determine the platform-specific value of a content piece.
Highlights
Digitization has fundamentally disrupted how audiovisual content is produced, distributed, and consumed
We aim to develop an ROI framework that takes the perspective of a digital video subscription platforms (DSPs) and is able to assess the value of a specific content piece, such as a movie or series, in the context of a specific DSP
To measure the value of a content piece or its particular contingencies under certain platform contingencies, we rely on the concepts of customer experience and customer journey (Lemon and Verhoef 2016) and combine them into a classic marketing effectiveness measurement model that accounts for the impact and dynamics of adding a content piece to different stages of the journey
Summary
Digitization has fundamentally disrupted how audiovisual content is produced, distributed, and consumed This technological development has culminated in a vast array of digital video subscription platforms (DSPs) such as Netflix, Amazon Prime, and Hulu absorbing a majority stake in movie consumption (Deloitte 2018; PwC 2019). The substantial growth of the market has attracted more competitors that try to conquer market share with the help of aggressive pricing and bundling (e.g., Disney + with Hulu, ESPN +) or third-party content integration (e.g., Amazon channels) (Sherman 2019a) In this increasingly competitive environment, platforms try to secure or protect market share by investing in content, as underscored by intensely discussed investments such as the US$100 m exclusive one-year acquisition of the TV show Friends by Netflix (Lee 2018) or the US$250 m Lord of the Rings deal of Amazon (Sherman 2019b). We postulate the impact of these contingencies and provide measures to capture them
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