Improving the ROI of media content

Today’s demand-driven media industry

The world of film and television doesn’t look like it used to. While the industry’s ability to create long-lasting memories and spark the imagination of audiences around the world remains powerful, much has changed. The industry is reckoning with a shift from a supply-driven model—where media and entertainment (M&E) companies push content to the consumer through different staged viewing “windows”—toward a demand-driven model where consumer behaviors and preferences dictate M&E ecosystem activity. 

In this demand-driven landscape, audiences are offered more viewing options than ever before. Across streaming and TV services, there are now more than 800,000 titles available in the United States alone—establishing that content is king. This push for larger catalogs of content has driven streaming wars and fueled a titles arms race, further running up production costs. It has also temporarily broken the traditional staged windows of distribution, with the race for new subscribers pushing more content directly to streaming platforms. 

While technology has reduced barriers to content distribution, production expenses continue to rise, challenging profitability amid flattening revenue growth and high subscriber turnover. In this paper, we’ll explore challenges and implications across the content life cycle to help M&E organizations navigate today’s evolving demand-driven landscape—and create sustained advantage.

Opportunities to optimize content ROI

Recent market shifts have compelled some media and entertainment companies to reevaluate their business models, capabilities, and ecosystem partnerships across the full content life cycle. Today’s demand-driven model presents opportunities to optimize content ROI across five key phases: content greenlighting, distribution strategy, production efficiency, audience engagement, and advertising effectiveness.

Greenlighting strategy: Greenlighting new content that resonates with audiences is crucial to meeting demand trends and overall monetization. Studios looking to maximize monetization are increasingly looking to combine creative instinct with the science of estimating content value.

Distribution strategy: The shift from limited distribution channels to fragmented audience touchpoints across multiple platforms will require bespoke distribution strategies. Media organizations should consider audience fit, windowing strategy, downstream monetization opportunities, and platforms available to inform release strategy and distribution.

Production efficiency: High-quality production was previously only affordable for large studios. But new technologies and platforms have lowered the barrier for content production—enabling higher-quality outputs for less.

Audience engagement: Audiences are increasingly diversifying their digital consumption across gaming and user-generated content, while seeking meaningful community experiences. To stay profitable, M&E organizations should engage users on their preferred medium, including social media, to enhance audience retention and maximize customer lifetime value.

Advertising efficiency: Reimagining the ad experience will rely on customer insights, contextual awareness, and sentiment analyses that create personalization and relevance to the user. By improving the overall ad experience, platforms can better attract and retain customers, increase value to advertisers, and ultimately sustain a higher ROI.

The pathway to profitability

In today’s demand-driven media and entertainment ecosystem, companies should consider audiences and fandoms, rearchitecting their content library and capabilities to deliver compelling content to the right audiences, on the right platform, at the right price. The industry is expected to continue to face challenges from macroeconomic headwinds and increasing competition, but opportunities for profitable growth exist.

These opportunities vary by parts of the content delivery value chain, as mentioned in previous sections of this paper. However, at a macro level, M&E companies should look to unlock technological benefits, leverage strong alliances and ecosystem partnerships, and invest in franchise capabilities in order to build new audiences and make existing ones stickier. To lay a strong foundation and position themselves for the future, companies can focus on:

• Data infrastructure modernization.
• Next-gen analytics and modeling.
• Content supply chain innovation.
• New M&E coalitions.

The accepted truths of linear television were upended by streaming, so modern-day media and entertainment organizations should continue to adapt and invest in the creation, distribution, and display of content to remain relevant. The pathway to sustainable profitability will not be easy. And technological investments and partnerships may mean sacrificing short-term losses for longer-term ROI. But with the infrastructure and capabilities required to understand what the consumer wants today, and beyond, media and entertainment companies can take the lead—and emerge victorious.

Our content ROI capabilities

Deloitte provides a strategic lens across studios, distributors, streamers, advertisers, and marketers to help you navigate the quickly evolving M&E landscape—and identify the best opportunities to create value.

Our content monetization services can help you:

• Leverage data and analytics to better understand consumers.
• Assess current marketing budgets and targeting.
• Forecast financial outcomes.
• Break down siloed data and decision-making.
• Address distribution challenges.

Want to learn more about our approach? Let’s connect.