International Expansion -- The Case for Title Monitoring

"We are running into the global arena faster than anybody," Jeff Hirsch, Starz COO declared at a June 2019 conference. He was referring to the fact that the Starz digital platform will soon serve over 50 territories throughout the world. Starz is not alone in focusing on global growth; Roku reported, in its recent fourth quarter earnings release, an expansion into Brazil, one of the largest digital markets in Latin America, as well as a diversification strategy away from its heavy U.S. focus. As content owners and platforms grow geographically, so too is the depth of consumer distribution touchpoints‚Äîtake for example Acorn-TV, the largest purveyor of British themed programming in the U.S. Acorn is now available over Apple TV Channels, Roku Channels, Amazon Channels, Android TV, Chromecast, Comcast/Xfinity, and via Vizio Smart TV.

Why so many venues for Acorn? The competition for eyeballs, subscriptions, and share of consumer discretionary spending is clearly intensifying. To secure a foothold within such a diversified global audience, content owners and platforms need to be where the viewers are. They want their assets available for viewing on license window start dates, to feature accurate, localized metadata/artwork, and to be displayed properly within listing pages. Equally important is confirmation of the relevancy of programming selection and curated choice for consumers. But all of this is not so simple.

The level of complexity needed to perform these tactical compliance checks, while simultaneously achieving business goals, is daunting for resource constrained companies. Indeed, Spherex analysis has discovered that over 90% of episodic titles do not move to on-demand folders as part of the next-day-TV release window and approximately 45% of features are not taken down by license window end dates.

These monitoring tasks, when not diligently and systematically performed, have the lasting and cumulative effect of suppressing potentially higher return-on-investment metrics and confidence within underlying distribution and licensing agreements. With price remaining the principle consumer consideration for a subscription package, the majority of content platforms (outside of the few very large market dominators) complete on the basis of specialized focus and the ability to refresh with ongoing compelling content and overall product quality. A series of recent commentaries looking at the evolving media subscription-based commerce landscape predicts (not unlike retail eCommerce) one-in-five digital content consumers will consider cancellation as they no longer want the content presented (i.e. not compelling vs. other offerings), while one-in-ten will claim deterioration in product quality, including product descriptions.

Overall, a conservative estimate for this rate of churn can be taken at approximately 10% post the initial subscription period. With the assumption that a targeted D2C streaming platform achieves a successful market position with 1MM global subscribers paying on average $4.99 per month each, annual revenue loss due to overall churn could be as high as $500,000; if one-fifth of this is attributable to lack of competitive content catalog and product quality, that equates to an avoidable annual loss of $100,000 to the bottom-line. Believing in the competitiveness of a catalog/programming assortment relative to competitive outlets and knowing that factors influencing product quality are being monitored, the threat to financial stability and growth for subscription platforms--especially across a global audience base‚Äîis removed.

Related Insights

Spherex Classification Tool Now Approved for Home Entertainment Content in Australia

Spherex

Regulation

Classification

The Albanese Government has updated the Spherex Classification Tool approval to include ratings for theatrical releases, home entertainment, and streaming content in Australia. Spherex was previously approved to classify online films.

The update underscores the Australian Classification Board’s confidence in Spherex as a tool to help Australian viewers make informed choices about the content they consume. This means Australians can now access a range of new films sooner than they might across all formats and windows.

Spherex has a longstanding relationship with the Australian Classification Board. Since 2020, Spherex has collaborated closely with the Australian Government to ensure its technology reliably generates classification decisions that meet Australian standards and viewers' expectations.

As the world’s only commercial provider of local age ratings, Spherex has successfully produced classification decisions for high volumes of online content in over 100 countries. Since 2018, Spherex has issued over one million age ratings for digital content, including films, TV shows, and trailers, distributed by its clients worldwide.

Spherex customers, including Umbrella Entertainment, Madman Entertainment, and Sugoi Co., rely on its AI-based platform to obtain local age ratings in Australia and significantly improve efficiency, cost reduction, and market reach.

Discover how Spherex's cutting-edge AI-based platform can streamline your content classification process and enhance your market reach while reducing costs.

Visit spherex.com today and see how we can support your content distribution needs.

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nScreenNoise - Interview Spherex: Avoiding the cultural dead zone

Spherex

Culture

One of the conundrums of streaming is that although a service can deliver content globally, it is not guaranteed to be acceptable in a particular local market. Netflix found this out when it announced global availability in 2016 at CES and was quickly banned in markets like Indonesia, where some of the content was deemed too violent or sexual. In 2016, without boots on the ground in a local market, it wasn’t easy to assess whether a show or movie would be culturally acceptable.

Today, global media companies are acutely aware of the importance of their content’s cultural fit. Moreover, they have a company like Spherex to help them prepare their content to ensure it fits with any country of interest. I interviewed Teresa Phillips, the Co-Founder and CEO of Spherex, at the recent OTT.X Summit in Los Angeles. She explained how the company is leveraging AI and its massive cultural profiling database to help companies prepare content for target markets. She also explained how, in the near future, AI would aid the company in measuring a movie or show’s cultural distance from a regional market and help it avoid falling into the failure zone between cultural fit and novelty interest.

Listen to the full interview here.

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Spherex Featured in the DPP's IBC 2024: Demand versus Supply Report

Spherex

Industry

Spherex was featured in the DPP’s IBC 2024: Demand versus Supply Report, a comprehensive look at how the M&E industry is meeting key customer demands. The report focuses on the topics of empowering creators, understanding audiences, engaging users, and innovating the newsroom. It also highlights many of the technical innovations seen at the recent IBC Show.

An article by Spherex’s CEO Teresa Phillips titled "Navigating Cultural Resonance in Global Media: The Art and Science of Culture Mixing" was featured in the report, exploring how Spherex is pioneering the future of culturally informed content.

Teresa shares how cultural mixing has become a critical strategy for creating content that appeals to diverse audiences in today's global media landscape. This phenomenon involves blending elements from different cultures to craft films and television shows that resonate globally while adhering to local regulations.

However, the process of culture mixing is fraught with risks. Superficial or stereotypical representations can lead to accusations of cultural appropriation or insensitivity, alienating audiences and damaging a company's reputation. For example, imposing Western concepts on Eastern content without proper context can feel inauthentic and jarring to local viewers. These missteps highlight the need for a nuanced understanding of cultural elements to ensure that content is respectful and engaging.

To address these challenges, M&E companies are increasingly turning to data-driven solutions. Platforms like SpherexAI utilize artificial intelligence to analyze visual, audio, and textual elements, providing insights into how well content aligns with cultural and regulatory standards across over 200 countries and territories. This approach helps media companies understand the "cultural distance" between a title's origin and its target market, enabling them to make informed decisions about global distribution.

By leveraging these advanced tools, M&E companies can go beyond traditional content localization. They can create media that actively engages and resonates with diverse audiences. As the industry continues to evolve, those companies that embrace culturally informed, data-driven approaches will be better positioned to succeed, fostering cross-cultural understanding and trust while delivering globally appealing content.

Download the report here.

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