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Why don’t online content marketplaces work? Riaz Mehta answers.

TCL FFalcon partners with allrites content marketplace

The rise in popularity of online content marketplaces has been well documented over the last 18 months - a growing trend fueled by the cancellation of physical content markets worldwide during the pandemic. Billed as a faster and more efficient way of buying and selling content, these online trading forums have been marketed as a solution to an antiquated and inefficient content licensing ecosystem, where deals are forever drawn out along with unnecessary back and forth.

My own involvement with them stems back to when I first came up with the concept to launch an online marketplace in Asia - as I passionately strove towards what I thought would reduce the distribution cycle and transaction costs for buyers and sellers worldwide. However, it wasn’t long before I found that fundamental industry problems remained, and I was faced with a new reality: that the idea that an online content marketplace could radically slash the time deals could be conducted was nothing more than smoke and mirrors.

So why don’t online content marketplaces work?

The reasons are three-fold.

Firstly, OTT buyers in particular are extremely data-driven and evaluate every single piece of content cautiously, especially the newer, more niche players who understandably don’t have massive budgets to play with.

Secondly, for buyers to get a deal signed off, they often have to go through multiple layers of approvals, potentially including a business case for their CEO to sign-off. Even if discovery for new content is more quick and efficient online, the timeline required to confirm deals often takes just as long as the traditional licensing model. The buying process remains complex, and with significant dollars and risk involved, deals will continue to take time unless pricing models are simplified.

Finally, greater transparency and flexibility is essential to foster partnerships for buyers and sellers and avoid things such as ‘silly’ offers on online marketplaces that only waste time and contribute to drawn-out negotiations which slow down the whole transaction cycle.

The above critical problems create nothing short of a bottleneck. And unfortunately, as soon as you introduce a single layer of complexity to the online content marketplace, all that initial promise and hope starts to crumble away.

So – is this the end for online content marketplaces?

The short answer is no. But the sector itself needs disruption before it can reach widespread adoption. It needs to open the door to experimentation. Buyers and sellers need the ability to experiment with content that reduces layers of bureaucracy and approvals, allowing executives to trial content without fear of failure. Imagine also how such a concept will appeal to niche players, who will be able to give the perception of having a large content library without actually being that large or putting much capital down up front, dramatically reducing the cost of acquiring content and having ultimate flexibility.

In essence, this new world is about finding the right balance where a buyer still commits with dollars while sales teams will be safe in the knowledge, they are guaranteed deals. The future of content acquisition needs to be flexible, data-driven and armed with a new business model that makes streamers entering the market sustainable and not falling by the wayside amidst the dominance of Amazon, Netflix and others. Soon, we will have created a system where independent streamers have a fair shot of success, and where every piece of content will also have an equal chance of being watched and monetized.

Disruption is coming. Watch this space.

Allrites is a global marketplace to buy and sell AVOD, Cable, and SVOD content rights for the best of global movies and TV shows. The company also offers content, marketing and business development strategy services to content buyers, as well as a revolutionary content licensing model called "allrites Content-as-a-service" that benefits both content buyers and sellers. allrites CAAS allows television content rights holders to monetize their content every day with guaranteed trusted buyers who are already part of allrites CaaS monthly subscription. While content buyers can access hundreds of hours of content at a low monthly subscription fee while providing flexibility to change the content mix.

Published on C21 Media


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