You are involved in the digital video business at a major network or entertainment company. As times get tougher, it might be hard to think that there is an opportunity to make digital video into a profitable business. However, today's economic climate, if viewed properly, actually makes moving new business opportunities, such as digital video, toward profitability simpler.
Why? During periods of economic prosperity we have the tendency to spend money on anything that sounds plausible. During tighter economic times, however, budgets are reduced and options are fewer, so resources need to be focused on achievable and profitable goals. If new businesses and their teams focus on the basics of achieving profitability in stringent economic conditions, they will be that much better positioned to accelerate profitability through sound expansion as economic conditions improve. Not to mention, online consumption of top programming is expanding exponentially, digital video content management and media rights management (DRM) are widely available and maturing and CDN distribution costs for high quality and near HD content are continuously decreasing.
So, how should management approach this challenge? First, it's critical to develop strategies that can be achieved and measured in just a couple of quarters that build profitability with relative straightforwardness. An example of a strategic goal might be to develop an ad sales operation flush with a rich (but not unlimited) number of ad products, avail capabilities and avail types that can be sold against all content on a fixed number of properties. A tactical execution plan that pursues a simplified approach for allowing different teams (ad sales, ad ops, player engineering) to function cohesively yet autonomously will create that solid foundation for future growth. As profitable results are achieved, ad products and avail successes can be measured and fine tuned allowing immediate expansion to more properties with a cohesive offering and streamlined low-cost operations.
Syndication will naturally follow and, similarly, developing a strategy that becomes tactically repeatable is the key. Instead of focusing on fewer syndication points, the plan should be to concentrate on tactical ease that becomes
