Growth in complexity and volume of VOD is inevitable.

We want more of our content to be available to more consumers on more devices, generating more revenue. Global online TV revenues are forecast to grow to around $20bn by 2016, from $3.5bn in 2010 . We want the data that our VOD viewers choose to share with us to flow back to us, allowing us to promote and recommend other things they’d like to watch.

But does that mean that as we scale up our ambition and revenue our costs must scale too?

 

WHERE DOES VALUE GET ADDED?

In my view, value for Video On Demand is added in four areas:

  1. Of course, the majority of the value is in the content creation and is generated when the item is first made. This, after all, is the reason content is purchased, watched, saved, shared and rewatched. This value drives all other values.
  2. Additional value can be added during content manipulation. For example when a French movie is translated and localised for German audiences.
  3. Content transcoding adds value by ensuring content will play on an end device like a tablet.
  4. The last value-add is the ability to return consumption, demographic and interaction data to content and platform owners to generate additional value, which includes simple upselling like “if you like this, you’ll like that…”. Also, given that 64% of Generation X and 74% of Generation Yuse a second screen while watching TV, metadata gives us the ability to synchronise second-screen content with first-screen action.

 

COMPLEXITY INCREASES BEFORE IT REDUCES

Television, and specifically getting the right media at the right time to the right place in the right quality, is getting steadily more complicated. The growth/complexity/speed paradox is universal. It’s even got its own abbreviation – the “Three Vs” – of Volume, Velocity and Variety.

Shigeo Shingo, a co-developer of the Toyota Production System from which Lean Manufacturing was developed, observed that “it’s only the last turn of a bolt that tightens it”; all the turns until the last are “waste”. But by making sure value is added over the whole value chain, customer perception and recognition of value is increased, bad experiences can be turned into good, and quality improved.

 

SO, HOW DO WE HANDLE THE GROWING COMPLEXITY IN MEDIA?

Great processes and automated self-healing workflow, supported by reliable, flexible systems capable of rapid growth are essential. But the people involved make the difference, and people adding value in the right place and at the right time supported by lean processes and autonomation (that means automation with a human touch) which prevents defective products from moving on can simplify our otherwise ever-complex value chain.

What successes or failures have you had in implementing lean processes? Are there other ways to add value to VOD? Let me know what you think in the comments below.

 

Jeremy Sedgley, Head of Change Management