Harnessing The Power of Original Content for Leverage in Distribution Deals - Gary Reisman

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The LEAP™ Report -Leveraging Emotional Attachment for Profit

The cable industry has been rapidly changing over the past six years. No longer is cable about airing second- or even third-run content. Its future is in original content, and cable TV networks have begun to pump more resources into those endeavors.

Over the past six years, the cable industry has spent more than $190 billion developing and investing in original content.

Most media executives believe original content is needed to stay relevant and build ad revenues. There's more to it than that. Original content that has a dedicated and passionate following is a great way for cable networks to lock in their distribution deals.

In the dance between cable networks and cable operators, negotiations are an ongoing process. Cable operators can only afford to pay for so much content and most certainly over time will need to drop networks that have less powerful marketplace appeal. The stronger and more loyal a following to a network and its original shows, the less likely cable operators are to drop that network.

Think of AMC with the success of "Mad Men" and "The Walking Dead." These shows have such loyal audiences that any cable operator who attempted to drop the network would be foolhardy indeed. Customers and loyal fans would deluge cable companies with phone calls, emails, snail-mail letters and much criticism on social-media channels. After that, they would quickly flock to alternative distributors to follow those programs.

For example, according to NewMediaMetrics' LEAP ™ Index, "The Walking Dead" draws some of the strongest Emotional Attachment™ among viewers of any cable program. Strong Emotional Attachment means people will find it, take the time to watch it, DVR it, watch it on demand and/or watch it in any form/platform on which they can find it -- on their TV, their tablet or wherever they can access it.

This type of passion is what drives ratings success and commands high CPM's.

Consequently, a program like "The Walking Dead" enhances the marketplace value of the network, and in a dual revenue stream scenario, translates to distribution staying power and strong per-subscriber pricing.

NMM's LEAP ™ Content Investment Marketplace helps cable networks find their tent-pole shows by extracting the marketplace value of new show ideas prior to production. Financial resources are then diverted to the creation of shows that are predicted to draw the desired audiences the network seeks.

Quantifying the value of new original ideas on the front-end of the development process will not only assure these new shows will drive consumer viewership, but will also differentiate and build loyalty to the network itself.

The bottom line is -- content with strong Emotional Attachment locks in both sides of the dual revenue stream.

About NMM's LEAP Content Investment Marketplace
NMM uses a proprietary algorithm that calculates the Emotional Attachment consumers have various show ideas. LEAP Scores and Indexes are used to predict which new TV show concepts are worthy of investment because they are predicted to draw valuable and loyal viewing audiences. Over the past years LEAP has predicted success and failure of new TV shows with high accuracy rate. In fact LEAP has increase model success rates by over 32%, predicting ratings and rank orders of new broadcast shows with an accuracy of over 70%.

Gary Reisman is co-founder of NewMediaMetrics. Gary can be reached at gary@newmediametrics.net.

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