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What is Media Content Licensing and its Role in Online Streaming Industry
  • By Rakesh Samantaray
  • 27 August, 2019

What is Media Content Licensing and its Role in Online Streaming Industry

 

It doesn’t matter whether you are just starting out or already have established a strong position in today’s OTT market, licensing media content can always benefit you in terms of engaging & retaining OTT subscribers.

Well, content licensing in online streaming realm is not a new terminology. Since the inception of OTT distributions, service providers have been licensing popular & on-demand titles from content owners/media distributors to keep their subscribers satisfied.

Basically, media licensing agreements are established under legal contracts between the licensee (content owners) and the licensors (streaming service providers). Both the parties negotiate and define the license’s term period & royalty conditions and then jump into a deal to earn a lucrative recurring revenue.

For your information, media content licensing is primarily categorized into two segments – exclusive and non-exclusive. Exclusive licensing agreements are limited to a single streaming platform for a set period and are often expensive. However, non-exclusive content licensing terms are available to multiple streaming services at the same time, and thus are less expensive to obtain.

Depending on your budget & expenses, you can either opt for exclusive content licensing or non-exclusive licensings.

For a better understanding about the entire process of media content licensing, let’s move further and have a look at some practical advantages of licensing copyrights of popular movies, webseries, music videos, & other digital media content.

Advantages of media content licensing in streaming industry

 

1. Saves both Time & Money

Although producing original content is a great way to lure & retain today’s fluctuating OTT viewers, still it’s way too expensive. You have to hire a production company, a creative director, an experienced camera personnel, a script writer and many other professionals, unless you are a content creator and have your own team. The process not only takes a lump sum of money but also consumes a hell lot of time.

In such situations, licensing media content is the best alternative. You can save both time & money and at the same moment can license popular titles that the audience would love to stream on. The extra budget that you will save bypassing the content production, can be then used for marketing & distribution.

Well, in simple words, paying a small royalty fee for a piece of engaging video is much worthier, easier, and less expensive as compared to investing huge amount in producing original content.

2. Balances Content Publishing Frequency

OTT audiences are always hungry for exclusive content that they have not streamed before. To retain such desperate streamers, it’s important to update the content library regularly with new & interesting videos.

In case, you fail to add new content to your library, no matter what’s the reason, for sure, the audience will feel bored & irritated to stream the same repetitive content, and may decide to drop your subscription program without giving a second thought.

The best way to avoid such unfortunate scenarios is to license popular titles from media distributors & content owners, and publish them on your streaming channel. This will not only balance the content publishing frequency but also minimize the distribution gaps.

Our experts recommend to strictly follow a dedicated content calendar and scale up the OTT platform’s content requirements as per users demands & market trends.

3. Boosts up Brand Credibility

How about, if you license the copyrights of Game of Thrones for publishing the content on your OTT platform?

Well, for sure, your subscriber’s base will simply skyrocket overnight.

It is always wise to license popular content that are in demand among the streamers. Such content greatly compel the viewers to sign-up & stick to the streaming platform, which then ultimately contributes to brand credibility and improves the exposure & visibility of the OTT service in the competitive market.

Case Study of Netflix justifying the importance of Content Licensing

Back in 2008, when Netflix started online streaming service, it used the media licensing strategy to maintain its content library. Through a 4-year acquisition agreement with Starz, Netflix got its streaming off the ground for the very first time. After witnessing a positive response from online viewers, the brand then continued licensing popular content from Disney, NBC, AMC networks, and other traditional production houses.

However, by 2013, Netflix realized the need for exclusive content and hence introduced the concept of ‘Netflix Originals’. House of Cards, was the first series under Originals and the OTT audiences just loved it. Eventually, Netflix invested more on original content like The Umbrella Academy, The Punisher, The Great British Baking show, Narcos, and Orange Is the New Black, which greatly helped the video streaming company to establish its network all over the world.

But amidst all these original content, there lies a hidden truth of content licensing, which only a few industry leaders know about.

Actually, many of the original series that had put Netflix on the map, were not made by Netflix. Those were directly acquired from the traditional studios that make exclusive shows for various TV networks.

House of Cards (known for Netflix Originals) was licensed from Media Rights Capital studio, Orange is the New Black came from Lionsgate, You and Riverdale were first aired on US TV and then used as Netflix Originals internationally. Even the popular Spanish web series – Narcos was also licensed from a third-party production house and published under the Netflix Originals.

Don’t be confused!

Netflix smartly uses the term ‘Originals’ for content that are exclusive to its platform, but licensed from other studios after first being made available elsewhere. And fortunately, these must-watched licensed content that are not available on any other online platform became a big selling point for Netflix.

According to a survey report, nearly ⅔ of viewing hours on Netflix come from licensed content or so-called Originals. And around 78% of total revenue generated from US streaming network belongs to these licensed content.

So, this is all about how Netflix, the video streaming giant, is still using licensed content to generate a majority of its revenue and thrive in today’s OTT industry.

Hope, now you are clear about what is media content licensing and its importance in streaming sector.

We at Sanjh completely comprehend the need for digital media licensing and accordingly have developed our content marketplace using Blockchain Technology. Every licensing or transaction on Sanjh is fully safe & secure, no need to worry about piracy and undefined royalty terms.

Explore our content library now and license your favorite piece of content at one-click.