MGM Networks is expanding to OTT platforms and expects data-driven TV advertising to revitalize the studio’s library of films and TV shows.
Last year, MGM Networks launched an OTT app for the Comet sci-fi channel and saw 120,000 downloads despite minimal promotional spend, said senior VP Todd Parkin. The company plans to launch OTT apps for Light TV, a faith-based channel, and the action channel Charge, which can already be streamed online.
Broadcast distribution deals with Fox and, primarily, Sinclair – which owns the Comet and Charge channels operated by MGM – are the main source of revenue for the studio’s television business. But even the limited OTT data feedback has improved its ad offering, Parkin said.
Capturing OTT audience data “allows us to make some reasonable assumptions” about who watches its programs, refining the network’s pitch to advertisers, he said. OTT campaigns can also include data-driven services like matching to store credit card purchases.
OTT data reinforces MGM Network’s linear revenue stream.
With still-popular MGM series like “Stargate” or “Mystery Science Theater 3000,” Comet can sometimes match the audience numbers of a cable channel like Syfy, which is owned by NBC, but Comet ads come at a steep discount.
“Brands don’t trust digital or the audience reach,” he said. But data can close the rate gap between its ads and those of other networks.
MGM’s linear revenue is through multicast distribution, a compressed form of TV broadcast that typically doesn’t include live or high-resolution footage, or the standard program-to-commercials pod structure. (Music sub-channels and home shopping networks are the most common multicast channels.)
MGM loses value in its inventory due to brands’ low perception of multicast and streaming delivery, Parkin said. But there’s a great potential value proposition if TV buyers “bring an audience-based mentality where TV is more of a single marketing mix.”
Media ventures like YouTube Red, Amazon Video and TicToc, a news channel jointly launched by Bloomberg and Twitter in December, do a lot of the legwork to advance OTT inventory.
But MGM’s archive of content is well-positioned to take advantage, Parkin said.
For one thing, original content production is a mountainous cost MGM can mostly avoid. And since MGM compresses its programs into a multicast channel, it has an easy way to add TV distribution without the hassle of programming a new channel.
In other words, the more marketers think of TV advertising as “ads served to the big screen in the living room” regardless of whether they’re served by a cable network, the more effectively MGM Networks can monetize older films and shows.
“Those inventory rates are closing,” Parkin said. “And the convergence will accelerate as data enters the TV ecosystem.”
