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Pay-per-view streaming is possible with e-commerce technology and digital rights management, but these media commerce systems are only just now becoming commercially available. The downside with pay-perview and video-on-demand streaming is that the cost of each additional customer, in terms of bandwidth, scales with the number of viewers. The greater the number of viewers, the larger the content provider s bill for bandwidth. This is somewhat mitigated by the use of CDN edge networks, however. In this model, provision of each and every stream has to be profitable. With the quality and bandwidth limitations that currently apply to on-demand streaming, this model has not yet matured. However, in the future it may become one of the dominant models for streaming media access.
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This is easier to do technically and administratively than pay per view. However, to get a consumer to sign up for a subscription is difficult, since customers require compelling reasons to trust in the quality of as-yet-unseen programming. Subscription services need to offer attractive media trailers and money-back guarantees to attract subscribers in the first place. Having signed up subscribers, they need to deliver on the customers expectations, or else risk subscriber retention problems. With less stringent copy-protection systems, rather than full-blown
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digital rights management, this model can be realized quite simply. In common with all streaming media s current business models, however, this model is not mature. Bandwidth charges are still too high for content providers and end-user quality of experience is inadequate for most consumers.
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This is analogous to commercial television, where media access is free at the point of experience, but paid for by advertisers who interleave their ads with the content. Streaming advertising is already beginning to be trialed. There is still some resistance from advertisers who question the current viability of the medium, but streaming offers several new advertising methods, which are not as obtrusive as other types of inline advertising. Besides in-stream ads, streaming banners are feasible. The media player application also allows banner ads in the media player window and allows the use of the player border for advertising. Also, the response to streaming media advertising is directly measurable over a back channel, with appropriate software tools now becoming available. Ad personalization is also technically possible, allowing advertisers to target qualified niche audiences with finer granularity and less waste. Unfortunately, streaming players also make it relatively easy to skip over the ads. There may need to be an explicit agreement between the end-user and the media provider to watch the ads (this can be monitored by software in the player) in exchange for free access to content. The advertising models offered by streaming media technology are more flexible than the broadcast television model.
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Instead of making you watch ads for products, content providers may sell to you directly, making media access free, as long as enough people buy products alongside the media. This could work along the same lines as the cable QVC channel, except that the content need not be pure selling. For example, a band could make streaming video clips available, alongside an e-commerce site that offers CDs and T-shirts for sale. As long as the aggregate profits from merchandising covers the media distribution costs, this model is viable.
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The Business
Trading Private Data for Streams
Often, the most valuable thing to a company is market research data. Rather than playing ads, the content provider could exchange access to streaming media for answers to market research questions. Consumers would be required to fill in answers and explicitly agree to allow the content provider to use that data for commercial purposes. Unfortunately, most people perceive the data they give up as more valuable than the media access they receive in return. They are also concerned that the data will make money for the content provider time and time again, whereas they only get access to the media once. In order to break this stalemate, consumers rights to their private information and preferences need to be equally protected with digital rights management, so that the exchange can be made more symmetric and fairer. With right management of the answers to the market research questions, content providers could agree to certain terms of use covering the data. Consumer would have some confidence that their privacy requirements would be met, policed, and enforced by something stronger than the mere privacy assurances that Web sites offer today (i.e., digital rights management). As with all rights-managed transactions, however, people of limited or no interest to market researchers, such as the poor, the elderly, or the unemployed, would be excluded from accessing media for free in exchange for data. This would lead to the anomalous situation where the poor pay more for media access than the rich.
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