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Straight Talk Telecoms

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In April 2016, I had an opportunity to visit the NAB show in Las Vegas. Although there were number of key trends observed from the conference stage and on the show floor, the increased focus of media enterprises on virtual reality (VR) was the highlight. This paved the way for me to look into the real opportunities and implications of VR on the content supply chain workflow.

VR opens up new monetization opportunities but also increases rights and royalties complexities. Today, the VR segment is following the 3D technology roadmap – that is, it is initially being dominated by hardware vendors, similar to the TV screen manufacturers in 2010. The eventual rise in adoption of VR devices will push tomorrow's media enterprises to invest aggressively in 360-degree video repositories involving production costs that are, on average, 40–50% higher than SD format-centric rich media. Although this opens up a new monetization window for premium media asset owners such as content aggregators and broadcast TV and video companies, the new content format also introduces rights management challenges.

Legacy rights and royalties systems need to embrace the new 360-degree video format. Traditionally, the majority of rights and royalties deployments have failed due to a lack of in-depth data configuration and poor end-to-end automation of contract modification functionalities. A single VR content rights monetization cycle might involve the addition of newer multichannel distribution agreements (e.g. on Samsung's Gear and smartphones), customized participation royalty processing (as per the multimedia segment, including film, TV, and gaming), and diverse windowing policies. Therefore, a strong fit to the changing business requirements is a must.

Is this an opportunity for managed services providers in the media repurposing space? As VR content rights become mainstream and VR eventually becomes one of the most engaging content formats across both media and non-media segments, such as healthcare (virtual doctors) and education (virtual classrooms), real-time repurposing and managing cross-platform rights and royalties will be core challenges. This could pave the way for premium media asset owners embarking on the VR journey to leverage managed services relating to a rights and royalties module. In a complex VR content production ecosystem involving multiple stakeholders, enterprises can leverage managed services pertaining to contract administration and royalty processing, and data entry, configuration, and integration with internal and shared systems on a regular basis.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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