In the last week analysts increased targets for Netflix alongside a record-breaking week for the stock, which peaked at $423.21 Thursday morning -- an all-time high. A lot are betting that the Netflix rally will continue well into the future. With more media consolidation on the horizon, analysts expect Netflix to reap a healthy share of the benefits of an ongoing market shift to "over the top" (OTT) TV models. A recent survey finding says that 73% of U.S. households would choose a Netflix subscription first if they could only pay for three subscription services. Would we have imagined a decade back about OTT becoming an integral part of a household?
In December 2017 Cengage a leading publisher announced an offer called Cengage Unlimited, that would give students access to more than 20,000 Cengage products across 70 disciplines and 675 course areas for $119.99 a semester. For 12 months’ access the price is $179.99, and for two years the price is $239.99. For students taking three or four courses a semester with assigned course materials from Cengage, the subscription could offer hundreds of dollars of savings a year, versus buying or renting the products individually. Cengage has set a strategic goal of being 90 percent digital by 2019. The new strategy is a notable departure from the traditional publishing sales model which is only print focused. The interesting part is that this offer is in addition to an existing eBook and print rental program.
With the advances in technology, the evolution of the internet and the deep inroads made by AI and Machine Learning in the digital world there will be quite a lot of disruption in the near future. Almost every content owner out there is working on strategies to ensure that they retain market share and do not lose out during this phase. It is clear that there will also be consolidation across the industry and the larger organizations would acquire quite a few of the smaller ones in specialized domains for that competitive advantage. The consumer also is at advantage as there are so many options available today with all being equally good if not better.
As a platform and content owner I have spent quite a lot of time and research thinking about the right pricing strategies as the right pricing and positioning would be key factors going forward. Based on the product mix I think the key pricing models would be:
Platform as a service (PaaS) - Cloud platform services, or Platform as a Service (PaaS), are used for applications, and other development, while providing cloud components to software. What developers gain with PaaS is a framework they can build upon to develop or customize applications. PaaS makes the development, testing, and deployment of applications quick, simple, and cost-effective. With this technology, enterprise operations, or a third-party provider, can manage OSes, virtualization, servers, storage, networking, and the PaaS software itself. Developers, however, manage the applications.
Enterprise PaaS provides line-of-business software developers a self-service portal for managing computing infrastructure from centralized IT operations and the platforms that are installed on top of the hardware. The enterprise PaaS can be delivered through a hybrid model that uses both public IaaS and on-premise infrastructure or as a pure private PaaS that only uses the latter.
Example use cases – Digital Asset Management, Content Management Systems, Document Management Systems and similar frameworks of content owners.
Software as a Service (SaaS) - Cloud application services, or Software as a Service (SaaS), represent the largest cloud market and are still growing quickly. SaaS uses the web to deliver applications that are managed by a third-party vendor and whose interface is accessed on the clients’ side. Most SaaS applications can be run directly from a web browser without any downloads or installations required, although some require plugins. Because of the web delivery model, SaaS eliminates the need to install and run applications on individual computers.
With SaaS, it’s easy for enterprises to streamline their maintenance and support, because everything can be managed by vendors: applications, runtime, data, middleware, OSes, virtualization, servers, storage and networking. Popular SaaS offering types include email and collaboration, customer relationship management, and healthcare-related applications. Some large enterprises that are not traditionally thought of as software vendors have started building SaaS as an additional source of revenue in order to gain a competitive advantage.
Example use cases – LMS, LCMS, Compliance frameworks, authoring tools etc. These can be provided to both customers and partners for a financial consideration. This would bring about a lot of efficiencies and also help in cost arbitrage.
Information as a Service (IaaS) – This is a very interesting and upcoming pricing model. Information as a Service is an emerging cloud business model in which a company share or sells relevant Information to another company or individuals to perform their business. In the world of cloud computing where storage and compute are accessed using well-defined APIs, we also have available to us information that can be as easily accessed, also using well-defined APIs. Following are general example of Information as a Service:
Information from certifications, experiments etc.
Validation and lookup services
Payment processing services
Services that validate or complete data
Example use cases – Blockchain ledgers for students right through educational career, validation of projects, reports, contributions to articles etc.
Intelligence as a Service (IaaS) – With the inroads that AI and Machine Learning are creating in the content domain content owners could look at a few variants for Intelligence as a service. These are:
Artificial Intelligence as a service (AIaaS) – This Stanford article explains it all. Please read the article at https://mse238blog.stanford.edu/2017/07/ramdev10/artificial-intelligence-as-a-service-aiaas-on-cloud-promising-next-industrial-revolution/
Business Intelligence as a service (BIaaS) - BI-as-a-Service means getting the benefits of a full, end-to-end business intelligence solution “pattern”, but with the ease and simplicity of deployment associated with Cloud. There are three main functional ingredients to ensure a great business intelligence or self-service reporting solution. These are:
Data that is seamlessly extracted from multiple sources and pulled together into one place
A well-designed data warehouse, in order to organize, join together and host your data in a high-performance way
A great UX design that users will like to use
A business intelligence as a service (or BI-as-a-Service) solution delivers all three areas: extracting data from your core systems, organizing it into a high-performance data warehouse, and giving business users access to this warehouse through a natty front-end. It’s still fast to implement and easy to afford, like any other Cloud system, but crucially, it’s end-to-end.
Please feel free to add your views and comments....