The Content Acquisition Imperative: Licensed vs. Original

The decision to license content versus producing original programming (the “buy versus build” approach) is the first and most critical strategic choice an executive must make.

Licensing—the primary mechanism of content acquisition—allows a buyer to use and distribute existing material created by others under a legal framework of content licensing agreements.

The Core Trade-Off

• Original Content (Build): Serves as a key differentiator and brand builder, creating unique value propositions that drive new subscriber acquisitions and retention. The downside is the high financial commitment, long development cycle, and the inherent risk of an unproven title.
• Licensed Content (Buy): Fills content libraries quickly, addresses audience demand efficiently, and often comes with established audiences, expanding market reach instantly. The primary risk is market fragmentation, where key titles—like Friends or The Office—can be prohibitively expensive to secure exclusively, or lost entirely to a competitor.

The most successful strategies involve a sophisticated blend, balancing high-budget “tentpole” original productions with a flow of licensed content that caters to specific audience segments and enhances subscriber retention. To optimize this mix, executives must use data analytics to accurately predict potential ROI for both.

Navigating the Global Content Acquisition Landscape and Key Deal Structures

Content acquisition involves navigating complex deal structures with content sellers, production companies, independent creators, and international sales agents. Understanding the type of license secured is fundamental to its value:

• Exclusive vs. Non-Exclusive Rights: Exclusive rights, like those secured for major franchises, command a premium because they restrict distribution on all other platforms.
• Territory-Specific Rights: Content deals are frequently broken down by region, allowing for specialized acquisition strategies to secure local-language content that aligns with a target market’s preferences. The strategy for acquiring international content in markets like the South Indian film industry, for instance, is seeing massive financial corrections as streaming platforms become more selective, reducing acquisition prices significantly.
• Platform-Specific Licenses: These dictate whether the content can be offered on a subscription video-on-demand (SVOD), transactional video-on-demand (TVOD), or ad-supported video-on-demand (AVOD) basis.

Beyond traditional licensing, the term content acquisition also encompasses full-scale corporate mergers and acquisitions (M&A).

These deals, which can be horizontal (acquiring a competitor) or vertical (acquiring a supplier like a production studio), are typically complex, requiring significant due diligence to manage legal, fiscal, and financial risks.

Learn more about the latest trends in OTT industry content acquisition.

The Operational Bottleneck in Content Acquisition: Sourcing and Due Diligence

The most significant operational challenge in content acquisition is the sourcing phase: identifying, tracking, and vetting thousands of potential titles and rights-holders globally. This phase is defined by three critical functions:

1. Market Sourcing and Discovery

Executives need an early warning system to find upcoming film and TV projects currently in development or production—not just those already on the market. Relying on traditional market attendance or personal relationships is slow and provides incomplete visibility, forcing companies to overpay when a project gains buzz. The need is to identify emerging IP, greenlit projects, and available content before the competition drives up the price.

2. Verified Contact and Rights-Holder Mapping

A deal cannot start until the rights-holder is found. The media landscape is notoriously complex, with rights often fragmented across multiple international distributors, sales agents, and financiers. Manual scouting and vetting lead to high resource costs and missed opportunities due to an inability to centralize verified contacts and accurately map project ownership.

3. Content Valuation

The practice of content valuation requires treating every title as a dynamic financial asset. Value assessment must move beyond simple past performance metrics to predictive analytics, considering potential audience reach, market trends, production quality, and the specific cost of acquisition (CAC) relative to expected customer lifetime value.

This requires sophisticated tools to track content and measure its performance in real-time, reducing the risk of churn and optimizing spend. For a full analysis of the due diligence process in M&A, refer to the work by Investopedia.

Strategic Frameworks for Modern Content Acquisition

Modern content acquisition strategy is not about chasing the loudest buzz; it is about data-driven precision. Executives must adopt frameworks that integrate continuous intelligence across their operations:

1. Demand Forecasting via AI: Leverage data analytics to drill down into precise audience trends, segmented by location, age, and viewing history. This moves beyond general preferences to allow platforms to map content directly to their specific user base and reduce the risk of subscriber churn.
2. Zero-Based Budgeting (ZBB) for Content: Instead of relying on legacy budget growth, M&E companies are being forced to adopt a zero-based mindset, focusing on what content should cost to acquire, rather than what it historically has cost. This requires a detailed, title-by-title financial analysis to ensure investment aligns with the maximized bottom line.
3. Global Co-Production and Localization: The focus is shifting to local expertise and co-production partnerships to access high-quality international content. This strategy minimizes risk and optimizes local market appeal by partnering with studios that inherently understand their audience.Read our guide on how to acquire international content.
4. IP Consolidation and Franchise Building: Acquisitions are increasingly aimed at controlling valuable Intellectual Property (IP) to create long-term engagement through multiple seasons, spin-offs, and opportunities for merchandising.

Conclusion: The Future of Content Acquisition is Precision

The era of blanket spending on licensed content is over. The future of content acquisition is defined by surgical, data-backed investment decisions.

Executives who successfully navigate this landscape will be those who move away from manual, fragmented sourcing and embrace continuous intelligence to manage risk, optimize spend, and secure the titles that genuinely drive subscriber lifetime value.

The imperative is clear: transform content acquisition from a reactive function into a predictive, data-led strategic advantage.