One of the things media companies are struggling with is how to effectively monetize their investment in content and brands in this new digital era.  While still in its early stages, Warner Music Group Chairman and CEO Edgar Bronfman, Jr. recently noted in their Q4 earnings call that the Cisco Eos platform was helping WMG “more effectively monetize the vibrant relationship between artists and fans.” 

How exactly is Eos helping media companies like WMG monetize or generate revenue from their online content? 

Let’s be clear:  what Eos does is help create the opportunities to monetize by enabling a compelling, interactive entertainment experience that is much easier for media companies to keep fresh.  The outcome of this type of experience is that consumers:

• visit more frequently
• stay longer, and
• ultimately consume more of their favorite content

That great engagement give media companies the opportunity to generate revenue through multiple channels:  advertising, e-commerce/merch sales, and/or subscription.  The choice of which revenue streams to pursue, and how hard they push them is up to the media company to decide what is appropriate for that audience and brand.

In the case of WMG, they’ve been able to grow the audience of their 21 Eos-powered websites to more than 1.7 million unique visitors per month (in the time frame roughly between August and December 2009) and found that audiences on Eos-powered sites are staying roughly 8.4 minutes per visit – or more than 25% greater engagement than on other WMG sites. 

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This longer time on site + a similar increase in the amount of content consumed + the audiences’ affinity for the bands whose sites they’re visiting = not only more “inventory” for advertising that WMG can sell through their partnership with Outrigger Media, but allows WMG to create differentiated subscriptions and merchandise.  For example, Paramore sold a super-premium bundle of their new album to fans coming to www.Paramore.net.  The premium bundle sold 4,300 copies for $39.99 in the first week.  Figuring that the average retail price of a CD is $16-19 dollars now, that’s roughly $10 in incremental revenue per unit WMG was able to generate because of this direct, vibrant relationship between fans and artists.  Paramore and Jason Castro are also developing a subscription-based revenue stream by offering premium experiences via online fan clubs powered by Eos.

Cisco Eos gives media companies the platform they need to efficiently create, manage and monetize social entertainment experiences. It doesn’t provide guaranteed access to unlimited revenue, but it gives media companies the tools and opportunities they can use to generate revenue — at the same time that the platform reduces their overall IT costs and complexity.

Stay tuned for more details on Eos coming out of CES over the next couple of days.