Presto aiming for 'loss-leading' content strategy

James McGrath
By James McGrath | 3 June 2015

Presto is hoping to scupper its competitors by commissioning 'loss-leading' pieces of local content, hoping to have the first one in the bag by Christmas, AdNews understands.

With subscription video on demand (SVOD) platforms Stan and Netflix now live in the marketplace, Presto is looking for the next marketing push to claw share from its competitors.

A loss-leader is generally described as a piece of content which doesn't directly make a profit, but helps drive subscriptions because of its quality.

It is thought the cost of the content would not normally justify the level of investment required to sign off on the deal. The strategy has been justified internally by suggesting the increased cost of the outlay would be matched by the marketing power of the content.

“It [Presto] really want this to be buzzy,” one source said “It's really going after one or two pieces of content that get people through the door.”

“It's sort of what you'd see with the Olympics. Nobody makes money from those, but networks go after them anyway because the marketing value in that piece of content is just phenomenal.”

It is thought the piece of content it has secured is a local production, with a budget far and away higher than would normally be considered for a production of its type.

Presto declined to comment on the speculation.

The revelations come as joint venture partners Seven West and Foxtel begin to explore production models with Presto, and how one piece of content may be shared or even co-produced between the networks and Presto.

One such result of the joint venture's early thinking is the appearance of US drama Aquarius on the Presto platform.

While Seven West ordered the program from NBC Universal last year before its involvement in Presto was made public, but last month Presto announced the series would be available in full on the platform before it appeared on Seven.

The arrangement, however, was only made possible due to the fact that NBC has decided to present the series on a binge-watch basis in the US too.

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