Media & Entertainment Pricing

Pricing for Media & Entertainment businesses 

What’s the key to balancing high profit margins and significant production costs in the media & entertainment (M&E) industry? For both business-to-consumer (B2C) and business-to-business (B2B) companies, the answer centers around a well-crafted pricing and packaging strategy, one that not only resonates with consumers but also stands out in a competitive market. 

This strategy is particularly evident in the B2C segment, where consumer subscriptions have long been a fundamental part of the media landscape. As direct-to-consumer (DTC) and digital video services grow, M&E businesses are placing greater emphasis on customizing their subscription offerings and pricing to suit varied customer preferences. This often involves not only offering diverse packages at different price points — a strategy that is crucial for unlocking commercial success — but also integrating and pricing new products, ancillaries and revenue streams, which are vital for ongoing business growth and value creation. 

In the B2B landscape, establishing the optimal pricing structure to drive long-term value is equally vital, whether it involves selling rights, content, advertising inventory or services. This process frequently requires a combination of sales team expertise, thoughtful negotiation and advanced analytics to achieve the desired pricing outcomes. 

Why L.E.K. 

At L.E.K. Consulting, we’ve honed our end-to-end pricing capabilities within the M&E sector, supporting both B2C and B2B clients in building and executing high-impact pricing strategies. Our extensive commercial knowledge across the M&E spectrum informs our approach, leading to innovative solutions that leverage an unparalleled understanding of customer needs, value-chain complexities and competitive dynamics to quickly realize value through price. 

Our experience extends across various segments of the M&E landscape, including movies, television, music, sports, gaming, live events, site-based entertainment and more, and encompasses a wide range of project types: 

  • Pricing and packaging for subscription video services
     
  • Rights packaging and fee negotiation support
     
  • International pricing for DTC and licensed content
     
  • Ticket pricing for events and performances
     
  • Revenue optimization for game day and live events 
     
  • Membership subscription pricing models
     
  • Support services and tailored B2B pricing strategies
     
  • Ancillary revenue pricing techniques
     
  • SaaS pricing solutions

Our approach

We believe in delivering actionable pricing recommendations — not just theoretical concepts. Recognizing that an effective pricing strategy is an evolving journey, we focus on continuous refinement and optimization in response to changing markets and customer behaviors. We help our clients strengthen their internal pricing capabilities so they have the tools and processes in place to react proactively and strategically to any changes in market and consumer demands. Our commitment to practical, adaptable strategies is particularly crucial given the complex array of pricing questions faced by M&E businesses, including: 

  • How should potential customers be segmented and how do different segments value our product?
     
  • What pricing strategy and model will create the most long-term value for our business?
     
  • How can we optimize existing pricing models and levels to expand revenue and margins without compromising on growth?
     
  • How should new products or service lines be priced to achieve success for both the new product and the company as a whole?
     
  • What is the value-maximizing pricing approach given the lifetime value (LTV) of the customer, churn dynamics and unit economics?
     
  • Which promotional strategy will create the most value? How can pricing be leveraged to optimize the LTV/CAC (lifetime value to customer acquisition cost) ratio?
     
  • How should pricing execution be managed to maximize realized contribution?
     
  • How can pricing software and AI models be used to improve pricing outcomes?
     
  • What KPIs, models or tools are most effective for tracking the impact of the defined strategy and adjusting along the way? 

Answering these complex pricing questions requires a deep understanding of the customer, market context and competition. We provide turnkey, cutting-edge consumer research capabilities to segment, derive customer trade-offs, understand elasticity and model the impact from proposed products or changes. We collaborate closely with clients to design, field and analyze this research, applying proprietary approaches to convert findings into practical, real-world forecasts. Working alongside our clients, we develop a comprehensive understanding of market trends and the competitive landscape to discern what is possible, shaping pricing strategies that create and capture value. 

Our capabilities

We offer a comprehensive range of pricing services tailored for M&E businesses. Our expertise extends from conducting in-depth strategic studies that redefine a company’s pricing models to detailed assessments of pricing, packaging and valuation. We also provide operational support, which includes developing new price functions and redesigning pricing systems and sales processes.

Client successes 

  • Challenged by stagnant sales and declining profits, a leading entertainment content provider engaged us to launch a new subscription video service. We assessed the viability of a premium subscription network by validating demand forecasts, building out business scenarios, advising on subscription pricing and supporting launch strategy execution. The new service transformed the client’s economics and increased the valuation by several multiples.
     
  • A publishing company with a history of deriving most of its revenues from high-priced, one-off events sought to explore a subscription model. We conducted a thorough analysis involving customer segmentation and sizing potential opportunities. Using detailed customer research and cross-industry benchmarks, we evaluated various business models, leading to the development of a bespoke subscription offering and a comprehensive go-to-market strategy.
     
  • Faced with the renewal of a significant rights package, a prominent sports league turned to us for strategic negotiation support. We conducted comprehensive consumer and advertiser research to accurately determine the content’s value for potential bidders and evaluate the feasibility of a DTC business model. Our valuations and detailed insights played a pivotal role in the negotiations, culminating in the league securing a major new partner for the rights package at a notably higher value than that in previous agreements

Contact us for more information on how we can help develop pricing and packaging strategies to improve your profits. 

Learn about how we can help with your Pricing Strategy needs.