Dick Wolf, tv top producer of Law & Order fame, dishes it out in Variety. His subject: new delivery forms – and how to make money in a world which has gotten rid of the broadcast model of selling 30 seconds of air to advertisers.
I’m not sure if downloads are the worst thing that’s happened to content suppliers or the best thing, but you can do the math. Let’s say five years from now the ‘Desperate Housewives’ of 2010 gets downloaded a million times per episode. (At $1.99 a download), that’s a gross of $44 million per season. On the current two-thirds split, that’s $30 million for ABC for 22 episodes. That doesn’t include profit participants or the studio, of course, so let’s say ($30 million) is cut 50-50 with the studio and everybody else. To the network, that’s a grand total of $15 million — and 22 episodes of a hit like that are worth a lot more than that.
I’m not sure if he’s aware of the fact how utterly misleading this calculation is.
In 2010 PVRs and the networked home will have dented the traditional revenue model of the ad based network tv. But it will be strong enough to pay his bills for the next, uhm, decades. Why?
Changes in usage patterns take their time. It took multichannel cable twenty years to overtake the networks in cumulated prime time viewer numbers. But the media buyers still spend most of their ad dollars on network tv. Because their behavioural changes take even longer.
Even if everybody would switch to IPTV. What would be the difference? The cable guys would be out of business. And the telcos would deliver traditional tv channels into the homes. Because that’s what the consumers know, want – and mostly will get.
But where he really get’s it wrong is the model. If pay per downloads would really substitute broadcasting, one million downloads per show would be fairly meager. At least for the US market. Yes, audience size does matter. That’s why the production cost of a whole run of Desperate Housewifes can be somewhat on the same level as the GNP of a minor league country. If the Housewifes or Law & Order would deliver just those eyeballs, the show wouldn’t be worth a lot more than that but would have been canceled after airing the pilot.
More important: can $1.99 downloads substitute broadcast tv? Only if you’re a Hollywood producer. Or could you imagine every tv household shelling out $200 a month at least just for watching tv content (and that number’s not even based upon the real tv usage hours)? So even in a virtually broadcast-free world, we’ll have to look for ad support. Otherwise, people will have to find themselves some new (and cheap) hobbies pretty soon.
And finally: what content are people paying for? Usually, it’s brand names. Nowadays, it’s celebrity artists. Or physical goods like CDs and DVDs. Or premium channels. In an on demand future, brand name shows like the Housewifes or Law & Order might be in a good position to make some money on the side, too. Depends on your contract with the network. You get a little bit less from the network, and make your money with syndication and overseas rights. Wolf should be used to that.
Via Reinvent TV
Small paper – big site. Poynter points to a South African Newspaper, Grocott’s Mail, which is a running a pretty tight digital operation. OK, it might help, that the local university’s journalism school is now owning and running the paper. But then: shoe string budgets and interns running the whole operation isn’t that rare outside of j-schools, too …
Via Poynter Online – E-Media Tidbits
Some 9 million people will listen to a podcast this year, estimates radio research group Bridge Ratings. “If even half of that content is commercially viable, a very decent business can be built on it,” says Andy Lipset of online-radio advertising firm Ronning Lipset.
Uhum. Half of that? And what’s commercially viable anyway? Podcasts are still in the search of a business model. And without a peer to peer solution, your success will lead to immediate punishment. As your hosting provider will either charge you some bucketfuls of money for the bandwith you’re needing. Or he will cut you off.
But then. Yer good ole radio works well, because spectrum is scarce and even if you broadcast utter nonsense, you’ll never have more than a handful of competitors.
And the ad spending forecasts for podcasts are a bit humbling, too. Research company eMarketer predicts that podcast-ad spending will hit $80 million this year and $300 million by 2010. But that’s not much when compared with the $20 billion spent annually on traditional radio advertising, and some observers say even those estimates may be high.
Via Forbes.com – Who’s Paying For Podcasts?
People don’t listen (to radio) any more. Well, of course that’s not true. But the old Video Killed The Radio Star-melodram hasn’t been in effect, well, during car rides (for some pretty obvious reasons). Seems like, in the last three years, in-car radio has been battling a new enemy. The chatter of people on their mobile phones. Research shows: commuters listened to the radio 6 minutes shorter now than they did three years ago. And they’re spending three more minutes on the phone. So yes, cars are the phone booths of today. The average duration of a call inside a vehicle is 4 minutes and 21 seconds. On the other hand, all other mobile phone calls last 3 minutes and 15 seconds on the average. OK. The real enemy of radio aren’t dashboard MP3 players. But the people themselves. A fact, the music industry knows since quite some time …
Via Mobile Mag – Mobile phones cutting into in-car radio listening
The Golden Copy of the GDrive is as much of a pipedream as the the celestial jukebox of late 90ies fame. People want to have, to own, to keep. That’s why even arcane tools like Download videos from Youtube, Google Video, Metacafe and iFilm are quite popular. That’s why record sales will never completely disappear (download vouchers for DRM-crippled audio files are a decidedly unsexy present). And that’s why – nevermind any privacy issues – the Golden Copy residing on a central server is a tinny concept (a backup is something different, and not what we’re talking here).
Not to forget: ideas like that seem feasible, because storage is becoming bigger and bigger and cheap and cheaper. In about 5 years, a top of the line HD should store about half a PetaByte of Data. Great. And now show me the public network, seemlessly handling just several GB – ubiquosly.
Do not underestimate the power of design. After all, your customers and clients will face the UI of your gadget or service quite more often than you could afford to spend on marketing and branding.
As computing and digital devices move more and more into the consumer space, features and functionalities will increasingly take the back-seat as motivators for technology adoption: as the iPod abundantly shows, user experience (along with a strong brand, and clever marketing) is much more important for the success of a device then technical specifications. Web designers have grasped the importance of good user experience a long time ago; now it is time the big technology providers to understand where the industry is headed.
Via ACM Ubiquity