Broadcasting & Cable on the New Deal
Broadcasting & Cable has a good article by Ben Grossman that notes some hard facts about online video, e.g.
NBC U, for example, says that it will only generate about $10 million from iTunes sales in 2006—or the rough equivalent of ad revenues for one typical Thursday night on NBC. And Apple says it has sold more than 3 million video downloads, so only about $6 million in revenues have come in altogether, with the majority of that number reportedly generated by music videos and not TV shows.
Grossman goes on to note that networks are trying to respond to the realities by changing their internal operations. In particular, the shift from dealing with a few customers to millions will present a tremendous challenge.
“We are now investing in new media and beginning to affect the DNA structure of our organization,” says Huntsberry. “How do I license content to hundreds of on-demand customers around the globe who want to do business with me? I can walk away from them and only deal with the top 10 big ones, or change my processes whereby I can do business with the bulk of them, collect my money faster and be able to go into business with more people.”
As an individual who has attempted to purchase footage from various networks, I can say the networks don’t have this figured out. Leaving it to Apple, Microsoft, Yahoo, and Google to figure out may make sense in the short run, but longer term, this will be one of the biggest changes the networks make in the next ten years, not excepting the move to HDTV. (And if you’re a network exec working on this problem, drop me a line).
Technorati Tags: iTunes Video, video