Saturday, December 5, 2009

How TV Broadcasters can earn Revenue - Content, Ads, T-Commerce

The key ways to earn revenue in a TV broadcasting system include selling access to content, earn advertising revenue, or generate revenue from direct sales.
Selling Content - Two ways to earn from content; subscription fees and pay per view fees. In general, the cost of content to networks has been going up. What is more challenging for TV broadcasters is that viewers can get content through many new media channels reducing the value of your TV networks. To successfully compete with content, TV broadcasters must get more valuable content (such as niche programs) or some viewers will shift to other media channels such as Internet TV.
Advertising Revenue - Each year advertising spending increases with gross national product (GNP) resulting in more money for advertising. Unfortunately for TV broadcasters, advertisers are shifting their ad spend to the Internet. Today, approximately 1/3rd the amount of money used for TV advertising ($47B per year in the United States) is now being used for Internet Marketing ($17B per year). Since 2005, the growth in TV advertising spending has been approximately 0 while the growth in Internet advertising spending has been over 10% per year!
Television Commerce - T-Commerce has higher revenue potential than content and advertising combined and it is coming. Some TV systems are able to let customers purchase products by using their TV remote (such as the home shopping network – HSN).

1 comment:

  1. Lawrence, interesting area to discuss. I have had some traction leveraging VOD and joint promotions of local broadcaster programming on Cable; News, Topical and Special Events. For the most part, cable operators do not produce or own content and broadcasters need room to innovate. Should be fertile ground for innovation and partnership. There should be similar opportunities with local newspaper publishers as well and radio. The question is how do you get folks to open their minds and start working together. I have spent over 20 years in Cable product and content development.