Looking For Future TV Revenue Generators -- But Not In Typical Places

If you were to ask broadcast executives where the big new stream of revenue will come from in the coming years, you might guess wrong.  

Digital ad revenue? Subscription fees from new online services? Video on demand? One senior broadcast TV executive told me plainly: "It is retransmission fees, pure and simple."

Broadcast executives might parrot NBC Universal's Jeff Zucker's comments: that they don't want to exchange traditional TV dollars for "digital pennies."  What they want is an already established second stream of TV revenue that has been around for decades: the monthly subscription fees paid by cable operators to networks.

The key word here is "network." To many these days there are fewer differences between cable and broadcast networks, which are starting to look more alike.

Every financial reporting period gets tougher and tougher for those media companies with big broadcast networks. And those cable subscription dollars, which can account for 50% of a cable network's overall revenue haul,
take on more importance as a financial goal for traditional broadcasters.  Broadcast networks believe that with some of what cable networks get -- $1 a subscriber/month, or even 50 cents -- they would be on easy street. It could give them hundreds of millions of dollars right for their bottom line in one fell swoop.

Cable networks are hopeful to gain their own advantage -- especially with the coming addressable advertising via cable set-top boxes. But that trend that has its dangers. A recent study by Nielsen Media Research that converted its data derived from set-top boxes offered up some startling results.

Viewership data from set top boxes would increase Fox's viewership by 4%, with the top-rated broadcast show, "American Idol" gaining an amazing 12% in viewership data. ABC's "Desperate Housewives" would have 12% higher ratings in digital cable homes. (The show would also decline 6.5% in satellite homes.)

Cable network execs must be wondering how this can be. To be fair, such a digital switch would have benefits for cable, too,  giving it $3 billion more in advertising dollars. Broadcast networks would lose around $1 billion.

All this means, is that it's not a straight-line graph for every network. Nielsen notes shifts in advertising market shares may not directly follow shifts in TV audience share.

Broadcast and cable networks are angling for the next round of revenue-generators, because they know the current advertising/subscription models won't last. But what's to come next is not all obvious.



1 comment about "Looking For Future TV Revenue Generators -- But Not In Typical Places".
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  1. Jim Clouse from, August 7, 2009 at 4:11 p.m.

    WRONG! The largest future revenue generator by far for any media company is effectively mining their website traffic. Only ClikitySplit empowers advertisers with patent-pending dynamic marketing capabilities while simultaneously enriching the end user experience with unique sorting features and the ability to change categories with just a mouseover and click and you have. Dynamic marketing is the future. Only ClikitySplit can do it.

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