Commentary

Charge For Every Media Company: Into The Video Pool!

Every media company seems to want video on its digital platforms. That’s where the big advertising money is. But to no one's surprise, it can be really, really hard to do well.

Think about Spotify, which is planning to restart its video strategy for the third time in as many years. Long-time TV producers might just plain snicker: Three strikes and you’re out.

A report in Bloomberg says the world’s largest online music service is searching for ways to make money that don't involve recorded music and costly royalties.  

Sure -- who wants to spend money?

Think about the TV video production costs when it comes to development of that content. Traditional TV networks and media companies must be just rolling their eyes: “No kidding; it ain’t easy.”

Great talent and marketing support are only two pieces of the puzzle. More than that, you need a big coffer of programming dollars.

Netflix knew this when it studied how traditional media companies developed successful movie and TV content. Netflix will look to spend $8 billion next year, up from around $6 billion this year. Big monetary resources provide the leeway to take big swings.

For comparison, MoffettNathanson Research says Walt Disney is estimated to spend $5.7 billion on TV production this year, with Fox at $5.5 billion and Time Warner at $5 billion. NBCUniversal leads all companies with $8.6 billion. Adding theatrical movie production budgets significantly ups these totals.

Increasingly, ad budgets in digital media have seen big spikes in video as well as social media. Consider that among big social media players -- Facebook, Twitter and Snapchat -- all are heavily involved in co-producing content with big TV-based companies, including NBC, Discovery, Viacom and the NFL.

It isn’t only top-flight storytelling to consider, but the co-marketing efforts of long-time TV-video companies that learned to attract TV viewers.

Restart with that.

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