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TV Companies Make $120 Million Online in 2007

While Hollywood writers continue to strike over royalties for digital work, the four major U.S. television networks will generate around $120 million from free Web streams of their content. That's according to Tracey Scehppach, senior vice president of leading media-buying agency Starcom, which claims that advertisers are flocking to reproductions of shows like "Desperate Housewives" and "Heroes" on the Web. The $120 million figure is an estimate based on what Starcom has been paying for spots across the four networks.

One of the contentions the networks make in their continued standoff with writers is that they're not making any money from online reproductions of their content. Well, $120 million might not represent a profit, but it's clearly a decent start, especially when you consider that streaming ad revenues were almost non-existent last year.

Accustream, a digital media research company, expects the networks' share of online video revenues to grow substantially next year. A good portion of the $1.3 billion the industry will make this year already comes from ABC, CBS, NBC and Fox, Accustream says--a sector that doubled in size in 2006. Meanwhile, Starcom's Scheppach says that advertisers like streaming video because the ads have better recall rates than traditional TV. "You get 85%recall [with streaming video] versus single-digit recall for TV," she said.



Read the whole story at Financial Times »

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