Future of Commercial TV

August 13th, 2013 at 12:40:29 PM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 54
Posts: 6151
The whole idea of TV stations getting paid by the network for supposedly selling their audience to the network's show's advertisements is absurd and made even more so with electronic ad avoidance devices.

Why are retranmission fees being based on content or ownership?
August 13th, 2013 at 3:59:11 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 835
Posts: 9980
Quote: Fleastiff
The whole idea of TV stations getting paid by the network for supposedly selling their audience to the network's show's advertisements is absurd and made even more so with electronic ad avoidance devices.

Why are retranmission fees being based on content or ownership?


Affiliate fees are the primary revenue stream that funds today’s mainstream television content development. These are basically a “share” of the subscription fee you pay to your cable or satellite operator that is then shared back to the content owner/distributor (typically on a per subscriber basis).

In 2009 DirecTV paid approximately $37/sub out of an Average Revenue Per User of $85 (43%) to content owners for programming costs (i.e. affiliate fees). Comcast, estimates programming costs at 37% of video revenue (Comcast has high-speed data and voice revenue that are separate).

The aggregate fees of all content providers at $32B per year in 2009.

================
A broadcast network is forbidden by law to own and operate broadcast stations that reach more than 39% of the population (up from 33%). In reality ABC owns only 8 stations and reaches only 22% of the nation. CBS corporation is the most invested in broadcast, and the least invested in cable or other media outlets so it owns the most stations. An affiliate relays the signal to the rest of the nation.

I believe that networks used to pay affiliates in the early days of TV to carry their signal. It gave them a bigger audience for advertising. Now that advertising is not as important a revenue source, the affiliate stations pay the network. Sometimes they have limited ability to insert their own commercials, but primarily they make money on news shows.
October 19th, 2013 at 3:40:00 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 835
Posts: 9980
Disney could topple Netflix and Cable

I didn't find this article terribly original, but it does raise the interesting question. Disney is the biggest media company in the world. What if it went independent of cable and offered it's channels for $50/month distributed via the internet. Would it bring cable and Netflix down?

  • ESPN: ESPN2, ESPNU, Monday Night Football, SportsCenter
  • ABC: Modern Family, Dancing with the Stars, Grey's Anatomy, Jimmy Kimmel, ABC Family
  • Disney Channel: Jessie, Austin & Ally, The Mickey Mouse Club, Hannah Montana
  • Marvel/Lucasfilm: Iron Man, The Avengers, Agents of Shield, Thor, X-Men, Fantastic Four, Spider-Man, Star Wars, Indiana Jones*
  • Pixar/Disney Studios: Mickey Mouse, Beauty and the Beast, Lion King, Toy Story, Monsters, Cars, The Incredibles, Finding Nemo

    Right now since most households still have cable TV, ESPN can function because every cable household pays them $6/month. Many people do not have internet connected televisions, and it would jump in price by a factor of at least 4 if you tried to sell it individually.

    Would congressmen move to require football be restored to broadcast TV? Can you pull ABC off the air?
October 19th, 2013 at 4:19:33 PM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 108
Posts: 8265
Quote: Pacomartin


Right now since most households still have cable TV, ESPN can function because every cable household pays them $6/month. Many people do not have internet connected televisions, and it would jump in price by a factor of at least 4 if you tried to sell it individually.

Would congressmen move to require football be restored to broadcast TV? Can you pull ABC off the air?


ESPN would be a mixed bag. For every person who can't live without it there is likely another person tired of paying $7 a month for a channel they barely watch. As to football, I'm not sure if it was made official or not but one way ESPN got to do games was to play them over the air in home markets.

I don't see people paying $24 a month for just Disney content. Price point seems a tad high.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
October 20th, 2013 at 6:35:37 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 835
Posts: 9980
Quote: AZDuffman
ESPN would be a mixed bag. For every person who can't live without it there is likely another person tired of paying $7 a month for a channel they barely watch. As to football, I'm not sure if it was made official or not but one way ESPN got to do games was to play them over the air in home markets.

I don't see people paying $24 a month for just Disney content. Price point seems a tad high.


ESPN and the Disney Channel, generates more profits than the rest of Walt Disney combined. ESPN started in 1979, in 1984 ABC acquired ESPN. Starting in 1993 cable companies were first required to get permission to retransmit OTA broadcast. ABC gave permission to retransmit ABC if each cable company carried ESPN2.
ESPN was bought by Disney in 1996 who considered it a secondary purchase behind ABC, moved Monday Night Football in 2006.

So while each network gets a fee per cable household regardless if anyone watches the channel, noone gets more than ESPN, which generates over $6 per cable household.

So while $24 seems like a lot to pay for either Disney or ESPN, the feeling is that if these channels are all ala carte, then that is what they must charge to maintain revenue.

Ala carte cable pricing may be a boon to commercial broadcast television.
October 20th, 2013 at 11:47:45 AM permalink
TheCesspit
Member since: Oct 24, 2012
Threads: 23
Posts: 1929
I'd pay $7/month for ESPN, if I didn't have to pay other fees to get it.
It is said that your life flashes before your eyes just before you die.... it's called Life
October 20th, 2013 at 11:57:27 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 108
Posts: 8265
Quote: Pacomartin


Ala carte cable pricing may be a boon to commercial broadcast television.


The more and more I think about it the more I think the battle for ala carte pricing is a fight for the last war. Netflix, Hulu, Roku channels, YouTube, an misc online streaming has made a new word "never-wills" among the younget generation that will never subscribe to cable. I know a few people who look at me without it and seriously ask how I do it. Sports packages are going to capture the big fan, the small fan who half-cares may just watch something else. If FNC and MSNBC were to stream that is a few more who will do without.

About 10 months into cable-free I am used to not having 100 channels with nothing on. The Roku box was about the best $80 I spent on entertainment.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
October 20th, 2013 at 8:12:23 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 835
Posts: 9980
Quote: TheCesspit
I'd pay $7/month for ESPN, if I didn't have to pay other fees to get it.


Well that is not much for ESPN, but it won't be that cheap.

The average cost of a 30-second spot in "Sunday Night Football" in the 2012-2013 TV season was $545,142 .

ESPN's "Monday Night Football" information is not readily available, but it is believed to be $300K-$400K per 30-second commercial. In addition, Disney is pulling in $6 month per cable household just to carry ESPN.

But more people would opt against ESPN than for it, if it was al carte. So it is not clear what the price point would be. Most people think that it would be over $20. But then viewership would be much lower, and you couldn't sell the advertising time for as much. That may make the whole concept unworkable, and Disney would have to return to putting MNF on ABC and selling commercials like NBC does with Sunday night football.

The NFL Network (NFLN) is owned and operated by the National Football League (NFL). It was launched November 4, 2003, and beginning with the 2006 season, the channel began to broadcast eight prime time regular season NFL games, currently running under the banner of Thursday Night Football. I think the question is how much will the channel grow after the year 2021 when the latest ABC/NBC/FOX/CBS contract runs out.

Ticket prices published Sep 2012 NFL AVERAGE $78.38

New York Jets* $117.94
New England Patriots** $117.84
New York Giants $111.69
Chicago Bears $110.91
Dallas Cowboys $110.20
Baltimore Ravens 91.92
San Diego Chargers* 80.30
Washington Redskins* 79.13
San Francisco 49ers* 83.54
Indianapolis Colts 85.34
New Orleans Saints* 74.99
Green Bay Packers 78.84
Denver Broncos 82.23
Houston Texans* 78.77
Pittsburgh Steelers* 74.32
Atlanta Falcons 76.78
Minnesota Vikings 75.69
Miami Dolphins* 71.14
Tampa Bay Buccaneers 69.72
Philadelphia Eagles* 69.00
Cincinnati Bengals 69.01
St. Louis Rams 68.89
Arizona Cardinals* 68.00
Seattle Seahawks 67.26
Detroit Lions* 67.60
Tennessee Titans 64.61
Oakland Raiders* 62.23
Kansas City Chiefs 64.92
Carolina Panthers* 63.32
Jacksonville Jaguars 59.54
Buffalo Bills 58.36
Cleveland Browns 54.20

*Prices for team were taken from team Web site and/or media reports, along with past TMR research. Averages were calculated by TMR.
**Unlike
November 29th, 2013 at 12:13:47 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 835
Posts: 9980
TV Is Dying, And Here Are The Stats That Prove It: JIM EDWARDS
"Broadband internet was supposed to benefit from the end of cable TV, but it hasn't. In all, about 5 million people ended their cable and broadband subs between the beginning of 2010 and the end of this year."

Price of 30 second ad on scripted broadcast TV
============ Dramas
ABC
$207,053 Scandal*
$204,658 Grey's Anatomy
$173,062 Once Upon a Time
$151,305 Agents of Shield
$124,050 Castle*
$114,002 Revenge
$107,591 Nashville*
$105,447 Betrayal*
$97,136 Wonderland

CBS
$160,264 NCIS
$136,710 Person of Interest*
$133,185 Hostages*
$127,700 Elementary*
$121,699 NCIS/LA
$119,052 Criminal Minds
$113,628 CSI
$74,330 The Mentalist*
$70,446 The Good Wife
$61,160 Hawaii Five-O
$59,863 Blue Bloods

NBC
$201,650 The Blacklist
$130,963 Chicago Fire
$89,278 Parenthood
$87,188 Revolution
$84,760 Grimm
$73,477 Law & Order:SVU
$59,705 Dracula

FOX
$171,757 Glee
$159,932 Bones
$137,610 Sleepy Hollow

=================== Comedies
CBS
$316,912 Big Bang Theory
$183,904 Two and a Half Men
$175,506 2 Broke Girls
$174,442 The Millers
$167.569 The Crazy Ones
$165,999 HIMYM
$139,070 Mom
$137,121 We Are Men (Cancel)

NBC
$95,663 Michael J. Fox Show
$80,939 Sean Saves the World
$78,146 Parks and Recreation
$62,358 Welcome to the Family (Cancel)

ABC
$281,951 Modern Family
$127,848 Super Fun Night
$120,983 The Middle
$108,180 The Goldbergs
$94,213 Back in the Game (Cancel)
$80,634 Trophy Wife
$75,124 Last Man Standing
$69,937 The Neighbors

Fox
$236,857 New Girl
$148,188 Dads
$146,697 Brooklyn 99
$117,987 The Mindy Project
November 29th, 2013 at 12:50:07 AM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 54
Posts: 6151
Quote: AZDuffman
About 10 months into cable-free I am used to not having 100 channels with nothing on. The Roku box was about the best $80 I spent on entertainment.

That is it...
Hundreds of channels "with nothing on"...
There are times when narrow casting does not work.
A channel for left handed golfers can exist and even be separately priced... but darn few subscribe and few would renew.
A bar might take a sports channel or even a sex channel,,,,,, but after awhile even the playboy channel gets tiresome.
Sure there are cartoons and wrestling nonsense fairly similar to animated cartoon characters but there is not much of a market for such nonsense.
Yeah, there are movie channels... but you see any good movies in the last five years?