Payoff Over a Web Singing Sensation Is Elusive

To recap:

  1. No broadcaster has figured out how to make money off their content via the Web, particulary on a pay-per-stream model.
  2. Despite this, we are still calculating lost revenue on a per-stream basis.
  3. Most networks have decided that because they can’t make money off streams, no one is allowed to see them.
  4. ITV has decided that Web content is valuable as a promotional tool for the TV show, where they do make money on advertising.

Yes, making money on a per-stream basis is elusive, but not the value of eyeballs seeing your content.  This sounds more like a problem of classification: perhaps TV networks should treat the Web content as a marketing expense rather than the product itself.

Sound crazy?  Remember that Transformers cartoons and comic books were designed in part to sell action figures, and soap operas were originally sponsored and produced by soap manufacturers as a vehicle for product placement.

How much money have the parties lost? In the days after Ms. Boyle’s debut, The Times of London published what it called a “crude estimate” suggesting that the parties involved had left $1.87 million on the table.

That is based on 75 million streams of the various clips of Ms. Boyle, which the newspaper estimated could get $20 to $35 for every 1,000 views in the United States, and more than that in Britain.

While other TV networks act quickly to remove videos when users upload them without copyright permissions, ITV has “nonexistent piracy enforcement on YouTube,” said David Burch, a marketing manager at TubeMogul, an online measurement firm.

The broadcaster and producers allowed the copies to stay online because they created buzz for the program. The clips have received more than a half-million user comments.

“On TV, watching the content is the end of the experience. Online, watching the content is the beginning of the experience,” Mr. Cutler said.

The history of viral videos has shown that when new clips about a subject become available — in Ms. Boyle’s case, her new performance on Sunday — it “actually boosts the viewership of the existing assets,” Mr. Cutler said.

UPDATE (June 2009): I realize only after posting this that suggesting we treat Web content as promotional material places me squarely in the camp of studio executives against whom the Writers Guild went on strike in 2007-2008.  Not sure how to resolve this.  Hold please.

Source: The New York Times