Monday, September 20, 2010

Unlocking the economic value of TV Reruns
















Broadcast TV shows once commanded a hefty premium for reselling their content on cable networks. With more and more cable networks producing their own original content, broadcast TV can turn to the Internet to monetize their content. After all, broadcast TV has already spent a significant sum to produce original content.


Can broadcast TV unlock the value of old TV shows on the Web?


If yes, should they redistribute this content by building their own online distribution platform or partner with existing online networks (e.g. Hulu)?


7 comments:

  1. Jason Munshower (SF11)September 20, 2010 at 6:14 PM

    Broadcast networks can and should unlock value of old content on the web. In addition, they SHOULD partner with third parties like Hulu.

    Opening the old shows to the web is a great mechanism to expose a new generation to a set of programs they would have never watched. (Evidence my kids love of Flipper!) That content was sitting in a vault some where making no money and now (even at Hulu prices) they can monetize it.

    Hulu and other partners are the place to put it as it focuses the networks on their core competency of making shows rather than building IT infrastructure to host old content.

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  2. Totally agree with what Jason mentioned.

    Old content is something that hodls on to the value in it and should be monetized in some ways. Of course, each content may not be so popular as the recent programs, but there are "some" (or meaningful number of) people who want to watch the old ones all the time.

    Given the fact that the contents are already there and there is a minimal additional cost in linking it and service it due to the charactersitics of digital content, why not monetizing it? It exactly fits to the category of long tail economy in digital era.

    Also, in terms of how monetizing it, having a strategic alliance with the existing provider such as Hulu will definitely help. By doing so, they can save time and cost in physically building its own service infrastructure and inevitable marketing cost, which has been done by the existing player already. Saving cost and time will be very cruicial in this case.

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  3. I also agree that Broadcast TV can unlock value out of old shows on the internet. Currently, I have noticed that a few of the major broadcast networks, such as CBS, have been uploading entire seasons of shows that were popular many years ago. Just like current shows, they are free to view since viewers are forced to sit through advertising multiple times during the program.

    However, under this method, many internet users are not aware of all the shows available from all the different broadcast networks. Even if you were, you would have to jump around across multiple sites thus removing the power of aggregating user behavior and viewing preferences for marketing purposes. From the consumer's viewpoint, features like playlists and favorites would be too fragmented and not aggregated in one place.

    Using a well-known service, such as Hulu, will increase awareness of available TV shows. Consumers are more inclined to get their products from one central place. For example, years ago people would go to the video store with movies available from all the major studios. It would have been ineffecient to go to each studios store individually.

    A partnership arrangement with the likes of Hulu will leverage the synergies and marketing efforts of paying to view content online.

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  4. Also agree with the above comments. Another reason to go with Hulu rather than trying to roll your own infrastructure is to take advantage of it's existing network. Three of the four major TV networks (all except CBS) are already joint partners in Hulu and allow their content to be posted there. And as a user of Hulu, the service increases in value as more shows become available to me. If a new show was offered on a different network, what incentive would I have to switch just to get that one new show? But if it was offered to me on a network I already use, I could easily discover it and fall in love with it!

    Ultimately, I think premium TV content will be available to users long after its current expiration date (e.g the broadcast run of the show plus a few years of syndication). Just as readers today benefit from still being able to read Shakespeare, video viewers a 100 years from now will equally benefit from being able to watch episodes of Friends ;)

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  5. From the advertiser's point of view, I would argue that internet distribution is a more effective way to advertise. As someone who recently canceled an expensive cable package and went to the laptop-tv mode, I would say that I am watching more advertisements and am more impacted by the ads I do see. That is, with cable I generally skipped all ads because I could just use the DVR to zoom through them. Now that I only have to watch one or two ads with a program, I just sit and watch them. I also suspect that the ads are somewhat targeted based on my hulu account data.

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  6. Yes, I totally agree that they should redistribute this content by building their own online distribution platform or partner with existing online networks for the following reasons. First, when old contents were stocked on their company, they have no any economic value but they can be revaluated by being redistributed online in terms of company’s brand reinforcement, new business model opportunity and foreign market expansion.
    Second, they have to find partner with strong online network since they don’t have enough contents to make a success on their new business model such as online advertisement. In the longtail economy, broad selection can be a key success factor.
    Last, online distribution can capture the customer who cannot get their contents because of many different types of limitations. It is very important to expand their channel on order to add value.

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  7. I also agree that old TV content should be redistribute through partners such as Hulu. There is still a large demand for watching older shows (Seinfeld, Friends, and M.A.S.H. are examples of shows that continually have viewers even though they are no longer in syndication). By partnering with Hulu, the appeal and reach can be greater, since Hulu has been a huge share of its market. Younger viewers can also be exposed to shows that they haven't ever watched before.

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