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Dominique-Sebastien Forest, Raja Khanna, and Barbara Williams were the main panelists of this session with Robert Montgomery as the moderator. Brad Murphy, VP Sales at Revision 3 was also supposed to attend, but he had the flu and didn’t want to travel. To me, that was a sad change, since I was hoping to meet him, but understandable as they slowly reduce their costs for running their business, despite announcing great numbers for their potential income.
Robert Montgomery took a fair bit of time to explain the broadcast business online, and what it meant to video productions, and valuations on investments.
“The web of 2002 was the web of destination… now the model has emerged to be more content focused” – Dominique-Sebastien Forest.
The first question was directed at Dominique, who then talked all about matching users with the content that they want, based on understanding users better through aggregating user behavior across your content.
After that, Barbara from Canwest, talked about the connection that needs to be created between the advertiser, the content and the user. They are still experimenting with various things on the web, seemingly unsure of which way things will go in the future.
Dominique then came back and said that the margins online are higher than traditional television, and so while a television station might need to sell 600 million in advertising to be considered doing well in their business, an online television might only need to bring in 300 million in sales to make the same amount of revenue.
The issue according to Raja is not the CPM rates that shows online get, but instead the number of impressions. If a good video show is doing 30,000 views per episode, and are getting $40 CPM, they are still only earning $120 per episode. It might be a very high margin $120, but it is still only $120.
“I’ve never really monetized new media in any substantial way” – Raja Khanna, Co-CEO of GlassBOX Television Inc.
It is hard to get enough impressions to make real money online through advertising online, and so there needs to be multiple revenue channels from multiple sources. There has to be relationships created where the advertiser feels both comfortable and is still innovative enough to attract attention, all the while bringing in revenue so that the content can still be produced.
“The advertisers aren’t moving as fast as the eighteen year olds, which is understandable.” – Raja Khanna.
Barbara talked about how the need and interest for episodic content like House is still high, and that they need to prove that the value and cost is worth investing in. If the value drops on producing such shows, then there won’t be new episodes of shows like House anymore with a highly professional set-up, advertising and a media backing.
“we have to own the content as it was the only way the business made sense” – Raja Khanna.
The big issue for companies is the fact that brands are being built from pirating of videos, and other branded material outside of the television stations that are spending money to send out such shows to traditional televisions, and so the only way that media companies can continue is to own the star brands that they help build, so that they can’t leave and go to another company.
Barbara Williams said a few things that really bothered me though, and made me wonder if she really understood the shift that was happening in the new media world. She said that people can’t make shows like house in their basement, and that the experience for watching it on your iPod is not nearly as good as watching it on your big screen television, unlike the shift that happened with audio where the average consumer didn’t care about the shift in audio quality.
For me, this seems a little wrong, as great productions like Totally Rad Show, The Guild and more are being created with next to zero dollars spent in overhead costs.
I agree that it is taking some time to move more complex video shows over to the Internet, but I don’t think its impossible, or a long time down the road as a standard model for many media companies like Revision 3.
Originally posted on November 18, 2008 @ 3:01 pm