Subscrptions more than advertising revenue

The latest Ofcom report for 2008 amongst other things shows that TV revenues for subscriptions is more than 50% or revenues for the industry. Given that before Satellite and Cable (not that long ago) all the revenue would have been advertising this is a significant fact.

The UK TV consumer is now use to paying for TV in a way that German consumers (amongst others) are not.

So what are the FTA channels in the UK doing about taping into this growing market?
Well they seem to be focusing on online – sure they’ve got to be there, but the market business models and technology are all on the more still, making far more uncertain and risky than subscription TV.

Park that thought for a minute. Now look at the content lifecycle. People often think that this starts (in TV) at broadcast where the content has a premium value to attract eyeballs, that the broadcaster then sells the access to the advertiser. Repeats generally attracting lower audience over time = the long tail. But an episode of Coronation Street is in the “can” a day or two early + we know that people want to see things first (hence DVD pirates – not the only reason but a part). Therefore show the 7:30 Thursday edition on a Pay-Per-View bases on Sky/Virgin and BT Vision for £3 get 1m viewers and your £3m richer then you would otherwise have been (I now its not that simple but the principal is there). Create enough content that has a pre-Broadcast value and you’ve got a subscription channel.

OK so it maybe the elite with disposable income and the majority may wait 24 or 48 (or whatever) to see if for “free” but then you’ve segmented the audience and now can provide targeted advertising on your subscription channel. Sure they’ve paid a subscription so may object to adverts interrupt the programme but pre roll and post roll ads?

Cut the ads and you’ve got several more minutes to fill! What about a directors version an extra seen or two that wont be in the broadcast version? Now it’s not just a subscription to see it early but to see something the others never will.