Tuesday, November 13, 2007

Enough To Go Around ?

One of the hidden realities of the internet TV age is that there are only a limited number of hours in the day. So, the challenge is to maximise the revenues per eyeball per hour.

Traditional TV did this through brokering its ability to deliver very large audiences; that ability is fast becoming fragmented and new metrics will need to be introduced to the traditional TV market which are likely to lead to sharp falls in the revenues per viewer.

The company in a strong position here is, inevitably, Goggle, who can use their 'long tail' model to accurately deliver audiences and therefore charge a premium for them. There is no lack of other companies playing in this space. They include Eyeblaster, Adotube, Liverail, Tremor, Podaddies, Yumenetworks and Brightroll. As well, of course, as the traditional internet ad players who have been snapped up by the majors: DoubleClick, 24/7 and Atlas.

The other alternative is to charge the viewer. The problem here is that there is a natural resistance for paying for anything over the internet and companies such as Tiscali and BT have struggled with the model

This leaves operators looking for alternative sources of income. This has been well exploited on traditional TV, from ecommerce to competitions, and is, from my experience, likely to work very well on internet TV where people are more familiar with interacting and purchasing.

Even though I still expect over 80% of all internet delivered video to be paid for by advertising moving forward, additional sources of revenue, especially ecommerce, should not be ignored in any business model.

Only by combining various revenue streams will the pot at the end of the internet TV rainbow begin to glow.

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