Monday, September 20, 2010

Perceived Platform Value (PPV)

Later this week I'm off to speak at the CTAM Summit in Hungary - a rare venture overseas for me these days.

The subject is TV Everywhere as a model for cablecos.

It has resulted in my doing something despicable. Yes, I admit it, I've invented a new TLA.

PPV stands for 'Perceived Platform Value'. I hope it's reasonably self-evident, but have a look at prices for iTunes apps and compare these to what you're asked to pay for, say, Sky Sports.

Most apps are under £2, yet Sky Sports want £19.99 a channel from you (presumably so as not to cannibalise their existing cash cow platforms).

Perhaps the marketplace is missing a trick. Remember those Orbis partworks and DeAgostini stickers you used to collect as a kid. They were well honed business models based on a low upfront, followed by regular recurring revenue models that revolutionised a part of the publishing industry.

Ironically, of course, DeAgostini is now one of Europe's content powerhouses, having acquired Marathon, Zodiak and RDF amongst other companies.

But the other element of this is that the diminishing law of returns that has applied to other industries is now beginning to impact on TV - consumers just aren't willing, in most contexts, to pay what they once did - and their price sensitivity seems to me to be very platform dependent.

I look forward to debating this further with those of you who intend to go to Budapest this week.