Saturday, January 04, 2014

What Is A Broadcaster ?

Once upon a time, broadcasting was a simple business. You made or procured content, you sold some ads and you made profits (hopefully). So lucrative was it that it was described in the UK as a 'licence to print money' and in the US no less company than GE, at the time the largest company in the world, became an owner of a broadcaster.

Today, arguably, you can open a YouTube account and become a global broadcaster in seconds.

So, what is the morphology of this industry as we move from a highly regulated, geographically controlled entity to a total free for all ?

Well, the answer probably lies in a conversation I once had with a production company, who claimed that they existed to 'tell great stories'. I pointed out that they existed to deliver audiences who would pay the broadcasters they sold programmes to. Not as snappy, eh ?

The reality is that the very definition of a media company is one that can deliver an audience. The more engaged, the more valuable the audience, the more valuable the media company. There are many companies in this sector who make a fortune from a very small, but hugely valuable audience.

And, as a media company, there are only two ways of monetising this audience. You get them to pay, or you get someone else to pay. The latter is called advertising, or sometimes, sponsorship.

Unfortunately, the guys with the money are increasingly trying to build and retain their own audiences. Not surprising since millions of people buy their brands already.

So, broadcaster have become brand aggregators.

This is a perilous place to be. You own the audience, but not what that audience wants.

So, instead you become a moderator. You figure out what your audience wants either through intuition or through research and then deliver this.

So, to answer the question, a broadcaster is someone who can aggregate and build audiences and then monetize them.

Unfortunately, the old 'broadcast model' is broken, so now you have to mix in PPV, subscription, syndication, programme sales, eCommerce, advertising, sponsorship and many other components of the new broadcast model.

One thing is for sure, YouTube is not the answer, even if it is a component in building a broadcaster of the future.