Written by Kurt Scherf, Vice President and Principal Analyst, Parks Associates
John Penney, Starz, did a great job laying out the challenges in moving from a well-understood broadband and cable TV advertising revenue model to an online video model, where many fewer ads are run, CPMs might be higher than TV ($55 vs. $30), but the overall revenue rate to support the production of a TV show is far below where Hollywood needs to be.
My question (and I know that this is very much oversimplified): We know that if we were to aggregate ALL of the consumption (live, DVR, VoD, online, mobile, etc.), your audience count for any one particular program is going to be significant. I know that audience size isn't the only metric - Nick Troiano with BlackArrow reminded the audience yesterday that the context of the ad matters as well (is the individual viewing it on a mobile device, where is this content being viewed, etc.), but having a consistent audience measure across all platforms seems to be a necessary first step. Then, we need to figure out how to use resources such as metadata and known demographics and psychographics of the viewer to be able to send relevant, targeted advertising their way. Great comment by Richard Bullwinkle at Rovi yesterday afternoon about how a Coca-Cola ad for the kids might not appeal as much to Mom or Dad, who would prefer specific messaging about Diet Coke. So, industry, how are we going to make this happen?
