Wednesday, January 25, 2006

Media, money and my future as a productive member of society

It might at first seem tragic that Diane Mermigas wrote her article about the TV programmers convention immediately before WB and UPN announced their merger, stealing the limelight and thoughtlessly spoiling everyone's free Vegas stay. But in the long run, maybe Mermigas has the more interesting story.

Or not -- it's a tough read. Still when someone speculates that "new paid distribution models [represent] a challenge to the conventional wisdom that advertising sales are fundamental," you have to pay attention. "Forrester Research analyst Josh Bernoff says a popular series like ABC's 'Desperate Housewives' can generate significantly more gross revenue for ABC from a downloading model generating $1.20 per episode per user, compared with the 45 cents per episode per viewer generated by advertising sales. 'Even if 20% of the audience shifts its viewing from broadcast to iTunes (iPod) downloads and ad revenue drop as a result, ABC makes an incremental $1.8 million,' Bernoff says in a recent report."

So that's the secret to getting entertainment executives to embrace change: just make their cut bigger.

And look, there's even a nice, reach-out-and-touch-somebody's-hand conclusion: "the developing media landscape is not so much about us vs. them -- content vs. distribution, or so-called old vs. new media -- as it is about all of the players bringing something to the table and needing each other to thrive. Traditional media companies have an indisputable expertise in content production and solid touch-points with consumers and advertisers, just as new-media players have the high-tech flexibility and savvy to respond to emerging competitive challenges and opportunities."

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