Wednesday, June 6, 2012

Ad Revenues and Content Creators

Earlier this week, Ashkan Karbasfrooshan posted some thoughts about online ad revenues as a primary funding source on the Online Video Insider blog.  Rather than following the basic talking points - that online revenues remain low compared to ad revenues for traditional media, or that online audiences are too small and/or too poorly measured to generate sufficient ad revenues, he starts with a different question. Which, of the wide variety of online advertising platforms available, creates the most value for the advertiser?
  Advertisers want access to audiences, and Karbasfrooshan argues that content aggregators (like YouTube) and content redistributors (like Netflix) are much better at getting audiences and controlling advertiser relationships, than content creators.  With the limited online ad revenues available, he suggests, there aren't sufficient ad revenues left for content creators for them to be able to survive on online advertising revenues alone.  And among content creators, traditional media content creators have an advantage over new-media creators in that they have offline revenue streams they can rely on to support and supplement online ad revenues.  Thus, he concludes, "(w)hile advertising is always going to be biggest possible revenue source, ultimately supporting the ecosystem. creators need to look at other sources of revenue."
  This reflects an emerging consensus in the converged, competitive, media business world - that it will be increasingly difficult for firms to survive on single revenue streams, or on traditional business models, alone.  Firms will need to continually explore potential alternative or newly emerging revenue sources, and be ready to exploit those they can.

  As for (online video) content creators, the post suggests a number of potential markets and revenue sources to consider -

  1. Portals - "With portals fighting for mindshare and time spent on their site, they’re always looking for more video content."
  2. TV companies - Similarly, as they increase their online efforts, they will be looking for additional content to supplement their premium content.
  3. Print companies - They're finding their traditional content too static for broadband Internet, and will find that simply equipping reporters with cameras doesn't provide the quality to remain competitive.  They'll end up making deals with focussed online video content creators to produce or license content.
  4. Other new-media producers - Those who try direct online distribution are also likely to find that they need additional or supplemental content, and in many cases it makes more sense to license it than produce it.
  5. Ad networks - "(D)isplay ad networks are always looking for video content as a hedge from both the emerging video ad networks and the shift of display to video advertising."
  6. Ad agencies - "With content and marketing blurring rapidly, even the largest of ad agencies are looking for content creation and catalogs to offer more to their clients."
  7. Online publishers - They have the audiences, brands, and textual content - but often lack video content and the expertise to produce it.  
  8. Consumer product companies - They're looking to extend their brands into content, and again, generally lack the skills and resources to do it themselves.
  9. Stock video and image companies - Another avenue for marketing content for licensing.
  10. Academic publishers and educational providers - "Academic publishers and educational providers are looking at adding video to their tools and resources, as video and remote learning become commonplace."
  While content creators might not find all of these useful, these are certainly options to consider.  At a minimum, online video content creators should be looking at their products and asking themselves which of these markets might be interested in licensing some or all of their existing content.  While the initial licensing revenues might be small, they add revenue at very little added cost.  Also, if the firm has particular expertise or access that provides them with a competitive advantage in producing particular types of content, and excess production capacity, then making deals to produce content for other outlets can provide additional revenues.
  Online video content creators may even find that, with time, these supplemental revenue streams may even become their dominant source of revenues, as several traditional media have discovered.

Source -  Ad Revenue Holy Grail for Content Creators - But Not Everybody's Gonna Collect,  Online Video Insider

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