Internet TV Stations and Advertising Revenue


There were some very strong structural reasons why advertising was hard to obtain for Internet TV stations, and that this was allowing the free-to-view space to be inhabited by the main channels and broadcasters, who could subsidise their Internet TV operations with revenue from the traditional broadcast channel.

Is there a solution to these issues? Well, if there isn’t one yet, then one can certainly be constructed. Firstly if the tv player software could pull in advertisements from an external source and integrate them smoothly into the schedule stream, and that external source could be an advertising agency or a buying agency, so that the count of the number of times an advertisement played could be independently verified, then that would be a good start.

Secondly, Internet TV station owners could reposition and reframe themselves away from the TV advertising model. What I mean by this is that just because you want TV advertisements, doesn’t mean you buy into the whole TV advertising model and the way TV advertising is bought and sold ie the advertisement is not the whole model.

There is another advertising model that I see as being more appropriate, the press advertising model. Let us suppose for a moment that you are a manufacturer of sealed unit windows, and you have just made a technical break through that means you can produce windows that are lighter, stronger, retain heat better, reflect sunlight better, and more resistant to breaking.

Your market place is the architects, the structural engineers and specifiers, and the construction companies themselves roughly in that order. What you need to do is create an Advertising campaign that generates awareness initially, and follows that up with technical data, and gets some buildings built or refurbished with your windows.

That Press Advertising campaign is going to be based around advertisements in the “trade” press that each key group architects, structural engineers/specifiers, construction companies and builders etc) read because that is the most cost effective route into that audience.

So, as an advertiser, you are “buying” a discrete targeted group purely on the basis of their profession and their role in the total buying process for your product. And that is also what you are selling as a station owner. And that needs to be your pitch to the advertising agency or media buyer (or both), you want video based advertising (and you are happy to be accountable, and you can provide click-throughs to the advertisers web-site) that is relevant to the audience you have on your Internet TV station.

You have an audience that is valuable to specific advertisers. And ideally your monthly viewing audience is larger than that of the relevant trade or specialist press publication. Clearly the tighter and more homogenous your audience, and the tighter and better targeted your programmes, and the more relevant your proposition is, then the more likely you are to get advertising.

And you need to design this into your Internet TV station from the start if you are to have any chance of getting significant levels of advertising revenue. Essentially, you are competing with the trade press, and you can use their advertising rate card to structure yours. So the media buyers and advertising agency planners you would need to talk to are those dealing with Press and/or buying/planning Press campaigns, rather than TV. The third issue I discussed in the previous article was the typical audience size of an Internet TV station, compared with a programme audience on a typical mainstream broadcast TV station -there’s no comparison, your tens of thousands, maybe hundreds of thousand of viewers per month, against several millions for 1 programme on 1 day!

However, it should be apparent that comparing your audience of several tens of thousands of architects (say) a month against the readership of, say, Construction News, is going to be a much better match, you may even have better figures. There is another possibility I want to raise, which is of a family of Internet TV stations, all broadly targeted at 1 group, in much the same way that traditional press publishing companies have families of journals. Take for example an Internet TV station aimed at Vets, that could be allied with Internet TV stations aimed at dog owners, cat owners, horse owners etc etc.

So while Internet TV may be your communication medium, your business model, I believe, should be closer to that of specialist press publishing. Now, when you go on Joost, Blinx, Babelgum and similar internet video content aggregators, and your content is buried along with thousands of hours of all other sorts of video content aimed at God only knows who, its no surprise that these businesses struggle with advertising revenue, and you aren’t likely to get much.