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Granier on Digital Media Strategy

New Media Strategy


How to Make Money With Digital MediaOctober 6

Hulu - 24

The first question that comes out of any Media Executive when I mention New Media is “How will we make money?” To which I always answer “How will you make money without new media?”

However, they make a valid point: this is a business and if we can’t make money at it then we should be doing something else. So let’s try and figure out what it takes to make money online with your content.

Old Media Revenues

Let’s begin by looking at the costs of making television content and its associated advertising revenue. I’ll be using Fox Network’s “24″ as an example.

  • Producing one episode of “24″ costs around US$4,000,000.
  • Each 30 second advertising spot during “24″ sells for around US$364,000.
  • Each episode of “24″ is seen by around 10 million viewers.

If Fox sells 100% of the advertising slots on “24″, they make 364,000 x 2 x 16 = US$11,648,000. The cost to each advertiser is US$364,000 / 10,000,000 viewers x 1,000 = $36.4 CPM (cost per one-thousand viewers). If FOX wants to supplant their television network with pure online distribution, then they need to find 32 advertisers, each willing to pay $36.4 CPM, and -more importantly- ten million viewers willing to seat through 32 advertisers while watching their shows online. Good luck with that, but it’s not happening.

Old Media

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