“The networks have been reluctant to acknowledge the size of their streaming business, partly because online video advertising has become a sticking point in the negotiations with Hollywood writers.” So says the Financial Times, which then interviews media buyers to try to arrive at a dollar figure. This is an important and impartial article which both sides of the writers strike need to consider before going into Tuesday’s talks. It finds after interviewing media buyers that “the four U.S. television networks in a pay dispute with Hollywood television writers over online video advertising are in line to generate $120M of revenues in 2007 from free web streaming of their content.” It says advertisers are flocking to web streaming, and the total online video ad market will be worth close to $1.3 billion this year after doubling in size in 2006, according to the digital media research company Accustream.
“Revenues generated by ABC, CBS, NBC and Fox form a sizeable chunk of this total and are expected to grow sharply next year, partly because of the quality and popularity of the programming they offer. Desperate Housewives, Prison Break and Heroes have all been big web hits. ‘In an expanding universe of content, advertisers cluster around premium inventory,’ said Paul Palumbo, research director with Accustream. Media buyers expect streaming revenues to increase because online video commercials have better recall rates than traditional TV advertising.” Syndication of online video commercials across social networking sites will also fuel future revenues, the article says. Disney, for instance, has streamed 160 million episodes of its TV program such as Lost and Desperate Housewives on ABC.com, according to CEO Bob Iger.
So stick that in your pipe and smoke it about the reality of web revenue.