Networks fill screens with reality shows and encourage their audience to engage with user generated content to keep costs low, but what is sustainable support from Advertising?
It is not a secret that many media companies have been struggling with falling ad revenues as advertisers cut back and ask for more bang for their buck. But how does their online strategy affect their advertising revenues and how serious do these companies take this future revenue model?
It is not known how much extra revenue is made from running sponsor sections and onsite advertisements but it is likely not enough to halt the revenue lost to reduced broadcast revenue. A report today outline that Ten showed a 15% decline in third quarter revenues which goes against the growth of its online audience this quarter. This online growth was supported by quality content and user generated material built around a few key shows such as SYTYCD, which is still generating interest online.
So the interesting point is that until online makes up a larger portion of overall revenue for a majority of the networks, they will remain dependant on broadcast revenue which is likely to continue to fall. As the networks fill screens with reality shows and encourage their audience to engage with the show through user generated content they can keep costs low. Networks need a sustainable Ad platform to not just support costs but contribute revenue and allow them to re-invest this to expand online projects.
With TV losing audience numbers and potential revenue to iTunes Store, Hulu and Bittorrent how are they faring against their competitors?
We have looked into their competitors with the leader in the online space ABC Networks, with a massive lead with a larger share than all their competitors combined. This government sponsored network places it in a very similar monopolistic position similar to BBC in the UK and has the advantage of being able to allocate significant online resources without requirements for ROI.
Unique Visitor Statistics
Unique Visitors Stats for Year up by 62% with 12 month ASX Share price down by 21%
Unique Visitors Stats for Year up by 91% with 12 month ASX Share price down by 26%
Ninemsn.com.au (428,000/month) – Unique Visitors Stats for Year up by 28%
Abc.net.au (908,000/month) – Unique Visitors Stats for Year up by 0.2%
Sbs.com.au (29,000/month) – Unique Visitors Stats for Year up by 31%
Competitor Site Reviews
Even with its extensive reach of Yahoo, the Seven network continues to struggle for online market share, lagging behind the smaller niche network of SBS. Yahoo is following the NineMSN revenue model of branded sites for sponsors but they ensure they don’t over kill the ads and use the site to promote their TV shows. SBC follows a similar model with limited onsite advertising but appears to have a much more successful layout and design for a media portal.
The ABC website is the direction that the Network 10 seem to be taking their website, with minimal relevant promotion and the ability to watch full TV shows for free. The only difference is the use of screen real estate with ABC making it easier to find its Podcasts for Triple J and Network 10 hiding them below the fold.
The interesting point that the millions that have been spent on building NineMSN into a online powerhouse has paid off in unique visitor figures, but they have taken the advertising model to the extreme. Its recent Transformers promotion takes over the whole frontpage with a mini animation that ends with a large promotional screen advising that Transformers is now in cinemas. This seems to be more annoying and a little too pushy to be an ongoing promotion, while this may work for one-off deals because of the intrusive nature it is likely just to irritate users.
I think the biggest point to take forward to media companies is to look towards the industry leaders such as BBC and even ABC who make it easy to download, listen and share their content. There is no point fighting the battle against iTunes, Hulu & Bittorrent but I feel online advertising can contribute towards overall revenue but needs to be done right and not follow NineMSN.