The economics of TV downloads
PaidContent.org has skillfully extrapolated some info out of this Hollywood Reporter article regarding the economics of TV downloads:
According to JPMorgan Chase analyst Spencer Wang, one-episode of a hit show on network TV would generate about $12 million in gross ad revenue (assuming 17 million viewers). By comparison, even in the worst-case scenario — with 20% of TV viewers opting for downloads, 100% of which overlap with existing programs — downloaded episodes of such popular series can generate an estimated $15 million in revenue. The main reason is that the $1.44 in download revenue per user (or 70% of the $1.99 per download) is greater than the estimated 57 cents in advertising revenue per user generated under the current model. The content owners take from downloading is nearly the same that a commercial-fee TV series episode generates from a DVD boxed set.
This was news to me. I always sort of assumed that Apple would be nickel-and-diming them for the lion’s share, and the content creators would just be happy with an alternate stream of revenue.