Realscreen Summit 2016: A Takeaway – The Financial Model The Channels Are Leaving Behind

There was much talk at this year’s excellent Realscreen Summit about how networks must rebuild their brands to succeed in the emerging pay-for-content model of the online video ecosystem.

The evolution from cable channel to video brand is so complex and risky that whole server farms are dedicated to storing its analysis.

My focus in this post is on what’s at stake:

  • The leading U.S. cable channels that schedule docs and unscripted content enjoy huge footprints, as you can read below.
  • They earn a sizeable revenue stream for their services.
  • And because of the long-term nature of typical cable / satellite affiliate contracts, those earnings aren’t going to drop off a cliff.
  • Although weaker channels and brands are finding that cable operators are more willing to cut them loose.
  • Plus: The channels enjoy a dual revenue stream. Advertising sales add to the bounty.

There is a danger that channel execs will focus on brand-building via costly celebrity-led and even celebrity-directed documentary content at the expense of profitable, day-to-day unscripted programming.

  • It can’t be all about the tent poles.
  • Someone’s got to focus on the tent!

tent

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Subscribers

Following is a table from Nielsen that captures the subscriber base of a selection of U.S. channels.

  • The Monthly Sub Fee is an estimate from SNL Kagan for 2013.
  • You can do the math on the annual revenues.
  • I included ESPN as the Sub Fee leader, as well as the sub base of HBO and Showtime.
  • BTW, there are 116.4 Mn U.S. homes, and 99.6 Mn multichannel homes, down from 104.1 Mn year-to-year.

U.S. Networks Selection
Distrbution Jan ’15 vs Jan ’16
Esimated Monthly Sub Fees

Monthly
Jan ’15 Jan ’16 (000) % Sub Fee
OVATION 53,468 46,071 -7,397 -13.8%
WEATHER 97,328 88,084 -9,244 -9.5% $       0.13
SCIENCE 75,601 72,191 -3,410 -4.5% $       0.07
AM. HEROES 60,014 57,803 -2,211 -3.7% $       0.07
ESPN 94,530 91,405 -3,125 -3.3% $       5.54
TRAVEL 91,540 88,621 -2,919 -3.2% $       0.13
MTV 93,257 90,607 -2,650 -2.8% $       0.44
ANIMAL PLANET 94,280 91,603 -2,677 -2.8% $       0.11
SPIKE 93,491 90,907 -2,584 -2.8% $       0.32
OWN 81,600 79,375 -2,225 -2.7% $       0.18
MSNBC 94,645 92,076 -2,569 -2.7% $       0.23
BRAVO 92,310 89,824 -2,486 -2.7% $       0.24
TLC 95,110 92,549 -2,561 -2.7% $       0.20
VH1 92,669 90,200 -2,469 -2.7% $       0.21
CNBC 93,660 91,181 -2,479 -2.6% $       0.34
A&E 96,049 93,641 -2,408 -2.5% $       0.29
HGTV 95,697 93,429 -2,268 -2.4% $       0.16
FYI 70,731 69,058 -1,673 -2.4% $       0.11
FOX NEWS 94,708 92,487 -2,221 -2.3% $       0.94
BET 88,131 86,126 -2,005 -2.3% $       0.21
LIFETIME 95,998 93,842 -2,156 -2.2% $       0.32
CNN 96,309 94,147 -2,162 -2.2% $       0.59
DISCOVERY 96,596 94,456 -2,140 -2.2% $       0.40
HISTORY 96,147 94,018 -2,129 -2.2% $       0.26
CNN / HLN 97,194 95,168 -2,026 -2.1% $       0.18
FOOD 97,027 95,041 -1,986 -2.0% $       0.24
E! 94,351 92,452 -1,899 -2.0% $       0.13
BBC-AMERICA 78,413 76,867 -1,546 -2.0% $       0.07
DESTINATION 56,931 55,935 -996 -1.7% $       0.07
ID 86,004 85,062 -942 -1.1% $       0.09
OXYGEN 77,690 77,119 -571 -0.7% $       0.14
TRU TV 89,549 89,593 44 0.0% $       0.15
NAT GEO WILD 57,569 57,634 65 0.1% $       0.12
DISC. LIFE 46,478 46,609 131 0.3% $       0.07
SMITHSONIAN 33,302 34,066 764 2.3% $       0.11
NAT GEO CH 85,398 87,759 2,361 2.8% $       0.24
HBO 35,501 36,512 1,011 2.8%
COOKING 61,959 64,888 2,929 4.7% $       0.08
DIY NETWORK 58,407 61,195 2,788 4.8% $       0.10
VELOCITY 61,372 66,236 4,864 7.9% $       0.14
SHOWTIME 27,366 29,717 2,351 8.6%

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Aidc_long

My AIDC Panels

  • I’m excited about seeing many of my readers in Melbourne, my home town.
  • Both panels are expert-packed!
  • The AIDC team is doing a great job.
  • Please make a point of saying hello!

DEMYSTIFYING VOD
What Video On Demand Means for Docs
Monday 29 February
2.45-3.45pm
https://www.aidc.com.au/sessions/demystifying-vod

  • Rebecca Heap, Head of Strategy and Digital, iView / ABC
  • Roger Jackson, Co-founder, Kinonation
  • Sharon Ramsay-Luck, Head of Sales & Business Development, ABC Commercial
  • Moderator: Peter Hamilton

MAXIMIZE YOUR AIDC
Sunday 28 February
3.30-5pm

  • Jeni McMahon, Screen Victoria
  • Roy Ackerman, Pulse Films
  • Leanne Pooley, Filmmaker
  • Penny Robins, Producer
  • Maya Newell, Producer/Filmmaker
  • Phil Craig, AIDC Board
  • Moderator: Peter Hamilton

My introductory presentation will cover trends across the documentary / unscripted sector. Don’t miss it.