I love the term ‘skin in the game’. Apparently it was coined by noted investor Warren Buffet – http://www.answers.com/topic/skin-in-the-game
Anyway – it basically is meant to demonstrate that you’ll put your own money on the line to back your creation.
Yesterday I was writing about the conundrum facing broadcasters who are looking to migrate content to online. The issue is they will never generate the same yield through online that they currently are through broadcast.
One reason for this is the upfront investment required to secure really great TV content. It’s a competitive market here, so networks need to write big cheques to secure the content that will draw viewers. Often these are group deals – the content creators will sell packages of content to networks. This means they can leverage a hit to sell a show that might be a risk.
One area that might be viable online is looking to stream content that just isn’t available on FTA. Shows that aren’t generating their owners any revenue currently from this territory.
The question is – would anyone watch it? Who knows … anything is possible. Let’s assume they would.
What the online guys could do is try and negotiate revenue share deals with the content creators. ie – offer them, let’s say, 50% of the revenue generated from streams of ‘The Wonder Years’ or ‘Alf’ or ‘Friends’ etc.
Or local operators could enter into JVs with the bigger content creators. Groups like WB, BBC, Fox etc.
Would they be open to a revenue share? Who knows. Maybe – I guess it all depends on how it’s structured and sold.
One concern they might have is how this would impact DVD sales revenue. Another concern is whether it would result in a decrease in revenue they receive from Pay TV operators.
So the main factor is going to be how big the opportunity really is here? If allowing site x to broadcast every episode of Friends on demand is only going to generate $500k … but possibly at the expense of 50,000 DVD unit sales then I’d assume they’d be hesitant to get on board.
What no one wants to do is invest a huge amount in a video site – pay a lot upfront for content and then wait 5-10-15 years for it to become profitable, if ever.
That mistake was, and still is, made by a lot of prominent operators over the past 15 years.