Friday, July 17, 2009

How Much Money is TV?

So I'm trying to figure out how much a network "charges" per hour -- for a person watching a TV show -- to an advertiser. It turns out that information is very hard to come by. It depends on who Neilson (or whomever) says is watching (is it the coveted 18-to-35 year old male?), when (late night?), and where (NY metropolitan area, South Dakota?)

And nobody wants that information public. The networks want to protect their pricing, the advertising agencies want to protect their proprietary metrics, everybody is nuts.

1. So, let's say national TV spots might be (in the cheapest) about $5 for 1000 pairs of eyes for 30 seconds.

2. And let's pretend that a show like TNT's Leverage gets (at this point in the lousy advertising market)... $50,000 for 30-seconds? Does that jibe with the $5/1000 viewers stipulation above? No, that would imply ten million viewers. I think the best they've done is 3.5 million viewers.

But I'm going to stick with the $50,000 for 30-seconds number because... well because it's an even number.

Anyway, if Leverage is an hour-long show then there are about 12 minutes of "national" advertising (and 4 minutes of local ad revenue which the network doesn't get.) So TNT grosses about 1.2 million dollars on the first airing of the show.

I bet there's a formula for figuring out how much money they make in the first year of a TV program's debut. I bet it's something like 2x the first airing's revenue. Who knows? Maybe they figure the total revenue to be something around 3x to 5x the first airing's revenue. Who knows? About 40 people probably know the real numbers. I'm not one of those people.

Anyway, this was just some thinking begat by the notion of paying $1.99 for an episode of a TV show on, say, Amazon. Right now, with commercial television, we "pay" something like 12 cents(?) (plus the fact that we have to watch when they air the show), (plus the cost of your cable/satellite if you're watching a cable-only channel), to watch the show. We don't pay that money directly as the advertisers are sold, well, us. But if we buy their stuff then we can think of the cost as a tax on us.

Anyway. 12 cents vs a buck ninety-nine. As long as I didn't make a mistake in the decimal point. If I did, maybe someone will tell me.

OK. I'm tired of thinking about this. Look at the nice bunny.

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