TV Producers Need a Business Model to Go Online

by on 29 July, 2007 - 19:48

by: Alain Thys

This week, two events caught my attention which are not that significant on their own, yet in combination made me think. First there was CBS Corp's Chief Exec who complained that his viewers were not 'helping the networks' when it comes to pretending they actually watch the advertisements.

Then, the Lonelygirl crowd launched its new show "Kate Modern". This time the action is in London and we're looking at multiple characters, outside locations and plot twists and hints which promise to be in line with any British light drama series. Only as it's backed by bebo.com, there is no TV station in sight.

But in spite of the millions of video-watching consumers online, there are few Lonelygirls who truly stand out. And when they do, they work on a very tight budget, often linked to the limit on their credit card.

The reason for this is obvious. Even though online projects attract audiences which can rival mid-range TV shows, they are dispersed across various geographies and demographics while the marketing budgets to support them are still organized by country and segment. In short, they may get the numbers as a whole, yet these don't square with the way media-buyers make most of their money.

The end result is a world where TV stations are running out of audiences to pay for big productions, while the long tail online makes audiences too fragmented to go beyond bedroom production value.

So I wonder when new business models will emerge that fundamentally change this equation. When will global brands simply finance high production quality online shows for international markets, series and movies (the last ones I really enjoyed date from 2001/2). When will fan-financing generate sufficient cash to support real productions (I still dream of bringing back a sequel to Fawlty Towers in which Basil gets to run a Canadian airline)? When will portals and ISPs start with some "real" production projects?

Especially if you consider that international production costs are considerably lower than those in the US, this should be feasible. After all, for the price of one sitcom in the US, you can almost produce a series in Europe and half a station's worth of content in India or China.  Also, if you give production teams like the one behind LonelyGirl a million they'd probably give you the moon in return.

The tools, creativity and audiences are there. All that's needed is a business model that turns the next YouTube into a high production value machine.

I wonder who plays first?