THE BLOG
11/15/2010 09:42 pm ET Updated May 25, 2011

TV Playbook - Part 2 - Monetization

Monetization
(View Previous: Introduction, Part 01)

TV networks make money in a few different ways. Some of these revenue streams are large, while most of them are incremental. For traditional TV networks, the 2 primary sources of revenue are: 1) advertising and 2) licensing.

Similar to advertising on the web, TV networks work with impressions. The price of advertising depends on the time-slot and ratings of a show. If a show is popular, an advertiser pays more money. The other method of revenue is licensing. In this scenario, TV networks license their content to cable / satellite providers and charge them for access to their content.

For a network starting in 2010, it'll be an uphill battle to charge hefty licensing fees. However, they can work around that by building and executing custom campaigns based around their television, web and mobile properties. Advertisers and established TV networks have to go through a learning curve to integrate various components of an advertising campaign. However, for companies that are just starting out, it's easier to execute such campaigns.

5 monetization options for TV networks in 2010:
  • Sell integrated campaigns -- TV, web and mobile.
  • Enhance interactivity -- ensure every campaign has a call-to-action. This will lead to higher ad rates.
  • Don't ignore or underestimate new / innovative campaigns. Its success might define your success.
  • Web and mobile products are not second-tier -- they're growing markets.
  • Sell through partnerships -- companies like iTunes and Amazon work with content publishers to sell directly across multiple channels. Work with them to generate and promote revenue.

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Aanarav Sareen is a content creator and digital media consultant. He blogs at Digital Media Business and publishes the monthly Digital Media Newsletter. He's also the host of the weekly Digital Media Podcast.