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Summary:

Did online viewers kill Caprica? Not exactly, says SyFy Digital’s GM Craig Engler. However, Hulu and Co. don’t bring in nearly as much money as traditional advertising, which is why Nielsen ratings still matter more than anything else when it comes to a show’s fate.

caprica

Okay, I gotta admit it: I’m a huge fan of Caprica, and I’m severely disappointed that SyFy canceled the show. But I might just have to blame my own online viewing habits for the Battlestar Galactica prequel not sticking around for a second season, according to SyFy Digital’s GM and senior vice president Craig Engler, who just blogged about show cancellations and the ratings system on the network’s Blastr.com website.

The main purpose of Engler’s post was to clear up some misconceptions:

“When sci-fi TV shows gets canceled (on any network), many fans talk about how the ratings system is broken and doesn’t count sci-fi viewers correctly. After all, sci-fi fans are tech-savvy and don’t watch live TV shows on TV … they DVR them, they buy them on iTunes and they illegally download them from BitTorrent. If the archaic Nielsen system only took these viewers into account, many sci-fi TV shows would have massive ratings and last many more seasons.”

Engler tried to disspell some of these notions by saying that his network actually does track all kinds of usage, including traditional Nielsen ratings, DVR data, cable VOD, online views on sites like Hulu, online pay per view and illegal downloads. However, some of those numbers only mean that much to SyFy, simply because different types of use also bring in different kinds of revenue.

Online ads still don’t bring in nearly as much money as traditional advertising on TV, he wrote:

“If you add up all the money you get selling ads in live and DVR viewing and stack that against all the money you bring in through every other kind of viewing method, you’d probably be lucky to get $1 in online revenue for the same number of views that would bring in $10 on TV. And that’s likely an optimistic number.”

In other words: When it comes to SyFy’s bottom line, you’ll need ten views on Hulu (or on its own site, for that matter) to make up for one person not tuning in via traditional cable TV. And piracy of course doesn’t really bring anything to the bottom line either.

So how can networks like SyFy solve the conundrum of catering to a tech-savvy audience whose media consumption habits bring in less money? First of all, it’s worth noting that Engler actually doesn’t think online viewing is a huge money sink right now, simply because the audience is too small. But this could change with more people cutting the cord and embracing online viewing.

Many commenters still weren’t satisfied with Engler’s explanation, and part of me of course also hopes that there’s a way to bring a show like Caprica back. Well, maybe there is…sometime in the future. Responding to a reader’s suggestion to offer shows a second life through iTunes downloads or other forms of online-only financing, Engler said:

I don’t think the industry is close to that yet, although I think it could get there someday. Even inexpensive Web series can’t survive that way yet. Soon hopefully!

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  1. Agreed, Caprica was a great show. It only got better each episode as the writers found their footing.

    I’m sorry that I watched it on Hulu. sniff sniff

    Maybe the science fiction can demand a higher price for advertisements. It seems the market is there.

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  2. I wonder if online advertising is really that much more valuable than tv or magazine ads. Other wise then there should be 10x revenue from online instead of the other way around. I guess its because there are no local offices for online channels to generate the kind of revenue needed to support the online networks.

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  3. I agree, with Ben on this one. Why not charge advertisers more to provide the program free on Hulu and other online distributors? Friends and I have hypothesized that people retain ads from Hulu and its ilk better than either TV or TiVo. TiVo’ers skip ads altogether. Live television ad breaks are long enough that people tend to talk through them, run to the bathroom, or make themselves snacks. But on Hulu and the network video players the 30 second ad breaks are (a) impossible to skip, and (b) too short to run away from. Thus, the ad recall online is likely to be superior to that from other types of media, to say nothing of the medium’s ability to target customers. All these are reasons the networks should be able to market ad space online for great rates. In reality, I guess that doesn’t seem to be happening.

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  4. It’s not the ratings system that’s broken, it’s the advertising system.

    It’s unfortunate that advertisers don’t get the value of HULU. It gets viewers to watch ads that would have been TIVOed away otherwise.

    I, for one, wouldn’t care if basic demographic info was given to an advertiser from HULU (so long as I’m still anonymous), which one would think would actually make the advertising more effective. In fact, HULU has the capability to show me ads that are relevant to me. I don’t NEED to see 6 ads in a commercial break if you can show me the 1 that I’ll actually watch. HULU can obviously change up the ads on an individual episode, why not cater them to the watcher?

    We’ll get there, but, unfortunately, there will be some good shows that fall by the wayside in the mean time.

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  5. The trouble with Caprica is is took too long to get going. Once it did it was brilliant. The same is also true of SGU.

    I think the blame here lies with the writers, not the viewers.

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    1. @mark Really? i could swear that we just read an article that said the show had viewers and that the problem was that they didn’t conform to the current advertising system’s definition of an ideal viewer.

      Don’t get me wrong, I do wish that Caprica had started off a little faster, but I’m one of the weird ones who was happy with SGU from the get-go.

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      1. It had viewers but not enough general demographic viewers to attract a renewal.

        SGU was a bit ropey for the first half of season one and then hit its stride absolutely.

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      2. I guess that’s the point I’m making. If there are enough viewers, but “the system” needs them to be “general demographic” viewers, the system is broken. It should be enough to have a good number of eyeballs, and now the technology is there so that ads can be customized to the viewer to make sure that they’re more likely to respond to them.

        I have a Mac Mini hooked to our main TV, so I’m exactly who the system doesn’t view as a real viewer. The thing is, I’m not going back, it’s been a wonderful 2+ years without the cord. I look forward to when there is a way to fund shows based off of my type of viewership.

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  6. This is a very important post. Content costs money. Lots of it. And right now non-traditional viewing windows just don’t cover the cost of the product. Pretty simple math. Sci-fi customers are indeed valuable but not when they skip ads and pirate content.

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  7. [...] the potential for it is there.  I’ve written about this before and recently made a similar comment on NewTeeVee explaining my thoughts: Why not charge advertisers more to provide the program free [...]

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  8. I am delighted someone from a network clarified how these decisions are made. Try watching one of your favorite shows and estimating the cost of cast, locations, production design and effects. It’s obvious the money has to come from somewhere and right now the traditional commercial is still the main supplier. I’ll be keeping an eye on internet-based services to see what they do to stay in the game. Hulu is convenient, but will it be as appealing if I sit through more breaks or it costs me nearly the same as my cable company per month?

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