Diane Mermigas, who desperately needs an editor to trim down her stories and shape them better, has churned some numbers on the economics of TV show downloads and how they stack against conventional TV returns.
According to JPMorgan Chase analyst Spencer Wang, one-episode of a hit show on network TV would generate about $12 million in gross ad revenue (assuming 17 million viewers). By comparison, even in the worst-case scenario — with 20% of TV viewers opting for downloads, 100% of which overlap with existing programs — downloaded episodes of such popular series can generate an estimated $15 million in revenue. The main reason is that the $1.44 in download revenue per user (or 70% of the $1.99 per download) is greater than the estimated 57 cents in advertising revenue per user generated under the current model.
The content owners take from downloading is nearly the same that a commercial-fee TV series episode generates from a DVD boxed set.
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