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Streaming TV on ABC and MTV Is Profitable

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Both MTV Networks (s VIA.B) and (s DIS) have achieved profitability in their online video efforts, said execs on a panel in New York last night, according to an account on Multichannel News. The two networks have clear and aggressive strategies for distributing TV shows online — MTVN has aimed for wide distribution while ABC has pushed a walled garden of high-quality streams. And apparently, they’re paying off.

For MTV Networks, online video as a business is profitable, said Greg Clayman, executive vice president of digital distribution and business development — but “the bad news is it’s still a small one, certainly relative to the rest of our business.”

Meanwhile, on a gross-margin basis, is also profitable, with every streamed episode bringing in a profit (though a smaller profit than that of the TV version). “It took us a while to do that…but it’s been really a good business,” said Albert Cheng, Disney/ABC Television Group executive vice president of digital media. Both Cheng and Clayman spoke of attempting to grow online profits to match and even surpass those made on television.

Karen Gilford of Comcast web portal Fancast (s CMCSA) was also on the panel talking up the cableco’s coming efforts to give online content to paying customers. She seemed to be in denial about cord-cutting, describing people who drop their TV service for web alternatives as “a theoretical idea rather than a real trend,” according to the Multichannel story.

Sorry, but as a young person (and not just a NewTeeVeester), I can say with certainty that’s just not true. So it’s a good thing to hear networks are actually making money from what’s going to be many people’s reality.

One thing’s for sure: We’ve come a long way from almost exactly two years ago, when MTVN parent Viacom sued YouTube for $1 billion while barely offering legit alternative versions of its shows online.

10 Responses to “Streaming TV on ABC and MTV Is Profitable”

  1. Dr. John Frink

    Karen is WAY over her head. She’s a good marketer – and takes plenty of credit for various successes at Yahoo – but building a true business in broadband video aggregation is way beyond her.

    The ivory tower in Philly (e.g. Comcast’s HQ) needs to realize that they have NO MONOPOLY power on the Internet! The concept of competing where they do not have monopoly incumbency is just not part of their DNA.

    Here’s some free advice: Make On Demand Online an open API. E.g. if you want to watch legal programming on YouTube, say, or MetaCafe, you can authenticate against On Demand Online at those sites. Don’t try to force everyone to FanCast – you don’t have a monopoly anymore!

  2. Yes, both companies announced that analog dollars are not becoming digital pennies, and there is a common thread in both ABC’s and MTVN’s strategies. Both groups have focused on delivering premium content that allows consumers to obtain and watch in a broadband, readily accessible on-demand environment while offering an audience to leading brand advertisers with superior ad products that work on the platform. Leaders like ABC and MTVN (as well as others like Fox…) are figuring out monetization models that are going to make “Internet delivered Television” consumer compelling, programmer profitable and advertiser effective. With technology costs always coming down, there is no reason why over time Internet delivered Television shouldn’t be as profitable for programmers and better for consumers and advertisers.

  3. Except the money they make on digital is less than the money they make from TV. They may think it’s additive, but it will most likely cannibalize and they may be in danger of decreasing subscription and advertising revenue.