Monday, January 28, 2013

What is a TV viewer worth?

I don't watch alot of TV, but when I ride my exercise bike I turn on the TV to try to distract myself from the boring ride.  Many (most) days I simply can't find a single thing on worth watching anymore - and even when I can find something to watch I began to notice all the advertising that keeps interrupting the shows.  And it got me to thinking about how much I pay to have the TV channels, and that I'm paying for them to ship all this advertising to me, and I should at least get something that can sufficiently distract me for the hour a day I ride my exercise bike.

So I got to wondering how much me watching a show was actually worth to the networks - and some of the estimates I've seen are pretty low.

Here's an estimate of $0.10 per hour that advertisers pay per viewer.

Here's another estimate of $0.04 per hour.

So I'm thinking the days of cable TV being able to charge $50-$60 per month are about to end, because even if I watch an outrageous amount of 40 hours of TV per week - that's only $4 a week at prices advertisers are paying for my eyeballs / or $16 per month.  If a forum is setup for me to buy my programming directly from the networks via internet download - costs should drop dramatically.   Should....

Here's a quote saying the Superbowl is getting $3.5 to $4 million for a 30 second spot.  Apparently 111 million viewers - or about $0.04 per single viewer for 30 second slot - (or $0.08 per viewer per advertising minute) and they run alot of ads on the superbowl - so obviously the superbowl per hour is much higher.  But lets say they run 20 minutes of ads during an hour of the Superbowl - so that comes in at 20 x $0.08 = $1.60 per hour per viewer, and that's the absolute upper bound of cost for the most watched show in the history of TV.

So my thought is related to digital products in this way -
- We have self publishing where authors sell directly to end customer without intermediary.  Amazon/Barnes and Noble.
- Music is being sold this way - we can all publish our own albums now.
- Why are TV shows not being sold this way via micro-transactions at closer to the cost that they're paying advertisers?  It seems the networks and content providers could make a good bite of cash and improve margins by selling direct to the end user digitally.

I'll pay more than $0.04/hr of content, more than $0.10/hr of content, just to watch the stuff without all the ads and actually have something interesting to watch when I want to ride my bike.  And I don't feel like I need to pay very high cable fees, or monthly charges for the access to DVR or whatever other technology exists.

An internet connection is a must, but it seems to me TV is doing to itself what radio did many years ago - through consolidation and by diluting and degrading the product in many ways.  This drove many to other outlets like satellite radio, and to their own portable music/entertainment on their phones/mp3 players.  Is TV programming not far behind from going this same route?

Some will say that it already has, but from what I can tell the costs for alternate methods can still be quite a bit higher than the costs I'm quoting ($0.04 to $0.10 per hour of viewing) - so I'm thinking there's considerable room for the market to shake out.  Buying DVD's or streaming services still seems to come in at considerably higher prices than what advertisers say I'm worth.

I really want something I can hook to my router - pick the shows I want to watch - and buy them ala-carte.  Of course I can't count on anything to stream via my internet connection right now - but in theory I would like to sit down at my exercise bike - click a button - and buy a couple old Seinfeld episodes to watch for $0.10-$0.20 or so and be done with it for that day.

I sortof agree with this post:  Here's what buying movies and TV shows looks like 
quote:  "people are actually trying to give Hollywood money, and Hollywood is just ignoring them."

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