I never said streaming has to be commercial free. I want it to be commercial free, personally I would gladly pay more to have it commercial free (and I do pay for Hulu commercial-free), but I realize not everyone agrees with me, and thus commercials are here to stay.
I didn't say you said that. I was just expanding my answer to you to talk to those who will argue that they also want "commercial free" as part of this al-a-carte dream.
Yes, currently ad revenue on cabletv is huge. Let's take your number, $54/household/month. Are you saying that by inserting commercials into streaming tv they wouldn't get the same $54 or more? I know for a fact that a 30 second ad shown to 1000 viewers on Hulu costs more than a 30 second ad shown one time on a cabletv channel at a time when nielson ratings say about 1000 people will be watching.
No, I'm making the point about al-a-carte streaming commercial revenue vs. "as is" commercial revenue... that streaming ads are not priced high enough to make up for the same ad running in the "as is" on the channel a viewer watches and the other 25 channels in the bundle of channels that the viewer is NOT watching.
To simplify:
- how many ads run in a given program on a streaming service like Hulu? You pick the number. Let's call it X.
- how many ads run during that same program in the "as is" model? You pick this too but it should be quite a few more: X times Y. You can pick Y too.
- how many ads run during the same amount of time you are watching that program on the 200 other channels you aren't watching? That will be probably hundreds more: (X times Y) times 200 channels.
Price the commercials running during that one program. Bias the pricing so that those X commercials running in the al-a-carte streaming service cost more (even much more) than the (X times Y) commercials running on the 200 channels you are not watching.
How much do the streaming commercials need to cost to make up for the losses of ((X times Y) times 200 channels) in the "as is" to not result in a loss of advertising revenue, so that those of us looking for our deep discount don't need to make up for those losses and/or those creating what we do want to watch don't have to take the big revenue hit?
Factor in the commercials running on all 200 channels while you are NOT watching because those are still sold and thus make money for the industry. Even while we sleep a LOT of money is being made by those 200 channels "I never watch" existing. And it's all paid for by other people (those paying to run the commercials) much more so than a /200 slice of the monthly subscription fee we pay.
Look at Google's business model - targeted ads are more valuable and thus cost more. Finding that $54 in streaming ads is no difficult task.
Then go work at Apple and sell them on this idea because apparently they can't seem to sell the content owners that they will make more money by going this way with Apple.
Then sell us dreamers on the concept that we want commercials in this al-a-carte dream... because many of seem to have commercial-free as the second biggest want in this dream, right behind the huge discount vs. what "I'm" paying now.
You're in search of who has to take the hit? The big content owners (viacom, ge, time warner, disney, etc.) are the ones who will take the hit, because I think (and they fear) that in a more democratized system, their content will be worth less and smaller indie content will be worth more (or rather, they will both be worth closer to equal which means a reduction for the big ones and an increase for the small guys). They would rather keep the status quo, than risk the fallout from the change that is coming.
Again, flip the subject matter to Apple. I want my next iPhone at 90% off. I want my next Mac at 90% off. If the masses want and then get what I want too, what happens? Does Apple just keep right on delivering new iPhones and Macs at 90% off? Or does the flow of new product dry up because they can't make their business work with such a huge discount for us buyers?
And the "smaller indie content" business is already well in place... for many years now. The low-cost productions on youtube has youtube for distribution and monetization with ads. They also have Vimeo. If they like, they can get their independent productions into the iTunes store, Amazon and others. They've had all of these distribution and monetization channels for all of these years. So why don't the indie's rule already? Why aren't the low-cost production houses that could deliver programming at 90% off of what we pay now
already winning a huge following? Why do the Viacoms, Disneys, etc still own the bulk of the eyes & minds of the viewing public if the indie productions are just as good... or just as compelling to the masses?
Because what us "dreamers" actually want is all of the high production value- the professional writing, directing, acting, special effects, rich sets, quality stunt work, etc to keep on rolling in but we think there is some way to get that at 80% or 90% off of current pricing. We've deluded ourselves into a misconception that we are actually paying for every additional channel bundled into a cable subscription (when most of the channels are actually thrown into the bundles to make their money on commercials instead of getting another slice of subscriber revenue); so we resent the concept and thus believe the math really could be 200 channels/$100 per month = 50 cents per channel. I only watch 10 channels so my bill should drop from $100 to $5 per month.
Many of us want that commercial-free too, so we want the Studios to take the hit of us paying 80% or less for their products AND we want the Studios to also lose all of the commercials-revenue (otherwise known as OPM) too. But we want the quality & breadth & depth of it all to keep on coming and believe that Apple can find a way... and get their 30%... and that broadband pipe controllers will just let Apple have it all without making it up in broadband fees.
