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The Simpsons Worth More Per Viewer On Hulu Than On Fox
N!NJA writes with this excerpt from PCWorld:
"A tectonic shift has taken place for the digital age: ad rates for popular shows like The Simpsons and CSI are higher online than they are on prime-time TV. If a company wants to run ads alongside an episode of The Simpsons on Hulu or TV.com, it will cost the advertiser about $60 per thousand viewers, according to Bloomberg. On prime-time TV that same ad will cost somewhere between $20 and $40 per thousand viewers. Online viewers have to actively seek out the program they want to watch, so advertisers end up with a guaranteed audience for their commercial every time someone clicks play on Hulu or TV.com. Online programs also have an average of 37 seconds of commercials during an episode, while prime-time TV averages nine minutes of ads."
Err, what? I've never seen a banner ad on Hulu, even when I drop to Chrome (no ad-block).
Hulu ads are interstitials, just like on TV. Sometimes they are exactly ads that I've seen on TV also. They cut in at about the same places too. The only difference is that they only last a few seconds rather than a couple minutes per commercial break.
Aside from that, I don't see how it's obvious that if there were some ad sitting there for the entire show, that it would be more expensive than an interstitial placement.
Five year olds have parents who have wallets, and who are frequently willing to open said wallets in order to get said five year old to stop bugging the hell out of them for 5 minutes by buying "Advertised Item X."
The article doesn't mention this either.
In order for an episode of The Simpsons to be worth more in advertising per viewer on Hulu than on regular television, prices for the same spot would need to be between $300 to $600.
Gotcha! It's about 1/7th.
Okay, I actually forgot to include the fact that the rate is about double.
9*60/37/2~=7.29.
So, the inventory of a showing of The Simpsons on Hulu is 37 seconds. A showing on Fox is 9 minues = 540 seconds. If you halve that number to account for the difference in rate you get 37/540 which is about seven.
To plug in dollars it's 540 * $30 = $16,200 vs. 37 * $60 = $2,220, which clearly belies the statement "The Simpsons Worth More Per Viewer On Hulu Than On Fox".
-Peter
Hold on there. While the Math may be wrong you also have to take into account that a certain company is not going to pay for all 9 minutes worth of commercials during a Simpsons episode. They will have signficantly less. Once per commercial break. So I don't think we have all the information to get some exact numbers.
just my 2 cents.
We need to teach you the finer art of Dimensional Analysis....
Facts:
30 Dollars / 1000 Users (for normal TV)
60 Dollars / 1000 Users (for online TV)
540 seconds (commercials for normal TV)
37 seconds (commericals for online TV)
by your numbers,
thats 1"6,200 Dollar seconds per 1000 users vs 2200 Dollar seconds per 1000 users" and it means NOTHING
the article was comparing DOLLARS PER USER, which it gave, properly, as 30 $/viewer and 60 $/viewer... you were trying to mangle it by including the amount of time shown
an advertiser doesn't buy the entire 540 seconds of advertising, that would be retarded, the number cited actually assume different costs given the same short, meaning, 15-30 seconds, which is irrelevant how long it is, because a cheap advertiser would use the same commercial in both places, rather than shoot ones specifically for each medium (a keen one might tailor them, but thats semantics)
It's interesting you say that, because you're not the only one, by far. I have friends who intentionally disconnected their TV from any external inputs (no antenna, no cable), so it's DVDs and games only. One of my daughters bought a 60" Sony a few years ago ... she has cable, and yet she now also no longer watches TV, and is thinking of getting rid of it. I haven't turned my dish on in over half a year ... and this isn't the first time that's happened.
Interactivity and real control changes the equation completely for many of us. Who wants to go back to being spoon-fed?
That's part of the point, with ads as short as they are on Hulu there's really very little point to trying to skip them. It usually takes me more than 30 seconds to skip the commercials on my DVR. Even when using the increment forward button.
Additionally since Hulu gives you some say in what the adverts are for, there's an increased possibility that the product will actually be useful to the viewer. It's not really in anybody's best interest to show men adverts for vagisil.
I wonder what the costs are for a broadcast versus a webcast? For a broadcast you'd need to coordinate multiple stations and time zones, there are power costs to push the signal, station costs, licensing costs.. For a webcast there's the server and pipe sized to the load you expect. Maybe you need Akamai or some other similar system, but I expect that it's much cheaper than broadcast.
For most TV channels, it is much more expensive to broadcast via the web than it is to broadcast via standard television. The obvious reason being that TV channels are set up to broadcast via, well, TV. All of the equipment is already bought and paid for, the processes are in place, the staffing level set, etc. Now you throw this wrench in the works of suddenly asking a TV channel to worry about digital codecs, about digital delivery, about server capacity, all this other crap... it becomes a huge clusterfuck. And it means adding staff, adding equipment, redirecting resources, etc.
I'll say that when Hulu first launched, I was responsible for getting some clips - just clips! - ready for one of the launch channels. We were trying to do the minimum required of us because we knew it was going to be a big headache. And it was. First of all, most of the tapes (yes, tapes) were stored off-site and needed to be located and transported. Then they needed to be digitized, then edited, then encoded. At the time, Hulu would allow you to submit either flv's or "mezzanine" files that were either mpeg2 files (yes, mpeg2) or QuickTimes using the DVC Pro codec. Well, we tried both flvs and QuickTimes and had major problems with both. First, encoding to flv from our digitized files took approximately 24 hours for each clip. (You don't realize how large uncompressed digital files are.) So that was obviously out. Rendering from Final Cut to DVC Pro was much quicker, so we did that. Then we had to figure out how to actually get them the files, and it turned out buying a bunch of drives and FedExing them all over the place was really the only way. But then every flv they encoded from our files ended up stretched, because they couldn't figure out how to handle the non-square pixels that were in their own QT spec (the spec calls for a 720x480 file at a 4:3 aspect ratio).
All of this (plus dealing with the metadata and various other things) ended up taking up basically 100% of my time, plus 100% of two PAs' time, plus a large chunk of various other departments' time, plus probably 30-40% of my boss' time. And we had to buy a bunch of new hardware and software to do all the encodes ourselves that we ended up doing, and come up with all new processes.
You have to think about all the hidden costs. It's not just a case of "oh webcasting uses no bandwidth so it's practically free". Would it be "free" if, say, you suddenly asked General Motors to start making rubber ducks or bathtubs instead of cars? That's pretty much the equivalent. It is a totally new process that needs to be created from scratch. There's almost nothing about webcasting that is similar to broadcasting.
It doesn't even save money after you've got things set up and running somewhat smoothly, because now you've got *two* separate processes going on - broadcast TV still exists and will exist for the foreseeable future.
Anyways, these are the reasons he and one of the executives had given for why they expected to eventually be able to charge a good deal more for 30 seconds of Hulu advertisement than one would normally charge for the same time*viewers over the air. It came up when we were complaining about the studios' decisions to delay some shows by up to 8 days compared to the actual air date. While it was clear this was to prevent an uprising from the affiliates, we still grumbled a bit about it.