The irrelevant stats on video revenue

There’s a blog post* somewhere on The Guardian based around the latest Web TV Enterprise survey on video spend.

It talks about the very high percent of advertisers who are planning on increasing their online video spend by very high percentage amounts. As we all know though, of such a tiny base you are always going to get nice, plump % growth figures.

That’s not my problem here though (and besides, it’s hardly like Web TV Ent, or The Guardian, or web video stakeholders are the only ones guilty of that little trick).

The issue I have with articles lately about online video is that when they talk about revenue or profitability, they fail to acknowledge that without the TV networks’ contributions re production costs, the so-called “more profitable” online video would have to incur such massive absolute costs that it would not be able to exist, let alone be profitable.

One of the best examples: from said blog post:

“We are hugely pleased with the numbers for ITV.com on revenue,” ITV’s director of online content, Ben McOwen Wilson, told Reuters at the Edinburgh Television Festival. “We get 8 pence per hour on TV. Online, we are getting more than that.”

Yes, you might make more in “pence per hour” revenue from online video than broadcast video, but last time I looked**, ITV’s online revenues were approx 1.4% of their TV revenues. Let’s take away 98.6% of The X Factor’s budget and see what sort of show Simon Cowell can make with that.

(* Written by one Mercedes Bunz incidentally. Srsly. Not sure if thats a nome de plume or not. )

(** ITV’s interim results for the 6 months to June 2009 - itv.com revenue rather than all of ITV’s online revenue as that included non-VoD activities such as the fantastically successful Friends Reunited)