New developments benefit TV content producers in a number of ways. It does remain true, at least for the present, that major broadcasters hold the keys to major production budgets. But there are ways to raise funds and to distribute content outside of the traditional channels.
YouTube is truly at the forefront of changing video distribution. After first investing in hundreds of dedicated channels and enabling aggregators to gain significant advertising revenues by means of multi-channel networks, Google is now clearing the way for content producers to create their own subscription channels. It is an excellent opportunity for producers to sell programming, especially niche or specialized programming, to viewers who will pay for it. A sports team or a music group, for example, might want to create or co-create a special channel that would offer all manner of special and behind-the-scenes programming. For example, I’m betting that there are a sizable number of people who might want to watch several hours of Aerosmith programming each week on a dedicated channel.
YouTube is not the only Internet distributor making a concerted effort to create a new market. Amazon and Netflix are also aggressively courting viewers and encouraging them “to cut the cable.” The most interesting development here is that Internet distributors have chosen not to integrate themselves into existing broadcast models, but have really created their own distribution channels. Much has been written about Netflix’s unique release of “House of Cards” in one large bloc of episodes. New experiments and new opportunities for producers are undoubtedly on the way. VC David Pakman of Venrock sees an opportunity for start-ups to provide mechanism to reach and/or access the programming appearing on disparate platforms.
Crowdfunding has proven to mean another means to serious production funds. As a funding mechanism it has reached a stage of maturity where it is raising serious funds and attracting serious players. A movie based on the culty television series Veronica Mars raised more than $2million in a matter of days. What’s most interesting about the crowdfunding model is that a television show that attracts a passionate but smaller audience (at least by traditional network television standards) can find a new life and actually turn a profit.
Sponsorships are another way for content producers to make it online. In the traditional television model, the producers sold and turned over the programming to the distributors, the networks, who sold the advertising and kept the revenues. Simply put, the networks kept what was left after paying the producers. It’s now possible for producers to make deals with sponsors and to self-distribute, thus cutting out the middlemen (the networks). Of course the networks did aggregate a massive audience, and that’s ultimately what the sponsors are paying for.
New opportunities for TV content producers are clearly emerging. The difficulty ahead will be in breaking away from the pack – getting noticed in a field of thousands of competitors. It’s one thing to have an opportunity. It’s another thing to get convert an opportunity into a successful, money making venture.