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Is There Cash in the Video Stream?

Well into their first season of streaming primetime series for free online, the major broadcast networks have yet to release significant data on viewership. ABC, NBC and CBS report increased usage of their streaming services and modest on-air growth for the series being streamed. But the networks have not disclosed details about the performance of individual shows or whether their video trials have been profitable. And with no third-party tracking of Web streaming available to the public, the networks' prospects for monetizing online video à la broadcast television remain unclear.

Nielsen Media Research and comScore track streaming, but samples are limited and released only to clients. Media buyers generally give the networks high marks on tracking and sharing data with advertisers, including how individual shows are performing, even though advertisers generally can't buy in on a show-by-show basis.

“The networks have been good partners, and they are giving us as much information as we feel is necessary at the given time,” says Kari Hooper, associate media director in the Video Investment Group at Starcom, which has done streaming deals with several networks this fall.

But some say the networks are loathe to publicize what are suspected to be underwhelming results.

“They're spending all this time and money, and there's all this hoopla” about streaming video, says Dan Rayburn, executive VP for online industry Website “But they're not telling you how it's going in terms of revenue and ad dollars and viewership, simply because they're afraid these numbers will look too small.”

Networks pay content-delivery networks to stream their video based on the bit rate at which the video is streamed and the bandwidth that is needed to accommodate the traffic. So, for an hour-long episode, networks pay anywhere from “fractions of a penny” to 3¢ per viewer, Rayburn estimates.

Whether ad dollars make that up is unclear. Published reports put the price of an streaming sponsorship at $100,000-$200,000 per advertiser per quarter, but the network will not confirm those numbers.

“Right now, the performance of the platform is a good indication that it's a viable growth opportunity,” says Albert Cheng, executive VP of digital media for the Disney-ABC TV Group. “It's still too early to say what the economic model looks like.”

Different models

The networks also sell their streaming ads differently. ABC, for example, charges a flat fee to advertisers (which include Home Depot and Verizon) to sponsor entire individual episodes, but the network rotates the shows in which it runs those ads. NBC sells sponsorships to advertisers like Toyota based on how many videos are streamed and pages viewed.

“Everything's so new and different, it's really hard to come up with a standard statement of how everybody's selling it,” says Ruby Gottleib, senior VP/managing director for Horizon Interactive.

Although the networks won't reveal streams per show, they do provide nuggets of information about the viewing patterns. ABC, which tracks episode “starts” rather than the multiple streaming segments within each show, logged 7.3 million starts at between Sept. 22 and Oct. 16—already a jump over the 5.7 million starts it saw during its two-month streaming trial last spring.

CBS won't release how many streams it has logged on its broadband site Innertube but names Jericho, Survivor and CSI as the most streamed shows since the network began offering them Sept. 14.

NBC started streaming shows on its new video player Oct. 1 and since then has logged more than 9 million streams, with "substantial" increases week to week, says  Jeff Gaspin. Gaspin,  NBC Universal president of cable entertainment, digital content and cross-network strategy, says that is on track to meet or exceed advertiser expectations.

Gaspin also notes the surprising online performance of new drama Friday Night Lights. Although streaming volume largely mirrors TV viewing, the show is being streamed more than its ratings would indicate. Whether that will impact NBC's on-air plans for the show remains to be seen.

“I certainly talk about that at our meetings and let people know the trends we see, but I can't tell you anyone's acting upon that yet,” Gaspin says. “You certainly, over time, hope you can look at ancillary markets like online downloads to help us determine whether there's a greater life than what we might initially believe.”

No mass consumption

As for whether online streaming has pulled viewers away from the TV, Gaspin isn't worried.

“You've got 100 million homes,” he says. “If you've got 1 million to 2 million people potentially taking a look at part of a series online, it doesn't hurt.”

By the same token, says Streaming­Media's Rayburn, that 1 million-2 million people do not a media revolution make.

“People want to talk about how big video on the Internet is and how much there's a shift from terrestrial broadcast and how dollars are going to move,” Rayburn says. “But when it comes to mass consumption, it's just not there. If it was, the networks would be releasing numbers like crazy.”