Worse, he continues, why is it necessary to deal with “tiers” (such as Basic, Expanded Basic, Digital, HDTV) each of which require additional fees? When will it be possible to access just the programs he watches? I’ve often wondered the same thing (and not just for PitS shows.)
I also wonder: how much will these shows cost? How much should they cost? A recent study (quoted here) estimates that $1/episode is the magic number, and, indeed, you’ll find DVDs that charge you more: based on list price, an epsiode of “Buffy” is about $2.75, while “Friends” weighs in at $1.40.
Of course, that’s to own the shows. How many things that you watch would you want to own? For me, the answer is “all”, because I watch a total of perhaps 3 shows, which would set me back a whopping $12/mo. at the $1/ep rate. But most people watch a lot more TV than I do.
In fact, any household that watches more than two shows a day (on average) would have to pay more than $60/mo, so that gets expensive fast. Could they go cheaper?
Let’s do some back-of-the-envelope math. According to Nielsen Media Research, the highest-rated non-live show for 14-20 Mar 2005 was “Cold Case”. The CBS show came in at #3, with a 17.0 share of HUT for total of just over 12 million households.
“Cold Case” is an hour-long show, which means it has roughly 18 minutes of commercials. Now, keep in mind that some of that time will be used for network promos, some given over to affiliates, etc. But we’ll ignore that in our calculations, and assume it’s all sold at the highest rate. So if these figures, which purport to be lifted from Advertising Age, are correct, CBS charges about $153k per 30 sec. spot on this show. That means the most recent episode of “Cold Case” could have brought CBS as much as:
18 minutes * 2 spots/minute * $153,305 = $5,518,980
So the highest possible figure for that episode would be $5.5m. Not bad for an hour, eh? Let’s further suppose that B’s household contained at least one “Cold Case” fan. If they wanted to download an episode, and pay CBS what they would have earned, how much would that be? I’d say:
$5,518,980 per episode / 12,041,000 households = 46¢ per household
Well! Not bad at all, there. Of course, there’s no easy way to charge so small an amount, and without multicasting or a similar solution, the bandwidth costs would be extortionate. (I can hear
Except: why does CBS deserve a cut? CBS and the other networks are merely methods of delivery. It’s the production companies that make what we want to see: Sony brought us “Seinfeld”, Warner Bros. Television creates “ER” and “The West Wing”, and so on. The nets have been buying into these production companies as a way to control their costs, but according to my searches still only tend to pay in the $2-3 million/episode range (except for extremely expensive shows like “ER”).
At $3m, the production company needs just 25¢ a household to cover its nut, which even
For Further Discussion
- How fast a “pipe” would we need for HD downloads not to suck?
- If internet delivered TV, what would CableCos charge for broadband?
- If every TV show (ever) was available on demand, what would happen to ratings?
- How would we find good, new stuff?
- What would happen to the “water-cooler” effect if everyone’s watching TV-on-demand?