Blog: Show me the money

As audiences and advertising dollars continue to shift time and money online, most of us these days recognise the value of the medium.

It is not only a place to market shows, build relationships with audiences, and distribute video clips; but it's also a medium where we can genuinely extend the television experience (www.americanidol.com); and launch new entertainment brands (www.bebo.com/jellybeats) and totally new products (www.webkinz.com).

So you'd think we'd see a more fundamental shift in broadcasters' commissioning budgets as well as significant content investment by online channels.

The reality is most show-sites still adhere to some version of the "clip, pic and game" approach.

Nearly all broadcasters only commission online content if it's supporting their shows, rather than see it as a distinct medium in which they operate, and online channels don't have any significant commissioning budgets.

Yes, there are some exceptions, whether that's HBO's Voyeur (www.hbovoyeur.com/), Channel 4's FourDocs (www.channel4.com/fourdocs/) or Bebo's Kate Modern (www.bebo.com/katemodern), but these are the exceptions that prove the rule.

Why is this the case? Is it likely to change and what are the implications for television producers? In the case of broadcasters, it's primarily a short-term question.

Understandably, their business is still defined as "television", the key success measure is ratings and most people come from within the industry. It therefore makes total sense that online is still there to predominantly service a television-driven organisation.

As audiences and advertisers continue to shift towards what is already critical mass, and some innovative broadcasters pave the way, that will change.

The "business" will be redefined to something more akin to "arbiter of taste", commissioning content cross- and irrespective of platform; success measures will include new terms such as unique users, repeat visits and time spent; and web-folk will be fast-tracked through the organisation.

In the case of online media owners it's more mixed. A key but short-term issue is the fact that video still has a relatively small share of the overall online advertising pie.

Most people we speak to believe this will change significantly within the next 12 to 18 months as more and more brand owners see the opportunity of online video advertising and allocate a larger and larger share of their overall budgets to this format.

With higher budgets comes a need for more quality content that advertisers want to be associated with, which will in turn drive online channel owners to offer more engaging content to satisfy their clients' requests.

There are also some structural issues when it comes to online which may shape the overall content budget landscape of the future. The first is that online channels are as much about functionality and services as they are about content.

To attract and retain eyeballs, media owners need to offer user-friendly navigation, as well as free email, web-space, social-networking and other services, to hook users in and then send them to the content where they can sell valuable ad space.

Content budgets will therefore only ever be a proportion of the overall audience investment. The second issue is that online channels can fulfill most of their content needs by licensing in and repackaging both professional and UGC video, audio and text content that's already been produced or is being produced by their own audience, rather than taking the risk of commissioning new and exclusive content.

Online channels only need (and are likely to commission) content that genuinely helps them differentiate their overall offering in the wider market, helps promote a particular service or functionality, or satisfies a particular advertiser's need.

While this structural issue is particular to online at the moment, as the two media become more alike (i.e. on demand and interactive) it is likely to become more common to both.

From a content producer's point of view - in the short to medium term - the broadcaster's online budgets for genuine show extensions and new online properties will grow but in the medium to long term commissioning budgets overall are more likely to become focused on concepts that are either big; showcase a channel's services and functionality; or are advertiser funded or, ideally, all of the above.

This means that producers will need to be in the big budget league, have an in-depth understanding of online audiences and platforms, and be aligned to an advertising agency network to stand the best chance of tapping into major content budgets in the longer term.

Jens Bachem is the managing director of Digital Outlook

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