How big an audience does a TV show need?

[Aspiring Mogul]

The LA Times says that internet distributors are changing the syndication game. The interesting thing are the numbers.

"Community," NBC's quirky Thursday night comedy, has been a slacker in the ratings.

The sitcom about misfit community college students, starring Joel McHale and Chevy Chase, has averaged about 4 million viewers an episode this season, not enough to guarantee survival in the dog-eat-dog world of network television. The tepid ratings prompted NBC to put the show on hiatus. Still, despite its struggles, the series is headed toward the promised land of syndication.

And

This month, CBS signed on to distribute "Hot in Cleveland," the first scripted hit produced by TV Land channel. (Both are Viacom companies.) The second-season comedy, which stars TV veterans Betty White and Valerie Bertinelli, has been drawing fewer than 2 million viewers an episode, according to Nielsen, the ratings firm — a respectable number for a cable show but much smaller than the audience of most broadcast shows.

So an audience of 4 million or even 2 million is not good for TV but may be good enough for cable. I would love a client base of 2 million in my practice. I'm therefore wondering if there is a market on, say, a Youtube channel for an audience of 4 million. If an episode can be made for $500,000, and it can sell ads for $600,000 an episode, then it's worth it.

How much do ads sell for anyway?

 

[ItDonnedOnMe]

Are you talking about tv ads or online ads? TV depends primarily on the size and demographics of the audience, on YouTube ads are priced based on clicks and prices depend entirely on the competition for a given keyword. They can run from a penny a click up to several dollars, and that revenue will be split with youtube, so you can expect to get no more than a few cents per click.

I think generating $600,000 an episode is unlikely on youtube, and would take far more than 4 million viewers per episode. Click through rates for youtube ads are often less than 1 percent, but even if you do get 1 percent you are only looking at 40,000 clicks and if you average ten cents per click that's only $4000 total. If you somehow got a ten percent click through, or $1 per click, or 40 million viewers per episode - any of which is very, very unlikely - you're still looking at only $40,000.

This is why youtube distribution generally works best for small productions - single creators or teams of 2 or three people. If you can put out weekly episodes to an audience of a couple million you can probably earn enough to make a decent living, especially if you are young and have few responsibilities. Unfortunately it just doesn't scale well to large crews and budgets in the hundreds of thousands per episode.

Of course you also may be able to find sponsors for your videos, and that may be more lucrative than youtube ads - but to chase down hundreds of thousands of dollars per episode in sponsorship is essentially a full time sales job, possibly for a small team of salespeople. Now you have to pay them, and you need even more money. The small, cheap production may be able to supplement their ad income with one or two regular sponsors and essentially double their revenue per episode - because it's still in the low single-digit thousands.

There's one other factor to consider too - it generally takes a year or two of regular output to build a large enough steady audience to generate significant income. That means you need to have a very low burn rate per-episode just to get you to the point where you can start earning income. So, once again, it can work well for someone who can do regular production with little or no crew or overhead - but just doesn't scale to TV production levels.

 

[Aspiring Mogul]

Thanks, I'm learning - how do you know this, may I ask?

 

[PaulGriffith]

Figures I read for the top YouTube earners were between $100k and $400k a year from Ad revenue, and that's doing at least 52 videos a year, some closer to 150. That's the top 10, and it's scales down fast after that down with very few people making more than $10k a year in ad revenue.

Google doesn't allow you to talk about it, so only the people getting the checks know the exact numbers, still...

You can do pretty ok if you get the right show on cable though. There's still a big market for it.

 

[Aspiring Mogul]

Subscribers are cancelling their cable connections, possibly because of free internet alternatives, and this is happening in the US and Canada.

So how do I get the right show on cable?

 

[Morris]

Time Warner’s HBO expects to top $1 billion in international revenue this year, up about 50% over the figure it recorded three years ago, the Wall Street Journal reported. http://www.hollywoodreporter.com/news/hbo-top-1-billion-international-176907

 

[Aspiring Mogul]

Fascinating read.

While the network's number of paying U.S. subscribers has remained virtually flat at 40 million, its international users have increased to more than 42 million this year from about 28 million in 2007, the Journal said.

This jibes with my links, which state that subscribers in North America are declining. But this is offset by overseas markets. I have also read of how producers are now focusing on developing shows for the Asian markets. So a consistent picture is emerging.

The paper highlighted that Thrones lies at the intersection of several strategic focus areas for HBO, including international growth, a renewed focus on originals and technological advances.

For example, it will be the first show that will see HBO make available some episodes via burgeoning streaming video service HBO Go before they are televised. Early next month, the service, designed to strengthen the bond that subscribers have with HBO, will be available on the iPad and Android devices.

So HBO is also banking on an internet strategy. That said, cable can also offer internet services, so there seems to be an emerging trend of offering shows over some sort of streaming services.

HBO has in the past three years doubled spending on finding and developing original series, such as Boardwalk Empire, True Blood and Thrones, amid an industry-wide focus on originals.

That seems to break from the industry trend in focusing on remakes. I applaud HBO.