February 24, 2008

Is The 17 Day "Initial Streaming Window" A Ripoff For Writer's?

If there was one red flag in the agreement drawn up by the Writer's Guild of America and the Alliance of Motion Picture and Television Producers at the end of the Writer's Strike, it was definitely the 17-day window in which writer's will not see any revenues after content they wrote is streamed online.

Last year networks only made $120 million in ad revenues from free streamed content, compared to the $9 billion spent on traditional TV ads. And with NBC admitting that 78% of their online viewers watch streaming video to catch up on episodes they missed on TV, we have to wonder if writer's are really being ripped off here...

One thing is for sure, it's too soon to tell. Online video advertising is growing at a much faster rate than TV advertising, doubling between 2005 and 2006, up to $1.3 billion last year and expected to reach an impressive $7 billion by 2012. These numbers include all online video advertising dollars, not just the networks, but the growth rate is impressive. Furthermore, advertisers are becoming rather fond of online video advertising because it's much more effective than TV advertising. Brand recall of commercial messages on TV is typically below 10%, while some online advertisers are seeing recall rates above 60%. Why the difference? For one thing, you can't use your TiVo to skip online advertising and secondly, online advertising is more personal and interactive. By targeting ads more effectively on the web, advertisers are seeing a better bang for their buck.

So even though the "initial streaming window" of 17 days may be irksome for the writer's, they've finally assured themselves a piece of what will eventually be a very large pie.

Via Broadcasting & Cable