NEW YORK: Ads in TV shows streamed online now cost more per viewer than rates for the home platform. TV spots continue to generate more money overall, but the total take is shrinking along with the economy. Web rates add incremental revenue, but not enough to make up for the shortfall.
“The Simpsons” on Fox and “CSI” on CBS were two shows that cost more on Hulu.com and TV.com than for the original network broadcasts, according to Bloomberg. “The Simpsons” commands roughly $30 per thousand viewers on TV, analysts estimate. The show sold for twice as much on Hulu.com.
Part of the reason is rarity; another is recall. Online episodes have 37 seconds of ads versus nine minutes on TV. Viewers are said to be twice as likely to recall the Web ad as one during the same show on TV. The phenomenon currently is limited to higher rated shows. Disney, owner of ABC, Fox parent News Corp., and NBC Universal co-own Hulu.com.
Despite the apparent success of the broadcast-to-Web model, analysts see it cannibalizing the core revenue stream, which is TV. Around 90 percent of broadcast revenues come from advertising on TV. The Wall Street Journal noted that even though “The Simpsons” commanded a higher online fee per viewer, it made about one-third of what the TV spots generated. Broadcasters are consequently considering online subscription models, WSJ said.
— Deborah D. McAdams
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