Realscreen Summit 2016: A Takeaway - The Financial Model The Channels Are Leaving Behind

There was much talk at this year’s excellent Realscreen Summit about how networks must rebuild their brands to succeed in the emerging pay-for-content model of the online video ecosystem.

The evolution from cable channel to video brand is so complex and risky that whole server farms are dedicated to storing its analysis.

My focus in this post is on what’s at stake:

The leading U.S. cable channels that schedule docs and unscripted content enjoy huge footprints, as you can read below.
They earn a sizeable revenue stream for their services.
And because of the long-term nature of typical cable / satellite affiliate contracts, those earnings aren’t going to drop off a cliff.
Although weaker channels and brands are finding that cable operators are more willing to cut them loose.
Plus: The channels enjoy a dual revenue stream. Advertising sales add to the bounty.

There is a danger that channel execs will focus on brand-building via costly celebrity-led and even celebrity-directed documentary content at the expense of profitable, day-to-day unscripted programming.

It can’t be all about the tent poles.
Someone’s got to focus on the tent!

—————————–———————-———————-

SVOD EXPLAINED

Opportunities, Success Factors & Deal Terms
for Netflix, Amazon and VOD Platforms
Read More. Download Now: $29.95

—————————————————————————-

Subscribers

Following is a table from Nielsen that captures the subscriber base of a selection of U.S. channels.

The Monthly Sub Fee is an estimate from SNL Kagan for 2013.
You can do the math on the annual revenues.
I included ESPN as the Sub Fee leader, as well as the sub base of HBO and Showtime.
BTW, there are 116.4 Mn U.S. homes, and 99.6 Mn multichannel homes, down from 104.1 Mn year-to-year.

U.S. Networks Selection
Distrbution Jan ’15 vs Jan ’16
Esimated Monthly Sub Fees

					Monthly
	Jan ’15	Jan ’16	(000)	%	Sub Fee
OVATION	53,468	46,071	-7,397	-13.8%
WEATHER	97,328	88,084	-9,244	-9.5%	$ 0.13
SCIENCE	75,601	72,191	-3,410	-4.5%	$ 0.07
AM. HEROES	60,014	57,803	-2,211	-3.7%	$ 0.07
ESPN	94,530	91,405	-3,125	-3.3%	$ 5.54
TRAVEL	91,540	88,621	-2,919	-3.2%	$ 0.13
MTV	93,257	90,607	-2,650	-2.8%	$ 0.44
ANIMAL PLANET	94,280	91,603	-2,677	-2.8%	$ 0.11
SPIKE	93,491	90,907	-2,584	-2.8%	$ 0.32
OWN	81,600	79,375	-2,225	-2.7%	$ 0.18
MSNBC	94,645	92,076	-2,569	-2.7%	$ 0.23
BRAVO	92,310	89,824	-2,486	-2.7%	$ 0.24
TLC	95,110	92,549	-2,561	-2.7%	$ 0.20
VH1	92,669	90,200	-2,469	-2.7%	$ 0.21
CNBC	93,660	91,181	-2,479	-2.6%	$ 0.34
A&E	96,049	93,641	-2,408	-2.5%	$ 0.29
HGTV	95,697	93,429	-2,268	-2.4%	$ 0.16
FYI	70,731	69,058	-1,673	-2.4%	$ 0.11
FOX NEWS	94,708	92,487	-2,221	-2.3%	$ 0.94
BET	88,131	86,126	-2,005	-2.3%	$ 0.21
LIFETIME	95,998	93,842	-2,156	-2.2%	$ 0.32
CNN	96,309	94,147	-2,162	-2.2%	$ 0.59
DISCOVERY	96,596	94,456	-2,140	-2.2%	$ 0.40
HISTORY	96,147	94,018	-2,129	-2.2%	$ 0.26
CNN / HLN	97,194	95,168	-2,026	-2.1%	$ 0.18
FOOD	97,027	95,041	-1,986	-2.0%	$ 0.24
E!	94,351	92,452	-1,899	-2.0%	$ 0.13
BBC-AMERICA	78,413	76,867	-1,546	-2.0%	$ 0.07
DESTINATION	56,931	55,935	-996	-1.7%	$ 0.07
ID	86,004	85,062	-942	-1.1%	$ 0.09
OXYGEN	77,690	77,119	-571	-0.7%	$ 0.14
TRU TV	89,549	89,593	44	0.0%	$ 0.15
NAT GEO WILD	57,569	57,634	65	0.1%	$ 0.12
DISC. LIFE	46,478	46,609	131	0.3%	$ 0.07
SMITHSONIAN	33,302	34,066	764	2.3%	$ 0.11
NAT GEO CH	85,398	87,759	2,361	2.8%	$ 0.24
HBO	35,501	36,512	1,011	2.8%
COOKING	61,959	64,888	2,929	4.7%	$ 0.08
DIY NETWORK	58,407	61,195	2,788	4.8%	$ 0.10
VELOCITY	61,372	66,236	4,864	7.9%	$ 0.14
SHOWTIME	27,366	29,717	2,351	8.6%