North American Network Operators Group
Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical

Re: Network end users to pull down 2 gigabytes a day, continuously?

  • From: Mikael Abrahamsson
  • Date: Sat Jan 13 06:53:29 2007

On Sat, 13 Jan 2007, Marshall Eubanks wrote:

For the US, an analysis by Kenneth Wilbur
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885465 , table 1, from this recent meeting in DC
http://www.web.virginia.edu/media/agenda.html

Couldn't read the PDFs so I'll just go from your below figures:

shows that the cost per thousand per ad (the CPM) averaged over 5 networks and all nights of the week, was $ 24 +- 9; these
are 1/2 minute ads. The mean ad level per half-hour is 5.15 minutes, so that's 10.3 x $ 24 or $ 247 / hour / 1000. This is for the evening; rates and audiences at other times or less. So, for a 1/2 hour evening show, on average the VOD would need to cost at least $ 0.12 US to re-coup the ad revenues. Popular shows get a higher CPM, so they would cost more. The Wilbur paper and some of the other papers at this conference present a lot of breakdown of these sorts of statistics, if you are interested.

Thanks for the figures. So basically if we can encode a 23 minute show (30 minutes minus ads) into a gig of traffic the network (precomputed HD 1080i with high VBR) cost would be around $0.2 (figure from my previous email, on margin) and pay $0.2 to the content owner, they would make the same amount of money as they do now? So basically the marginal cost of this service would be around $0.4-0.5 per show, and double that for a 45 minute episode (current 1 hour show format)?

So question becomes whether people might be inclined to pay $1 to watch an adfree TV show? If they're paying $1.99 to iTunes for the actual download right now, they might be willing to pay $0.99 to watch it over VoD?

As you said, of course this would take enormous amount of time and effort to convince the content owners of this model. Wonder if ISPs would be interested at these levels, that's also a good question.

--
Mikael Abrahamsson    email: [email protected]