Friday, January 27, 2006

Greedy S.O.B.'s

This is mostly aimed at the RIAA since the MPAA is complaining alot (yet).

Seems that for T.V. shows such as CSI and Lost make about $1.44 per episode from iTunes whereas they normally make $.57 for the advertising revenue for the show. I do not know if this includes production costs, but I can assume that if this is an apples to apples comparison, then regardless (assume $.40 per episode per viewer production cost....) the network is making a TON more money on downloads. So making the same assumptions on CD's and radio play for the RIAA, I can only make the assumption that their margin is much higher for their physical medium or no matter how much money they make they will still sue the customers. Seems awfully retarded. I think it is time for the distruction of the RIAA and let the labels work to sell their stuff. I am not likely to buy CDs because of my hatred for the RIAA. I would rather live in a music-less world then to pain those bastards.

I am a willing spender of money, but when I buy a CD and am punished by rootkits and various encryption schemes that destroy my experience, I have the right to take my money elsewhere. When they jack the prices of a 5 minute song to exceed that of a 30 to 60 minute TV show, I can do the same. My money can go to the TV networks instead!


Jay Heuer said...

Is that $.57 per episode or per viewing? Does it include terminal value (as in syndication)? The assumption has to be that the value of a show once available for download is close to 0, whereas a show that can only be seen with ads continues to generate cash...

Still the market will dictate a change... if the differential is so much higher, then somebody will see what absorbtion they will get at $1.50, since more people will be inclined to buy...

Also, don't forget DVDs, where there is a flagrant difference in profit/episode. iTunes has a very meager selection of videos right now, let's see what happens when that gets better and competition sets in.

Reverend0 said...

I believe it works out to $.57 per episode per viewing so there is an estimated 140 million people who are viewing CSI on a given night and the advertiser is willing to pay $4 million for a particular 30 sec spot.

I don't believe this takes in terminal value, just initial take. Although with DVD sales for TV through the roof, I would hazard a guess that the terminal value of shows is going to go down in general.

As for DVD's, I believe that it comes out to make less. The rough cost per episode works out to be the same or even less in the case of 30 minute episodes on DVD. For example, Season 1 CSI = $60 and Season 1 Star Trek TNG = $120 and Season 1 Simpsons = $22; each carries about 24 - 26 episodes. So the standard sets (CSI and the like work out to less than $2 an episode where as the premium sets work out to much more. This then asks whether DVD manufacturing and distribution is cheaper than an army of servers and some bandwidth?