2. TOWARDS WEB TV…
• Shift of the audience from traditional to new TV
• Increase of Internet broadband connections
• Media integration process
Web TV = open online video distribution
over unicast or P2P protocols
3. RESEARCH QUESTION
What are the business models that allow to
generate revenues from web TV? How are they
shaped according to the strategic objectives?
Is web TV a sustainable business in the long run?
Is there any theory that supports (or denies) this
argument?
4. RESEARCH METHODS
• Top 200 websites (Unique Visitors) for online video distribution,
either of user generated or professionally-produced content
• 44 variables analyzed for each website: features, business
model, content licensing, uploading and privacy regimes
• Accessible from Italy
• Language: italian and/or english
• 2 on-demand or 1 live channels (at least)
• Self-organizing maps and k-means algorithms cluster analysis;
two-step clustering
5. MAIN FINDINGS…
Two primary variables determine the business strategy of a
web TV:
• Business model
• Type of content
Those two variables are inter-dependent, and the choice is
also related to the core business of the operator.
Then, some secondary variables allow the web TV to
differentiate from competitors:
• The range of VOD channels
• The amount of live content
• The role of the community
• The type of advertising
7. BUSINESS MODELS
• B2c premium model sale of the contents (pay-per-view or
with subscription), with marginal revenues from advertising
• B2c ad-based model banner, pre-roll, overlay, ad-funded
content
• B2c mixed premium + “freemium”, ad-revenues sharing,
• CRM-based model communication and interaction, both
internal and external
• Free model self-financing and fund-raising
• B2b model service, solutions and content providers
8. BUSINESS MODELS
PA – subscription PA – subscription
PA - PayPerView
PA - PayPerView
PA - free with advertisement
PA - free with advertisement
PA - free (no advertisement)
PA - free (no advertisement)
PA – donation
PA – donation
0%
50% FE - Operator - Broadcaster and
0%
100% Local TV
FE - both produced and UG content FE - Operator - News and 50%
FE - only professionally-produced content magazines 100%
FE - only UGC FE - Operator - On-line video
company
FE - Operator - PA and other
companies
100%
90%
80% PA – donation
70% PA - free (no advertisement)
60% FE - only UGC PA - free with advertisement
50% PA - PayPerView
40% 66%
PA – subscription
30% FE - only professionally-
20% produced content
10%
0% FE - both produced and
UG content
5%
14% 12%
3%
9. STRATEGIC ISSUES
Pure strategies
Pure players ad-based,
integration of premium
contents, b2b market
Portfolio strategies
Web editors ad-based
with premium sections
Multichannel/portfolio
strategies
Other media ad-based
Multichannel strategies
Broadcasters ad-based
and premium model
CRM strategies
PA and companies free
10. MONEY???
US online video ad
spending in 2011:
• $4,309 mln
REVENUES • 9.8% of total
• Pay-per-view for VOD online ad spending
• Subscription Source: eMarketer
• Donation
• Advertising (banner,
Google Ads, embedded video)
OPERATING COSTS
• Production, acquisition,
or digitalization
• Storage
• Publishing and distribution
11. WEB TV’S LONG TAIL
“Forget squeezing millions from a few megahits at the top
of the charts. The future of entertainment is in the millions
of niche markets at the shallow end of the bitstream.”
Anderson, C. (2006). The long tail: why the future of business is
selling less of more.
12. WEB TV: STRENGHTS & WEAKNESSES
Strengths Weaknesses
Multi-channel Loss of control
Content
(niches) over contents
Ad-hoc contents DRM systems
UGC Lack of visibility
Personalization
Interactivity
Accessibility The “logic of the
Economics Targeted free”
advertising Ad skipping
Undefined
business model
13. IN CONCLUSION…
• The current context is highly scattered, given the high accessibility
to the market: webcasters shape the business model according to
different strategic objectives, which are basically related to the core
business of the operator and to the type of content. Either a clear
definition of business models or innovative ones are needed.
• The majority of money for web TV currently comes from
advertising. The free-logic of the Internet does not allow to rely on
premium services (subscription and pay-per-view), but webcasters
should find the way to monetize by increasing the value of the
offering or enhance the involvement of the communities (e.g.
advertising revenues sharing, UGC, self-financing).
• Internet overcomes distribution constraints and limited offering
and makes possible even to the smallest business to generate
revenues reaching the market niches: the long tail theory explains
the reason for the growth and the long-term sustainability of web TV
business.
