In calculating advertising revenues for a new TV Channel Launch, I recommend a conservative and cautious approach. It is advisable to consider a number of models that may be experienced by a TV channel after launch, and a ladder of incremental revenues to be realised as audience grows is the most realistic method of expressing these expectations.
Market size and available investment will be key factors in launch strategy and growth expectation. In calculating this audience reach is a key factor – this is the number of households that your TV channel will reach, not the total audience which is different again, and estimated by ratings measures such as BARB or Nielson (Ratings & Reach).
Adequate funding for the TV channel for a reasonable period after launch, until revenues grow to sustainable levels is an absolute must, and inadequate banking facilities post launch have brought down many new channels. It is worth aiming for a launching channel to be sustainable on 30% or less than those of your nearest competitors, and so where possible it should be a goal to identify the advertising rates of competitors, or at the very least market conditions. Presentation of like and unlike comparisons for your broadcast model would be advisable.
If investment is available and a market is strong enough, then a strategy based on economies of scale may be possible – The more markets broadcast presence is achieved in, the greater the potential revenue stream, while demands on average TV slot revenues vs. costs are significantly reduced. In Satellite and Cable broadcasting, while global coverage for satellite distribution may be achieved with a half-dozen C-band transponders, it is necessary to give consideration to the level of requirements for Ku-Band transponders to enable DTH (Direct-to-Home) distribution on a regional basis. DTH distribution will need careful consideration in parallel with TV platform access and EPG negotiation, with both being controlled by the same provider in a number of regions.
TV Advertising slots are calculated on a 30 second per slot or aggregate basis. The region or nation where you intend to broadcast from determines the conditions controlling the volume of advertising a channel may offer. In addition, subject matter such as news may also be accompanied with other conditions controlling terms for sponsorship of elements like weather.
In Television 30 second slot revenues may vary wildly between existing channels, from as low as £50 to £16,540 by region in the UK and from $50 to $400,000 in the US. A global channel or network may see a variety of rates dependent on the time of day in each time zone, with Breakfast and Dinner/Evening being coveted primetime ad periods.
Higher TV advertising rates tend to apply to premium entertainment programming and sport. It is also advisable to consider whether a channel’s feed will remain the same or vary in a regional or global model, as this will affect attractiveness to marketers. In a situation with a variety of models under consideration, choose the model that is most realistic to expectation, which may not be either the worst or best. Advertising may be calculated by market, satellite transponder, TV network, or TV Platform.
In parallel with identifying your market, audience demographic and service offerings, it is also necessary to identify which advertisers are most likely to find your channel or network attractive. The more specialist your market, the greater the necessity to determine the advertisers you are able to access. The world’s Top 100 Premium Brands should be your target market, unless your market is defined by language or other market narrowing topic, at which point research is required to determine who your own Top 100 target advertisers are.
If your project is in Radio, then revenues may again vary wildly, and further variation may occur between talk radio and music radio. Traditionally Radio advertising revenues are a fraction of those of TV Advertising, though Major Cities or Nationally available Radio Channels will attract higher rates. With a TV news channel it is possible to create a radio version from your audio feed with additional material to cover holes where televisual capabilities aren’t transferable, and this can now be achieved at relatively low cost, and with only a handful of additional personnel. Consideration of advertisers for radio is again important, given that certain products require a visual medium to advertise.
In the multi-media world we now live in, your TV or Radio channel will require support from online capabilities, and apps. Dependant on the nature of your channel and the digital media you support your TV or radio offerings with, further options to carry advertising exist, from static advert imprints to separate TV or audio adverts carried with streamed or downloadable programming.