In order to launch a Broadcast TV channel, you must first develop your content ideas simultaneously to your regulatory obligations, operational and facility budgets. You need to consider the costs of offices, studios, personnel, content, and much more. Particularly, you must consider the cost of content for your market; whether commissioning new; negotiating the rights to content as original production; previously viewed content (repeats/re-runs); or in the case of News the cost of newsgathering and delivery of studio based and location news coverage, plus Newswire services.
The production of Television content is extremely expensive, and you will need to be substantially ahead of yourself in content creation before you launch your television channel, otherwise you will simply run out of content. Pre-launch production is a significant up-front cost and burden to bare when you as yet have no incoming advertising revenues.
Next you need to consider your likely revenues. You must be prepared in your budgeting for the fact that you are not going to instantly acquire your target number of viewers. Depending on your targets will mean the difference between needing a year, two years or more to reach them. This means that for the period that your TV channel launch is in the immediate post-launch phase you will need to estimate your viewing numbers from a handful of audience up to your targets – This will NOT be a linear ramp of audience acquisition. It will in actual fact be a slow non-linear curve, and the rate of acquisition will very much depend on the nature of your target audience and the quality of your market research, along with the ability of your content to fulfil that markets desire for relevant, quality content.
For the AVTN.TV project, we developed a proprietary spread sheet system that allowed us to play ‘what ifs’ with all the parameters such as: audience conversion rates; audience ramp and growth curves; advertising rates by region; and time-of day and week ratings. The latter changes on a global basis from region to region. The model for TV viewing in Europe is different to APAC, Africa, LATAM, MENA, and North America. The accurate projection of daily, weekly, monthly and annual advertising rates involved approximately 3,500 calculations for a 4-year period, providing revenue and advertising rate projections.
Now you need to sell advertising, through up-fronts or by doing agency deals that promise to supply a steady trickle of advertising for your slots. You will most likely need representation, sizeable sales team, or combination of both. However, now you need to consider the fact that the up-fronts (your contract based on what you say your audience will be) versus reality; and then factor in the time-frame to confirm your audience reach for your advertising revenue calculations and in the absence of up-fronts, the time period until you get paid. This can take up to four months, though software to reduce this timeframe is available. If you under-perform your projections, you may find yourself re-funding money!
The BBC (which relies on the TV licence fee in the UK) has recently gained provisional approval to launch a new television Channel in Scotland, with confirmation pending at cost of £32m. Ofcom forecasts that it will attract only a small audience in the region of 1.65 -3.75% of viewers as a result of intense competition with other channels. This is a good demonstration of the considerations of reach versus audience yield or conversion for regional and national broadcast television channel launches, regardless of whether you may be considering OTT, IPTV, Digital Terrestrial Transmission (DTT), Cable or Satellite services.
While International or global service providers face the same issues in broadcast TV channel launch as regional and national providers, in general terms the cost of content generation does not rise proportionately with increased reach. Though, the cost of content generation may rise if you are delivering services with regional language differences, requiring over-dubbing or subtitling for language variations. While the increase in reach and cost of reach for international or global TV channel coverage will rise, the likely proportions of audience conversion from that reach are likely to exceed national coverage by some margin.
It is worth noting that given the high costs involved with delivering generic news, when France 24 initially launched, its costs overwhelmed revenues due to its restriction in broadcast reach to France, and in the volume of available audience that spoke French. It is therefore imperative that you consider the reach and audience conversion ratio of your channel early on in development, and certainly prior to contracting any of the high-cost elements involved in Broadcast TV Channel Launch.
Now you have a notion of whether your TV Channel stands to make money when launched, it is time to talk about the following potential list of considerations: Broadcast Licences, country of establishment, country of origin (particularly in light of Brexit); satellite, cable, DTT, ITPV and OTT distribution carriers, and whether you can deal direct with service providers or through a channel aggregation service provider; EPG listings (Electronic Programme Guide); LCN listings (Logical Channel Number); multiplexes; up-links/down-links for satellite; international distribution to cable head-ends via C-band satellite; Ku-band DTH (Direct-to-home); platforms; carriage agreement contracts; subtitles; audiovisual formats; retransmission fees; and the list goes on…