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The Rundown: The pivot to TV isn’t easy
In this week’s Rundown, we examine why digital publishers may not find quick profits in TV, why publishers are investing in Instagram Stories and what’s happened to Facebook’s Campbell Brown.
The pivot to TV will be hard
Over the past few years, top digital publishers such as BuzzFeed, Vox Media and Refinery29 have been building out entertainment divisions in an effort to create movies and TV shows. Some of this has been driven by the desire for more revenue, as the ability to create hit movies and TV shows can lead to streams of revenue that aren’t tied to digital advertising. And to these publishers’ credit, some have hired experienced entertainment folks to build these new businesses.
But as one veteran producer, who’s made dozens of TV shows and movies, told me recently: TV is a terrible business if you’re looking for quick profit. When asked how much it would cost to build a successful TV studio, he said, “$200 [million] to $300 million, to start.” Even if networks, streaming services and other content buyers are willing to fund productions in exchange for licenses, the reality is that most studios have to spend some of their own money to get a show made. And most shows need two or three seasons — or, in some cases, five seasons — to turn a healthy profit for the studio.
And that’s if you don’t sell an original show or movie to Netflix, which is increasingly fronting full production costs — and a bit “extra” on top, said another producer — to buy global distribution rights. In these cases, all a producer has is the margin. — Sahil Patel
What’s the (Instagram) Story?
Publishers widely acknowledge that there’s no easy replacement for Facebook referral traffic, but many of them see Instagram Stories as a promising growth area. What started out as a Snapchat knockoff has grown into a powerful traffic driver for some publishers. For some, Instagram Stories hasn’t just become the third-biggest source of referral traffic — in its best months for some publishers, it can drive more traffic than Facebook. Publishers are drawn to the format because it’s easy to update a Story that isn’t performing well, and the competition hasn’t yet gotten as fierce as the news feed has long been. Whether that stays true as publishers cast about for new referral sources remains to be seen. — Max Willens
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The post The Rundown: The pivot to TV isn’t easy appeared first on Digiday.
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