Your Own TV Channel - Part 2 - The Money

Posted September 01, 2019

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In Part 1 of this essay, i explained that the technology was now here to allow anyone who wanted it, the abiity to start and run their own TV 'channel'.

The term TV Channel is perhaps a bit of an anachronism now.  A TV channel was once an FCC licensed station, like WCBS2 in New York. Then it also came to include a cable channel or two, like Oxygen or Current TV (two I know well).

But now, what does it mean?

Television is a business.  And a business is based on earning money.  If there is no business, there is no money.  Putting your videos on YouTube or Facebook or Instagram is not a business - it is a hobby. It may be a hobby that pays off from time to time for a very very few, but it is a hobby.

The business of television - indeed every media business - is based on a pretty simple premise.  You bring content into people's homes and someone pays you for the content or the access.

It used to be that there were barriers to entry into people's homes. If you ran a newspaper you had to get that paper phyically into people's homes. If you ran a cable channel, you had to be on the cable system that was wired into their homes. But the advent of the Internet blew al those barriers away.  With the Internet you can in theory get into some 3 billion homes for free any time you want.

In the last part, we talked about how the iPhone and smart phone gave you the tools to create the content to put in those homes at low cost.  The Internet gives you the access. Now, how do you put those two things together to make a functional business?

The basic rule of business is that to be profitable, you have to earn more revenue from the content than it costs ot make it and distribute it. With smartphone production, the cost of producing the content is slashed. 

Now, how do you put all this together to make a profit?

To create revenue, you have to have something to sell. 

Selling advertising is probably not going to work. The ad market is terribly compettivie and besides, Google and Facebook have pretty much eaten up all hte ad revenue. No one is going to buy ads on your site, odd are.

However technology giveth and technology taketh away. And what digital took away with the ad busienss it also gave in the form of click and buy.

If you have a product to sell - if you have a bakery, a granola business, make T shirts, handbags, jewelery - you name it - then you have a revenue source to marry to your content.

In fact, the fact that content and sales are to this day bifurcated strikes me as a bit crazy.  Why watch a home improvement show and then have to go to another store or another site to buy something?

It makes no sense.

Marry the two together and you have something viable and new. Watch a video about how to bake a pie and sell your cookbook at the same time.  The content creates the demeand and there is instant gratification.

Don't know how to bake a pie? Find someone who does and make a partnership.

Aggregate a few people whow can do this and you have a scalable business.

When you think about it, the old advertising model really no longer makes much sense.  Run an ad to convince someone to get in their car and drive to the store to buy something - when you can just click and buy right here and now.  

This, I think, is a much better model for a tv 'Channel'.

Of course, you have to create content that people will want to watch. 

That's another issue entirely.