As broadcasters and television networks try to figure out their Internet strategy, the limited TV content that actually is online is making quite a pretty penny.
Online TV brought in $1.6 billion last year, up 34 percent from 2009, according to a data analysis by IHS. The largest contributor to that growth was a 65 percent rise in Internet TV advertising, which reached $719 million in 2010.
That’s surprising, since Big Media has been reluctant to throw its content online, thinking it would jeopardize their lucrative deals with cable providers. And the number of online television streams with ads rose by a measly 10 percent last year.
But some analysts say that the big players in online TV are actually making out pretty well.
“Even in this conflicted market, revenue was up, thanks to the proactive attitude of a handful of players, including Hulu and the CW Television Network, which have managed to expand revenue even as consumption growth has leveled out,“ said Dan Cryan, head broadband media analyst at IHS.
Hulu says it pocketed more than $200 million in ad revenue in 2010, doubling its 2009 intake. Though online TV views on Hulu rose just 10 percent, the company generated more revenue per stream thanks to greater advertiser interest in the Internet television market.
The TV website, which is rumored to be exploring the possibility of an initial public offering, led all online Internet video properties in terms of ads viewed with 1.2 billion last month, according to comScore.
Hulu displays a whopping 47 ads per viewer per month — not too shabby, considering the next biggest video ad player shows just 14 ads per month to its viewers.
Another success story of 2010 is the CW’s online TV site. That website grew by 50 percent last year, but its revenue soared a whopping 300 percent to $16.5 million. That’s because it sold 23 ads per show, on average, IHS noted.
With those kinds of numbers, broadcasters could be doing more to support a business that is potentially a much larger source of revenue, Cryan said. TV networks rarely promote on air the fact that their shows can be viewed online.
“Consequently, broadcasters in the United States are at risk of ceding territory to Netflix as the go-to destination for television on the Internet,“ Cryan noted