Does Anyone Care About The Business Of Live Events, Or Just The Traffic?

In the past 36 hours, I've seen 37 stories in my Google reader about the the MJ webcast and unless I missed it, not a single article talked about anything pertaining to the business side of live broadcasting. Every time a large webcast takes place on the Internet, the industry wants to speculate about the Internet breaking or failing in some way and everyone seems to want to cover the story only from an infrastructure angle.

While some seem to think it makes for great headlines by asking if the Internet will crash under the strain and want to imply some sort of doom and gloom from too much traffic, in reality, the titles of many of these articles should be seen for what they really are – a headline.

Does it really matter to any industry how much traffic is delivered if there is no business model behind it to sustain it? Sure, lots of traffic is great for the CDNs, good exposure for the companies that make the video platforms and some of the other vendors involved, but what about the content owner who is paying to make this happen? Over the years, I've done enough large-scale live events for many of the major portals including Yahoo!, MSN, MTV and VH-1 to know what live events truly cost to produce and they are not cheap. At a time when content owners are trying to create a sustainable online business, the industry only seems to be writing about traffic numbers for webcasts or how many Facebook updates took place.

What we should be talking and writing about is the costs associated with putting these events live on the web and the potential ways content owners can turn this into a business over time. How much money does any major newscaster lose during a one-off large scale live event? Are they trying to sell sponsorships during the event? Do they have any type of ad model specific to live events? Are they seeing any success at all when it comes to covering their costs? These are all questions we should be asking and more importantly having discussions about so we can try to figure out the business models to sustain these events. At some point, all of this technology boils down to a tool content owners need to use to sustain themselves in some way. Why is no one talking about that?

Instead, those who cover the industry are so caught up in the traffic numbers and the many ways they can turn those numbers into nothing more than a headline. Think to yourself how many articles you read on the MJ webcast and ask yourself if you learned anything different from all of those stories you read. I know I didn't. Nearly all of them simply said the Internet didn't break and reported the traffic numbers. Nothing wrong with reporting the traffic from an event, but there is a bigger story here that we should be discussing as an industry. There is a business somewhere behind the technology of online video, even for large scale live events.

This is what disappoints me about the industry sometimes. 2009 marks the fourteenth year since streaming was first used on the Internet. Fourteen years. There is more to this than infrastructure and when all you ever see people writing about after a large broadcast is stuff involving bandwidth, it makes it look like we have not progressed much as an industry. This industry needs to grow, we need content owners to be profitable and we need to be discussing how that is going to take place and what we can do to get there faster.

Related Posts:

- We Need To Remember, Online Video Is A Cost Center, Not A Profit Center

- Webcasting Large Entertainment Events Still Unprofitable

  • Sean

    Hi Dan, When reading this article and looking up at the logo of your blog: BusinessofVideo.com “The business behind the technology of online video”
    May I suggest that you lead by example and not write/rant about what others are not writing about? I look forward to your future articles which substantiate “The business behind the technology of online video”.

  • http://www.BusinessOfVideo.com Dan Rayburn

    Hi Sean, did you see the links in my post? I liked to articles I have already written like:
    – Webcasting Large Entertainment Events Still Unprofitable
    – We Need To Remember, Online Video Is A Cost Center, Not A Profit Center
    – We Should Care About YouTube’s Core Business, Not Their Market Share
    – Detailing Netflix’s Streaming Costs: Average Movie Costs Five Cents To Deliver
    – Digital HD Downloads Still Cost More Than DVDs
    all of which talk about the business side of all of this. Not to mention, if you do a quick search on my blog, you’ll find dozens and dozens of articles specifically talking about the business of the technology, that’s the purpose of the blog.

  • http://www.endavomedia.com Paul D Hamm

    Dan, I think you are making an excellent point here and I agree with you entirely. It’s time for the industry of “Live Events” and Online Video in general to shift the focus a little bit from “hey, look what we can deliver!” to actually creating successful business models from great content being delivered conveniently over the Internet to PCs, mobile phones, TV set tops, etc. If good and relevant content can be delivered effectively to targeted and tracked (especially niche) audiences, multiple business models can realized. We’re proving this out today – advertising, sponsorship, subscriptions, PPV live, affiliates, syndication. And it doesn’t have to be a one-size-fits-all model. Combinations of business models are very real and very attainable. Technology is what enables the delivery of high-quality content to many people over many platforms and devices, but it’s the business models (er, making money), at the end of the day, that’s the real story that will keep pushing our industry forward.

  • Troy Rinical

    Dan, you are absolutely dead on with this post. Yeah, nice to see what the traffic was from any event, but I read even more articles than your did on the Jackson webcast and not a single article asked anything about the business. Why? Does anyone stop to think about how content owners are losing money from events like this?
    If this was an enterprise webcast, the company would clearly be looking at their investment and measuring how they judge their success. This model should be applied to M&E webcasts as well, not just enterprise ones. Our enterprise customers ask these questions every day.
    I didn’t see a single article that asked any of these websites what their cost was to broadcast the event and I didn’t see any article that asked the many CDNs that delivered it how much revenue they got from it. No one seems to ask questions anymore, they just write what is in a press release. What about the costs and revenue? Why is no one talking about that?

  • Roger Matthias

    The hype behind the major media events is what drives a lot of the headlines, as a company you want that appeal of feeding vast amounts of viewers and saying “my system was’nt even breathing heavy” it’s all posturing to gain an attachment to the event thus bring legions of followers to the blogs, shame because the business of video seems to be more about the model than the technology.
    Dan you go to all these media tech summits and conventions, do these functions have a modicum of leaning towards the business side of these casting, or are these functions the same in scope as the sensational blog headlines.

  • http://www.BusinessOfVideo.com Dan Rayburn

    Hi Roger, actually, I don’t go to many conferences anymore as I don’t travel like I use to and also, many shows are now gone. We use to have a lot of video specific shows and conferences like Pulver’s VideoOnTheNet, Jupiter’s Web Video Summit, Contentinople’s Contentinomics, the iTVcon show and they are all gone now. I made a list of most of them over a year ago and looking at them now, many are no longer in operation:
    http://blog.streamingmedia.com/the_business_of_online_vi/2008/02/list-of-online.html
    So to answer your question, some of the events I go to are business focused, but I think that’s as a result of them being very focused. Summits that talk about only one aspect of this industry can do well as opposed to events that try to cover everything and are more generic. That’s the reason I haven’t been to an NAB show in over five years.

  • http://www.mediafool.com Daniel Broger

    Thanks for this post, Dan. However, big media relies on big events and cannot deal appropriately with something that is more of an ongoing discussion. Hence, I believe that talking about business models is just not within their scope. At best, they could come up with some numbers about the financial rather than traffic figures made of a big event (which would be very interesting). Too bad that none of the otherwise deep-digging tech bloggers offered a business angle on it.
    Cheers

  • http://www.ramprate.com Steve Lerner

    It seems like we’ve all been critical of this problem for over 10 years, but the problem never seems to go away… Much like people being obsessed with press releases from startups when it is very clear that they have no profit model and will fail… I wonder why…

  • http://www.fireeyemedia.com Kris Simmons

    Is it possible that this industry simply isn’t going to be what we all wanted or hoped it would be? I’ve been working with webcasting and streaming projects since 2000 and other than the occasional profitable project, I’m finding that most people who would even need a webcast either want it for free or don’t think they should have to pay more than a couple thousand dollars for it.
    I’ve pretty much decided to leave webcasting and streaming on the backburner and to only offer it when someone calls me to ask for it. This industry has been a huge drain on my financial and mental resources so the best thing has been to quit worrying about when people are going to wake up and realize this IS the future and that they need to start getting on board.
    I don’t know but maybe webcasting and streaming is like the old betamax tapes…a great idea and definitely top notch quality (for the time) but the general public never really grabbed hold. There are so many ways to communicate these days its possible that the window of opportunity for those of us wanting to make piles of money doing it has passed.
    Just my thoughts.

  • http://www.espinteractivesolutions.com/san-francisco-web-design.html San Francisco Web design

    great discussion i really enjoyed but have nothing to say people have already said a lot… agreed with Dan

  • LTO Tape

    love Dan’s writing… he always write when he has enough stuff to convince his readers.