Friday, November 13, 2009

Controlled circulation TV

Michael Prentice, a columnist in the Ottawa Business Journal, draws an analogy with newspaper-carried controlled circulation magazines to illuminate the current confusing battle between TV networks and cable companies over who pays what to whom. (You will probably have seen the battling full-page newspaper ads and TV commercials that shed more heat than light.)

Prentice puts it succinctly that
"You end up paying CTV to deliver CTV's product to CTV's customers? Surely it should be the other way around?"
For years, TV companies were only too happy for cable companies to deliver their signals at no cost. More viewers meant higher advertising rates for the TV companies. They still do.
An example of how things usually work, only in the print realm: Ottawa Magazine, a glossy periodical, pays the Ottawa Citizen thousands per issue to distribute the magazine free with the newspaper. This represents added value for Citizen readers, for which the Citizen gets extra revenue. Yet Ottawa Magazine finds the cost worthwhile since it's cheaper than using Canada Post, says publisher Dianne Wing.


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