Newspaper companies dramatically expanded their Web video programs last year. But that won’t save most — if any — of their newspapers.
Web video service Brightcove says its average newspaper customer uploaded 638 videos per month in 2008, up from an average 186 videos per month in 2007. And viewers followed: The number of video player-loads on newspaper sites jumped to 964,000 per month in 2008, up from 169,000 per month in 2007.
This isn’t normalized across the Web, so it’s mostly representative of Brightcove’s growing newspaper-video business. But it should be directionally correct — we assume newspapers did do a lot more Web video last year than the year before. (Brightcove’s clients include 30 families of newspapers, such as the New York Times — and until late last year, the Wall Street Journal.)
Why are newspapers putting money into Web video? Probably a mix of the following:
- They think they have to.
- It’s fun and cool, like newspaper-owned TV stations were 15 years ago.
- It gives newspaper reporters a chance to be “TV” commentators.
- Publishers get a lot of money for video ads — often much higher CPMs than banner ads.
While online video might be a nice, even profitable side business for newspaper companies, it won’t solve their biggest problem: That online advertising, including video, can’t sustain their cost models. A newspaper’s Web video unit may be self-sustaining, but it will never be able to support the rest of the paper.
Let’s use the New York Times (NYT), for example. Say that Reuters‘ estimate is close: That it costs a bit more than $200 million to run the NYT’s newsroom each year. Hypothetically, at a $20 effective CPM — $40 CPM with 50% of video views getting ads, that would mean the Times would have to deliver 850 million (!) video views a month to make $200 million in revenue a year. (Never mind streaming costs, etc.)
Not happening any time soon: Brightcove says all of its newspaper customers — including the Times and 186 other newspaper sites — did 43 million streams last quarter, or about 14 million per month.
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