Friday’s premiere of Joss Whedon’s “Dollhouse” bombed on TV, but was a hit on Hulu and in Apple’s iTunes store.
Doesn’t matter says, TV By The Numbers. Here’s their central argument, from a post titled “Why being a “hit” on iTunes doesn’t matter yet”:
I estimate that it took somewhere around 25,000 downloads for Dollhouse to hit the number one spot on iTunes in just over two days time. There is a lot of data, particularly from NBC, but from other sources I’ve seen as well, to corroborate that estimate. It’s not precise, of course, but it’s not a wild assed guess either. It’s in the right zip code, and the right neighbourhood, and if not on the right block, it isn’t far away.
Let’s say that a traditional TV broadcast network strives to have a $25 CPM for its commercial spots in prime time. In other words, it wants to sell its advertising at a rate of $25 per 1,000 people. Obviously scale matters, so in this 50,000 foot view example, if 10 million people watch a show, that means the network can sell each commercial spot for $250,000.
In a typical one hour show there are 16 minutes worth of commercials or 32 or so 30 second spots. By this simple 50,000 foot view, a show with 5 million viewers can sell each commercial for $125,000. Keep in mind, that with rare exception scripted shows with less than 5 million viewers on a broadcast network would get cancelled (though those same 5 million viewers on a cable network would make it a hit show!).
Because there is such a difference in scale, we can discount the price of commercial advertising down to even $100,000 per commercial for that show with 5 million viewers just to have a nice round number. With 32 commercial spots, it would generate around $3.2 million dollars in revenue.
If 25,000 downloaded a show from iTunes at $2.00 per download, that’s $50,000 in total revenue. Or one half of what the show would make for a single 30 second spot even at only 5 million viewers. And that assumes that all of the money goes back to the network, which of course isn’t the case — iTunes (Apple) gets a cut. Again, I’ve deliberately ignored many nuances and disclaimers here just for the purposes of keeping it simple. Adding all of that discussion and explanation back in just confuses things and doesn’t change the end result much. And the end result right now is simple. Watching television on television makes a lot more money — and I mean a lot more money — than Internet viewing of those same shows.