Are Licensing Fees or Subscriptions Better for Network TV Online?

Are licensing fees the best way for networks to syndicate their content, or should they be pursuing direct-to-consumer models? Usually, I’d say that licensing

Are licensing fees the best way for networks to syndicate their content, or should they be pursuing direct-to-consumer models?Usually, I’d say that licensing at the enterprise level is far more likely to be lucrative and profitable for most networks. But television writer and director Armando Iannucci makes an interesting case for the latter option in a recent article in the Guardian.My love of Iannucci’s work aside (and really, if you haven’t seen The Thick of It, go check it out on Hulu now), he has a point when it comes to the BBC. Long a bastion of reputable, state-supported programming, the channel was able to spread its British cultural exports around the world through licensing to other channels, like PBS in the US. (And thank God, for how else would I get to watch the entire MI-5 series?)But that’s the trouble with the model — international audiences are only able to view shows and episodes that networks think they’ll get enough of an audience for and that they are able to license (WNET in New York did a whole pledge drive around trying to get seasons 4 and 5 of MI-5).”The BBC would make a fortune if it ran as a subscription service abroad. It’s revered across the world, and rightly so,” Iannucci said on Twitter.”Money made from subscriptions abroad would fund even better programs at home and take pressure off falling license fee collection. … Having lived abroad, I know many people (expats and locals) who would pay to access the BBC abroad.”For those unfamiliar with the BBC model, UK citizens pay up to £145.50 in taxes to support the BBC, and there’s recent efforts to “decriminalize” that charge, which could cost the BBC up to £200 million in funding. The channel’s website, BBC iPlayer, has streaming video, but uses geo-IP technology so that it can only be accessed by devices in the UK — a curious model, indeed.However, the BBC’s director of strategy and digital, James Purnell, has said subscriptions would to “first- and second-class” license fee payers and cost £500 million to implement.”We think the overall system would be more expensive to run than the license fee, and we think that would be significantly worse than the current system,” Purnell added.Which says to me that the BBC is not ready for the organization-wide change it would need to implement such an innovative business model. Which is a good reason to not do something right now, but not a good reason to not ever do something that would benefit your business. Which is why I’ll spend this Friday talking about how design thinking and agile product development can help media organization deal with big hairy problems like this one.So stay tuned!

Share on facebook
Share on twitter
Share on linkedin
Share on email

Up Next

Don’t miss the latest subscription news. Sign up for updates now!

Search this site

Upcoming events

Keep ahead of your competition

Register now for our weekly subscription news round-up

  • This field is for validation purposes and should be left unchanged.