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NBC.com set to transfer wealth from local TV affiliates 6/27/08

Posted by Steve Boriss in Local affiliates, NetworkTV.
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Reuters quotes NBC TV Network President John Eck, “Next year the NBC.com service will generate tens of millions of dollars” in revenue “in a business that didn’t exist” a few years ago.

Where is this new found revenue coming from? Subscription fees? No. More spending from current advertisers? Seems an unlikely prediction in this economy. How about new advertisers, like the micro-advertisers Google has found in its keyword searches? That doesn’t seem likely either. In fact, the only reasonable source of large revenue seems to be a portion of the ad budgets of prime time advertisers, as more and more programs are downloaded or viewed on the web, bypassing local TV affiliates. Over time, there will be fewer and fewer viewers watching local TV for prime time programming, squeezing local TV revenues, while the networks no longer have to share prime time ad inventory with them. For the networks, this may be a business that didn’t exist a few years ago, but for local affiliates it will ultimately be a business that once did.

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