Who Has the Best Economics in Convergent TV?

Four big questions re: TV’s business model:
1) What forms of entertainment generate the highest revenue per hour?
2) What forms of TV content have the highest revenue per hour?
3) Why is revenue per hour important for the TV industry?
4) What TV revenue per hour share comes from advertising vs. subscriptions?

Big question #1: What forms of entertainment generate the highest revenue per hour?

Revenue per hour by entertainment type, according to Doug Shapiro:
1) Video (TV + digital) – $0.41
2) Gaming – $0.303) Audio – $0.15

Big question #2: What forms of TV content have the highest revenue per hour?

Revenue per hour by TV content type, according to SVB MoffettNathanson:
1) Linear TV – $0.57
2) Peacock – $0.42
3) WarnerBros Discovery- $0.36
4) Hulu – $0.31
5) Disney+ – $0.28
6) Netflix – $0.27

Keep in mind: Even within each content type, there are major differences.  For example, NFL football generates 417% more revenue/hour than linear TV on average.

Advertising revenue per viewer/hour:
1) NFL regular season (2021) – $2.95
2) Broadcast primetime (2021) – $2.46
3) Facebook (2019) – $0.60
4) Instagram (2019) – $0.43
5) YouTube (2019) – $0.27
6) Roblox (2021) – $0.07
7) Roku (2021) – $0.03
8) Vizio (2021) – $0.02

Big question #3: Why is revenue per hour important for the TV industry?

Quick answer: Time spent with convergent TV (linear + streaming) is flat.  In fact, between 2010 and 2025, the average time we spend watching convergent TV is estimated to grow by only 3 minutes (↑ 1%).  If consumption is flat, the only way to increase revenue is to generate more per hour.

FYI: My new book contains over 60 charts, such as the one above.

Quote from Doug Shapiro – Former Chief Strategy Officer @ Turner Broadcasting:

“The reason that monetization is the single most important metric in film and TV is because, in the U.S., long form video consumption is not going up. (This includes traditional linear video and streaming of professionally produced content, but excludes short form like YouTube and TikTok)…If consumption isn’t really growing, then the only way revenue can go up is if monetization increases. One problem, however, is that consumption is shifting to streaming from traditional and streaming monetizes at a much lower rate.”

Big question #4: What TV revenue per hour share comes from advertising vs. subscriptions?

Revenue per hour for linear TV by source (% of total):
1) Subscription revenue – $0.33 (58%)
2) Advertising revenue – $0.24 (42%)

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