Here’s a tale of time spent on two media, according to Guy Tasaka, chief digital officer at Calkins Digital:
Newspaper consumption has gone from 40 minutes per day per person in 2008 to about 15 minutes at the beginning of this year
Since 2014 time spent watching Over-the-Top or OTT video has gone from virtually zero to about an hour an a half—and it’s projected to be two hours and 42 minutes per day per person by 2020.
Any questions on why Calkins Digital parent Calkins Media is betting big on OTT even as it continues to operate print and digital newspapers?
Calkins’ OTT initiative was recognized at the Mega-Conference Feb. 24 with the second annual Mega-Innovation Award. Judges praised it for its emphasis on public service, the quality of video offered—and for a business model that commands premium ad pricing.
And as Randy Bennett, the executive director/external relations for the University of Florida College of Journalism and Communications who was the award’s final judge, put it: Calkins’ OTT appeal to the “coveted 18- to 34-year-old demographic is sure to be a model for others in media.”
Launched at its Bucks County Courier Times in eastern Pennsylvania—with channels soon to follow drawing from its Burlington County Times in New Jersey and its Doylestown, Pa. paper The Intelligencer—Calkins’ OTT streaming video channel is a 24-hour, seven-day operation, “a digital TV station for 2017,” as Jake Volcsko, Calkin’s director of digital media and marketing, describes it.
OTT “linear TV,” television that is always on, has some big advantages over video on demand (VOD). In presentations for the Mega-Innovation Award and during the conference, Calkins executives drew this revenue contrast:
Consider a VOD operation with 100,000 monthly video views. VOD is likely to get $25 CPM that, even if 100% sold out every month, brings in just $3,000 annually.
On the other hand, linear TV offers the possibility of selling 280,320 spots annually, figuring 8 minutes of ad spots for every half-hour of video. If they sell at an average of just $5 a spot—Calkins charges a flat price per spot rather than by CPM—the revenue potential is $4.1 million annually.
“Linear TV preserves the legacy pricing model. It’s just spots 30 (seconds)s and 60s,” said Guy Tasaka, Calkins Digital’s chief digital officer. “And legacy TV sales reps can sell it.”
Calkins OTT is getting broadcast-like viewing as well, with the average user watching nine hours a week, Volcsko said.
Lessons from Calkins rollout of OTT
Think small—even if you aren’t. Tasaka: “Try to create quality video as inexpensively as you can, because the audience and advertisers are going to come slower than you think. Doing it inexpensively will buy you runway while the audience gets going.”
OTT is hard. Calkins took more than a year to plan its launch. OTT can be costly. Broadband has a hard and unavoidable cost.
You’ll have a difficult but not insurmountable third-party content acquisition process because traditional syndicators, said Tasaka, don’t yet really know how to participate in OTT.