ranging from 5,000 to 250,000. “The break-even point is rather low,” said Ronson, “about 2,500 units.” A+E Networks (recently rebranded from AETN) has a library of 10,000 titles on DVD, and in 2011 put out 15 million DVDs. A+E Networks’ DVD sales are done directly through its own Web Store (which represents 25 percent of total sales), wholesale stores like Wal-Mart and “Incos” (Internet companies) like iTunes, Amazon, etc. Asked whether piracy is more problematic for DVD or digital, Ronson answered, “if fairly priced, piracy is not a big problem for either one.” Among the newest revenue-producing streams are the Web Channel outlets of the type pioneered by Google’s YouTube. The Inco has come out with 100 Web Channels with a total of 25 hours of daily original programming. The channels comprise 19 categories, including pet and animal (by FremantleMedia), fitness (by Lionsgate), wrestling (byWWE) and satire (by The Onion publications). YouTube gives content providers 55 percent of the ad revenues, after recouping the money advanced to producers. Content remains exclusive to YouTube for 18 months. So far, YouTube has advanced a total of $100 million to content providers. Each channel gets from $3 million to $5 million advances. Among the many ways of splitting content syndication “hair,” there is the so-called “interstitions,” where short programs (the type favored by mobile operators) are inserted between longer programs. A typical example of such a service is what Miami, Florida-based NewsProNet offers. The company produces two to three minute short-form programs to be inserted into TV stations’ news programs and one to two-minute clips for online TV channels. Finally, insome instances, a content owner can monetize the program soundtracks by placing them in platforms such as iTunes or Amazon, which happens to be a good business model for companies like the London-based Entertain Me Group, a production company that recently launched a distribution division for its music and documentary programs. station that acquired a few plays over several years allows the distributor to sell the same movies outside those plays to other outlets. What can be considered a new development — and it is not barter or product placement — is sponsorship, or selling to advertisers. As explained by Toronto, Canada-based TLN’s Aldo Di Felice, this latest development is used especially by German car manufacturer BMW, Nike and Gillette as ad-funded programming that is given to broadcasters for free (though Red Bull tries to sell such programming). Nike, for example, tends to fund documentaries that, at times, do not even show their brands. An example of ad-funded content business direct to consumer is New York City-based Screen Media’s Popcornflix. com, with 350 movies available for free and supported by advertising. Another aspect of the business that’s not to be underestimated is DVD. It still brings big numbers for a “dead business.” In 2011 the DVD business in the U.S. reached $18 billion. Even though some erosion is expected to start this year, it will nevertheless remain a robust market, in the view of Steve Ronson, EVP at New York City-based A+E Enterprises. The erosion is caused by the fact that single TV episodes and movies go digital rapidly; therefore, the U.S. studios are slowly reducing dependence on the packaging business, causing a drop in volume. “I see a great opportunity in the DVD business, especially if big studios are curbing their involvement,” said Ronson. A+E Networks Home Entertainment puts out some 200 new titles a year on DVD with quantity Ja n u a r y 2 0 1 2 (Continued from Page 24) It’s a Jungle Out There A+E’s Steve Ronson, Kate Winn
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