April 02, 2012

Growing up in Bolivia, Alejandra Zannier loved watching TV dramas like Lost. She knew she wanted to be involved in the television industry, but when it came time to study at a university level, “that wasn’t really an option in Bolivia,” Zannier said.

Instead, she studied finance at Bolivian Private University. When a Fulbright Scholarship gave her the opportunity to pursue a master’s degree at Drexel, she knew the Television Management program in the Antoinette Westphal College of Media Arts & Design was for her.

“I wanted to be able to do research that combined finance with media,” Zannier said. “I didn’t think there would be a strong connection at first, but then when I started studying, I noticed I could pull from my background and apply financial knowledge to television, and I’m able to see some things that other people in my program who may come from humanities programs don’t.”

For her thesis, “Financial Analysis of Broadcast TV Programming,” Zannier looks at TV shows as individual products.

“The first thing I noticed when I began my program was that there were plenty of economic studies on entertainment, but finance—not so much,” Zannier said. “So I wanted to focus my studies on the revenue sources of TV.”

Zannier said while advertising is an obvious revenue generator for broadcasting companies, other forms of revenue per TV show include syndication, home video (Blu-Ray and DVD) and most recently, online platforms such as Netflix and Hulu.

“Some shows that are considered hits—such as reality shows like American Idol—don’t make much revenue later, because who’s going to buy a DVD of American Idol?” Zannier said. “Then there are shows that are cult hits, that not as many people watch but sell very well on home video.”

She said that while serialized dramas such as Mad Men often generate poor ratings, they excel in online platforms.

“It’s ideal to watch a serialized drama online,” Zannier said. “If you’re watching an episode and you’re so curious to know what’s going on, you don’t have to wait—you can just click to the next episode.”

In collecting and analyzing this data, Zannier said she wanted to find a way to optimize the overall revenue per show.

“The optimal thing to do would be to find a way to maximize all revenue sources and get the maximum profit from each TV show,” Zannier said. “In that case, it may mean that broadcasters may need to renew some shows that have lower ratings because they are going to generate more revenue in the future once they’re onto the DVD and online phases.”

She said platforms such as Netflix, which began phasing in original programming in eight-episode increments, are going to be the game-changer in TV finance.

“For kids now, they will probably grow up thinking that is how you watch TV. For us, it’s new,” Zannier said. “This will probably favor serialized dramas, and programmers at the networks are going to green light a lot more of them because they know they can generate more money in these new platforms. That’s going to have an effect not only on how revenue is generated, but how future generations experience TV.”

Read the original article here.