Post by George WK Newman on Oct 9, 2009 15:40:56 GMT -5
October 4, 2009
Robert Seidman @ tvbythenumbers.com
tvbythenumbers.com/2009/10/04/more-fun-with-numbers-dollhouse-is-profitable-but-is-it-profitable-enough/29432
We read a lot of comments about how Dollhouse is profitable, even with low ratings, and with reports of a low budget of anywhere from $650K per episode to $1.3 million per episode, I don’t doubt it is profitable.
I tend to believe the costs are more towards the middle-to-high end of those estimates, but either way I do believe those claims that the show is profitable, even with tiny ratings.
It’s also true that if FOX, ran, say House reruns instead of Dollhouse that there wouldn’t be any ancillary DVD or International licensing revenue for the Fox/News Corp mothership (Dollhouse is produced by one of Fox’s studios).
In a world where Syfy’s Warehouse 13 reportedly has a budget of $2 million per episode, I have no doubts at all that Dollhouse can turn a profit, even with tiny ratings. But what I wondered is what is the relative opportunity cost versus even airing reruns that could perform better in the ratings?
What I did here was a very simple you-coulda-done-it-on-a-napkin model that looks at profits on a per episode basis if Dollhouse costs $1 million per episode and also if it only costs $650,000 per episode.
Then it looks both at a 1.0 adults 18-49 rating, and and a .8 rating. I also took a look at the revenue of a House rerun at adults 18-49 ratings of 1.3 and 1.2.
Below is a table followed by my conclusion and detail on the assumptions used:
Dollhouse if $1 million/episode cost 1.0 Rating 0.8 Rating
Ad Revenue $1,066,656 $853,312
International $400,000 $400,000
DVD $308,000 $308,000
itunes/Hulu $250,000 $250,000
Cost/episode $1,000,000 $1,000,000
Profit per episode $1,024,656 $811,312
Dollhouse if $650,000/episode cost 1.0 Rating 0.8 Rating
Ad Revenue $1,066,656 $853,312
International $400,000 $400,000
DVD $308,000 $308,000
itunes/Hulu $250,000 $250,000
Cost/episode $650,000 $650,000
Profit per episode $1,374,656 $1,161,312
House Rerun 1.3 rating 1.2 Rating
Ad Revenue $1,386,656 $1,280,000
Profit per episode $1,386,656 $1,280,000
-
Conclusion
The simple conclusion based on the assumptions of this model is House reruns are more profitable, even when baking in the ancillary revenue streams that exist for Dollhouse that do not exist for a House rerun. House reruns are more profitable assuming at least a 1.2 rating, even if Dollhouse has ancillary revenue and even if it only costs $650,000 per episode.
If Dollhouse costs a million per episode, rather than $650,000, the House rerun is a lot more profitable.
And whether the House rerun is merely a little more profitable rather than a lot more profitable, I’d still go with the House rerun, because why lower my networks primetime ratings average for something that makes less money — even if it’s only a little less?
If this model is correct within a range of Dollhouse being slightly less profitable than House to slightly more profitable than House, I still don’t think its worth lowering the averages over. Obviously if Dollhouse is more than marginally more profitable, even with tiny ratings, my feelings would be different.
ASSUMPTIONS
Advertising
For advertising I conservatively estimated (this isn’t completely pulled out of thin air) that a 1.5 adults 18-49 rating would make $50,000 per commercial spot, and that if a 1.5 rating made $50K than a 1.0 rating would make $33,333 (1.0/1.5*50,000) and that a .8 would make $26,666 (.8/1.5*$50K)
I believe the actual rates are probably a bit higher, but since I used the same method for House and Dollhouse, it’s still an apple-to-apples comparisons.
In both cases I assumed 16 minutes of national advertising per hour, for 32 total spots.
International Licensing
The best estimate I have is that the top shows in the US reportedly rake in $1 million per episode for their combined international licensing. Dollhouse isn’t anywhere near a top US show, so I used $400,000 per episode. Obviously if it’s a million dollars per episode, it changes things significantly. I think its a reasonable estimate based on the best available information I had. If you have better intel on Dollhouse international licensing, please feel free to post it here. If you prefer to stay anonymous, send it along.
DVD revenue
All we ever saw was that relative to other shows, Dollhouse season one didn’t sell all that well. In its first week of release it sold over 67,000 units and earned more than an estimated $1.8 million. Then it fell off the list we regularly monitor.
I bumped total revenue up to $5 million, but Fox’s studio doesn’t get 100% of the gross revenue. My guess is at best the studio sees about 66% of the revenue, but to be conservative in my assessment I bumped that up to 80% and gave the studio $4 million. Over 13 episodes that would be roughly $308,000 per episode. By this model, figure for every million extra you give the studio, it works out to about $77,000 per episode.
iTunes/Hulu
The $250,000 revenue per episode is my best estimate based on what I’ve been told. If you have better estimates, please feel free to share.
No incremental cost for House
This comparison assumes more or less a standard licensing for House, where FOX can air each episode up to 3 times (original plus 2 repeats) without incurring additional fees. For the purpose of this comparison I assumed there would be $0 incremental cost for airing a House repeat.
Not much/any revenue benefit for DVR viewers
A new episode of Dollhouse will certainly be more viewed on DVR than a repeat of House. By quite a bit. Unfortunately, despite FOX PR over last year’s DVR numbers, all the information we’ve ever seen leads us to believe there isn’t really any/much advertising revenue benefit for these viewers. Last year, when Dollhouse was part of the “remote free” limited commercial experiment, there was at least a little benefit because fewer people were fast-forwarding through the shorter commercial breaks. But that’s gone this year.
Product placement deals would benefit potentially from DVR viewing, but quick, off the top of your head, what’s the product placement in Dollhouse?
(I couldn’t think of any).
At any rate, I didn’t add any extra benefit for the DVR viewers in. But figure this. If Dollhouse got another .5 in 18-49 rating, and on average the commercials were viewed by 20% of the DVR viewers, it would theoretically add about another $110,000 per episode in revenue (if adds were sold that way, or they watched within 3 days).
The extra $110,000 per episode isn’t enough to change my overall view here, but I admit that it’s “not nothing” either.
I didn’t include it because that is improvement over the Live+SD viewing, which includes a chunk of the DVR viewing and for our purposes here, treated them as if they were live viewers (when they might have and in many cases did merely time shift by 20 minutes and skipped every commercial).
Since I didn’t subtract anything to account for the DVR viewers who watched the same night, I didn’t add any benefit back in for the ones who watched later on DVR.
Robert Seidman @ tvbythenumbers.com
tvbythenumbers.com/2009/10/04/more-fun-with-numbers-dollhouse-is-profitable-but-is-it-profitable-enough/29432
We read a lot of comments about how Dollhouse is profitable, even with low ratings, and with reports of a low budget of anywhere from $650K per episode to $1.3 million per episode, I don’t doubt it is profitable.
I tend to believe the costs are more towards the middle-to-high end of those estimates, but either way I do believe those claims that the show is profitable, even with tiny ratings.
It’s also true that if FOX, ran, say House reruns instead of Dollhouse that there wouldn’t be any ancillary DVD or International licensing revenue for the Fox/News Corp mothership (Dollhouse is produced by one of Fox’s studios).
In a world where Syfy’s Warehouse 13 reportedly has a budget of $2 million per episode, I have no doubts at all that Dollhouse can turn a profit, even with tiny ratings. But what I wondered is what is the relative opportunity cost versus even airing reruns that could perform better in the ratings?
What I did here was a very simple you-coulda-done-it-on-a-napkin model that looks at profits on a per episode basis if Dollhouse costs $1 million per episode and also if it only costs $650,000 per episode.
Then it looks both at a 1.0 adults 18-49 rating, and and a .8 rating. I also took a look at the revenue of a House rerun at adults 18-49 ratings of 1.3 and 1.2.
Below is a table followed by my conclusion and detail on the assumptions used:
Dollhouse if $1 million/episode cost 1.0 Rating 0.8 Rating
Ad Revenue $1,066,656 $853,312
International $400,000 $400,000
DVD $308,000 $308,000
itunes/Hulu $250,000 $250,000
Cost/episode $1,000,000 $1,000,000
Profit per episode $1,024,656 $811,312
Dollhouse if $650,000/episode cost 1.0 Rating 0.8 Rating
Ad Revenue $1,066,656 $853,312
International $400,000 $400,000
DVD $308,000 $308,000
itunes/Hulu $250,000 $250,000
Cost/episode $650,000 $650,000
Profit per episode $1,374,656 $1,161,312
House Rerun 1.3 rating 1.2 Rating
Ad Revenue $1,386,656 $1,280,000
Profit per episode $1,386,656 $1,280,000
-
Conclusion
The simple conclusion based on the assumptions of this model is House reruns are more profitable, even when baking in the ancillary revenue streams that exist for Dollhouse that do not exist for a House rerun. House reruns are more profitable assuming at least a 1.2 rating, even if Dollhouse has ancillary revenue and even if it only costs $650,000 per episode.
If Dollhouse costs a million per episode, rather than $650,000, the House rerun is a lot more profitable.
And whether the House rerun is merely a little more profitable rather than a lot more profitable, I’d still go with the House rerun, because why lower my networks primetime ratings average for something that makes less money — even if it’s only a little less?
If this model is correct within a range of Dollhouse being slightly less profitable than House to slightly more profitable than House, I still don’t think its worth lowering the averages over. Obviously if Dollhouse is more than marginally more profitable, even with tiny ratings, my feelings would be different.
ASSUMPTIONS
Advertising
For advertising I conservatively estimated (this isn’t completely pulled out of thin air) that a 1.5 adults 18-49 rating would make $50,000 per commercial spot, and that if a 1.5 rating made $50K than a 1.0 rating would make $33,333 (1.0/1.5*50,000) and that a .8 would make $26,666 (.8/1.5*$50K)
I believe the actual rates are probably a bit higher, but since I used the same method for House and Dollhouse, it’s still an apple-to-apples comparisons.
In both cases I assumed 16 minutes of national advertising per hour, for 32 total spots.
International Licensing
The best estimate I have is that the top shows in the US reportedly rake in $1 million per episode for their combined international licensing. Dollhouse isn’t anywhere near a top US show, so I used $400,000 per episode. Obviously if it’s a million dollars per episode, it changes things significantly. I think its a reasonable estimate based on the best available information I had. If you have better intel on Dollhouse international licensing, please feel free to post it here. If you prefer to stay anonymous, send it along.
DVD revenue
All we ever saw was that relative to other shows, Dollhouse season one didn’t sell all that well. In its first week of release it sold over 67,000 units and earned more than an estimated $1.8 million. Then it fell off the list we regularly monitor.
I bumped total revenue up to $5 million, but Fox’s studio doesn’t get 100% of the gross revenue. My guess is at best the studio sees about 66% of the revenue, but to be conservative in my assessment I bumped that up to 80% and gave the studio $4 million. Over 13 episodes that would be roughly $308,000 per episode. By this model, figure for every million extra you give the studio, it works out to about $77,000 per episode.
iTunes/Hulu
The $250,000 revenue per episode is my best estimate based on what I’ve been told. If you have better estimates, please feel free to share.
No incremental cost for House
This comparison assumes more or less a standard licensing for House, where FOX can air each episode up to 3 times (original plus 2 repeats) without incurring additional fees. For the purpose of this comparison I assumed there would be $0 incremental cost for airing a House repeat.
Not much/any revenue benefit for DVR viewers
A new episode of Dollhouse will certainly be more viewed on DVR than a repeat of House. By quite a bit. Unfortunately, despite FOX PR over last year’s DVR numbers, all the information we’ve ever seen leads us to believe there isn’t really any/much advertising revenue benefit for these viewers. Last year, when Dollhouse was part of the “remote free” limited commercial experiment, there was at least a little benefit because fewer people were fast-forwarding through the shorter commercial breaks. But that’s gone this year.
Product placement deals would benefit potentially from DVR viewing, but quick, off the top of your head, what’s the product placement in Dollhouse?
(I couldn’t think of any).
At any rate, I didn’t add any extra benefit for the DVR viewers in. But figure this. If Dollhouse got another .5 in 18-49 rating, and on average the commercials were viewed by 20% of the DVR viewers, it would theoretically add about another $110,000 per episode in revenue (if adds were sold that way, or they watched within 3 days).
The extra $110,000 per episode isn’t enough to change my overall view here, but I admit that it’s “not nothing” either.
I didn’t include it because that is improvement over the Live+SD viewing, which includes a chunk of the DVR viewing and for our purposes here, treated them as if they were live viewers (when they might have and in many cases did merely time shift by 20 minutes and skipped every commercial).
Since I didn’t subtract anything to account for the DVR viewers who watched the same night, I didn’t add any benefit back in for the ones who watched later on DVR.