Her Professor!
I hope your revenue numbers are way off, but me thinks we're in troubled waters until either (1) iNEXTV can increase ad rates significantly and/or (2) they somehow reduce the cost to distribute content by a large factor.
Using your numbers, my distribution cost model (which does not even include production costs, just bandwidth/distribution) returns these very ugly numbers:
Content Distribution Cost (per GB): $15.00 (source: Ampex)
Daily Distribution Load (seconds): 1,440,000,000 (8 million views * 3 minutes per view * 60)
Daily Broadband Cost (10% of load): $337,500
Daily Narrowband Cost (90% of load): $1,063,125
Daily Total Content Distribution Cost: $1,400,625
Pretty dismal, her doctor! Using your revenue numbers, weekly revenues wouldn't even cover daily costs! Perhaps that's why Bramson pre-announced another year of losses in January!
Given the $15/GB distribution cost figure from Ampex, and the 10% broadband, 90% narrowband breakdown, my model tells me that iNEXTV must obtain 17.5 cents of ad revenue PER STREAM just to break even!
Perhaps this explains why iNEXTV is attempting to increase the quality of their content-- in order to justify higher ad rates. I can only hope that Akamai will lower their distribution prices in the future, because $15/GB simply makes it too hard to make a profit-- even when the benefits of ITG (BB streams at 160KB, not 300KB) are already in place! Using your revenue numbers, iNEXTV needs a much lower distribution rate ($2.45/GB) just to break even!
This Internut streaming business is a very tough nut to crack! |
