The inability to initiate professional business plans has been the main reason for the lack of success of many European pay-TV channels, says a new report.
Some 150 channels across Europe have been forced to close in the last six years, costing investors more than £2 billion. Wasted investment in the UK alone is in the region of £300 to £450 million.
Pay-TV Business Planning, published by International Marketing Reports, claims that most pay channels have failed because the business models were not properly thought through and implemented.
“The basic mistakes made in planning pay-TV operations have been staggering,” said the report’s author, David Brown. “Obviously economic conditions in this industry are tough at the moment, but in many cases, channel operators are not giving themselves a chance because their costs are too high for the business models that they are following.”
One of the issues Brown touches on is the lack of focus with many TV channels seeking to garner income from advertising and subscriptions when a single revenue source would suffice. He also points out that costs can be kept down by running regular repeats and channels need to own content in order to create branding and generate cash through programme rights sales.
