Being over-the-top and going “over-the-top” are two entirely different things. Donald Trump might learn that the hard way.
Next to the actual election, the most intriguing thing about Trump is what he plans to do if he loses. The rumor mill suggests that the Republican presidential candidate is interested in launching a right-leaning TV network. Trump has denied these claims, stating that he’s only interested in winning the election, but it’s hard to believe that Trump TV is not on his radar when his campaign is doing its own live programming on Facebook.
To be sure, Trump couldn’t launch a traditional cable network even if he wanted to — it’s incredibly time-consuming and expensive. A streaming video app, a so-called over-the-top service, requires a lot less time and money. That doesn’t mean that Trump would be able to turn Trump TV into a profitable business venture.
The technology is more accessible
Plenty of companies now offer the ability for a media company to build and launch streaming video apps.
“You don’t have to wait six months; you can be live in two weeks,” said Mike Green, vp of marketing and business development for media at Brightcove. “It’s so much easier than it used to be where you would be planning and building forever.”
Brightcove works with the ad-supported movie streaming site Popcornflix and niche subscription streaming platform Acorn TV, which today has roughly 390,000 subscribers. The company offers a product called OTT Flow, which handles a lot of the technical aspects of a streaming video service including content management, subscriber management and billing, and app development. Brightcove charges a flat platform fee that ranges between $5,000 and $15,000 per month depending on the client’s business model.
A subscription streaming service, which Trump would have to do for obvious reasons, is at the top of that range. Here, Brightcove would also charge between 10 cents and $1 per month per subscriber based on the scale of the streaming service. (More subscribers require companies to buy more bandwidth from one or multiple content-delivery networks like Akamai.)
This means if a Trump-owned streaming network can attract 1 million subscribers, it would cost $12.2 million per year, at minimum, on the tech alone.
Those are not the only costs, however
Among the absolute truths in the video business is this: If you build it, there is no guarantee that they — the audience — will come. Verizon, for instance, has spent millions of dollars marketing its Go90 mobile video service, and it has almost no audience. In fact, many Go90 content partners believe Verizon hasn’t spent enough on marketing.
To be fair, Trump has proven to be quite capable in drawing crowds at rallies and on TV without spending a dime on marketing. If he can convert even a percentage of his 11.8 million Facebook fans or 12.8 million Twitter followers, then he has a chance of building an audience without running traditional customer-acquisition campaigns.
“If nothing else, he’s demonstrated he knows how to play the media,” said Alan Wolk, TV analyst and consultant at Toad Stool Consultants. “He wouldn’t have to spend a whole lot marketing it because he’d get a ton of free press and additional buzz from his own social feeds.”
That said, a streaming service also requires content, which comes with its own costs. Trump would have to decide what kind of streaming company Trump TV would be. Would he follow in the footsteps of Fox News and launch a 24-hour news network? With his background in reality TV, would he consider making more reality TV shows? Would he license reruns of older shows that his audience might enjoy?
All of those things cost millions of dollars, and that’s not even considering the fact that it’s incredibly unlikely that Donald Trump himself would have the time to appear on all of the programming. This means finding other talent and surrogates to fill the airspace, and some of them don’t come cheap, either. Fox News pays Bill O’Reilly $20 million a year, according to The Hollywood Reporter. If he wanted to poach Sean Hannity, he would have to wait until 2020, when his contract runs out, according to The Wall Street Journal. There are also costs in maintaining a studio set and off-screen employees.
Glenn Beck is both a model and a warning
In 2011, Glenn Beck launched an online-only streaming video network as part of his media company, The Blaze. By September 2012, Beck said The Blaze had 300,000 subscribers paying $10 per month. Today, it’s estimated that The Blaze has half the number of digital subscribers as the network is now also available in 13 million cable households.
Trump arguably has a higher profile than Beck did during his peak. But as BuzzFeed reports, while Trump supporters would welcome a Trump TV, most are not willing to pay for it. (Of the 41 Trump supporters BuzzFeed spoke to, only eight said they would pay for any kind of Trump offering.)
Let’s say Trump TV’s total expenses end up being 10 percent of what Fox News spends annually. (According to media research firm SNL Kagan, Fox News was projected to spend $828 million in 2015.) For Trump TV to break even at $83 million in annual expenses, the streaming service would need just under 692,000 subscribers paying $10 per month. Again, that’s just to break even.
“When Trump and Roger Ailes were buds, there was a much better chance, because Ailes knew the day-to-day,” said Wolk. “He knew how to run a network, which is a very complicated thing. Trump doesn’t have anybody. He has his son-in-law who sort of runs a weekly newspaper.”
Well, there’s always the Oval Office.
Image by Matt Fraher
More in Media
Adalytics Research asks, ‘Are YouTube advertisers inadvertently harvesting data from millions of children?’
Publishers’ Q2 earnings reveal digital advertising is still in a tight spot, but digital subscriptions are picking up steam.
Experts reflect how the failures of social media and online advertising can help the industry improve the next era of innovation.
Ad position: web_bfu