CurrentTV

THE NEW SCHOOL UNIVERSITY | TYLER BABER | TIFFANY JACKSON | SOFYA YAMPOLSKY

overview analysis

+ recommendations

OVERVIEW | BUSINESS PLAN | ANALYSIS | RECOMMENDATIONS

Overview Video Pod
Click to view an introduction to Current,
created and produced by the team.


general information + Media Segment: Television Broadcasting/Online Content
customers
Analysis Target: Current Media

Current Media is an independent media company founded in 2005 by former U.S. Vice President Al Gore and Joel Hyatt. Current
value chain
Media operates a television network and website that feature original internally developed programming as well as content created by
viewers/users. Programming and viewer-created content is generally news and culture related.
business + General Information:
product model
Current Media operates a television network and website distributing original and acquired programming as well as viewer-created
original content. Viewers can post videos to the Current.TV website. Viewer-posted videos are ranked and commented on by the
revenue model community, with popular videos more likely to be broadcast through the Current TV network. Current Media is aimed at the 18-34 year-
old demographic and styled its viewer-participation approach in an effort to address this demographic’s habits and demands. The
Current TV network is available in the United States, Canada, United Kingdom, Ireland, Italy through affiliates such as DirecTV,
Comcast, EchoStar, Time Warner, AT&T, BSkyB, Virgin Media, Sky Italia, and to Canada through a partnership with the CBC. The
sales model Current TV network reaches more than 50 million households worldwide, and Current Media derives most of its revenue from television
and web advertising and from affiliate fees paid by cable and satellite providers based on the number of subscriber households.

sources Customers:

The Current TV network reaches over 50 million households, and the Current.TV website has an Alexa ranking in the top 5000 sites in
the world. Current Media markets its network and website to the 18-34 year-old demographic and encourages viewer participation by
allowing site users to create profiles, post original content, comment on other posts, and rank programming. Viewers are also invited to
take part in contests, including contests to create advertising messages for advertisers and post the messages on the website.


general information +
customers

value chain

business +
product model

revenue model

sales model

sources


general information + Current Media's Place in the Larger Industry Value Chain
customers
Current Media falls within three industry value chains: the TV network chain, the cable/satellite TV provider chain, and the Internet
value chain.
value chain Current Media's television network is in many ways similar to the traditional value chain for cable- and satellite-television networks,
acquiring, producing, and distributing an increasing percentage of its content according to the traditional models. The viewer-controlled
aspect of Current Media's value chain in some ways points toward emerging trends in the traditional television network value chain, as
business + more networks ﬁnd ways to make content available through the Web or encourage viewers to comment on or provide new content using
product model social media technologies. While Current Media's initial approach was to put as much emphasis on its website as its television network,
and to derive most of its television content from viewer videos posted on the website, the company was not able to effectively translate
this approach to increased revenue and has begun to follow the traditional industry value chain more closely.
revenue model
As an independent television network distributed internationally through cable- and satellite-television providers, Current Media ﬁts into the
cable/satellite provider value chain as a content source to be acquired and distributed by providers. Cable and satellite providers pay a fee
Current Media to distribute the network's content to subscriber households.
sales model
Because much of its website content is posted by users, Current.TV is largely a content distributor that connects web users to content
produced for its site by other users through Internet Service Providers.
sources


general information + Business/Product Model:
customers
Current Media’s business model is built upon a goal of incorporating viewer participation into television programming and web content
production. CurrentTV obtains its media content through three means, and distributes it on two platforms—web and broadcast.
value chain First, by taking advantage of the trend in crowdsourcing, CurrentTV solicits and collects viewer-created video content (known as VC2)
on its website. This content is available for free on the site and, until recently it also formed approximately 25% of its televised
broadcast1,2,. Users whose short format videos, called Pods, are selected for broadcast on the Current TV network can be eligible for
business + payment up to $10,000. In addition to encouraging viewers to create programming content, Current Media also has partnerships with
product model sponsors that encourage users to make Viewer-Created Ad Messages (VCAMs), with sponsors, producers, and site viewers selecting
VCAMs to be aired on the television network in exchange for payment or prizes for the creator.

revenue model Current Media also produces its own original news, documentary, and entertainment programming, using in-house staff of hosts,
producers, editors, critics, journalists, and other traditional television programming staff. Some of Current’s most popular original
programming content include the Rotten Tomatoes Show, a movie review show that airs viewer reviews posted on Current.TV and the
Rotten Tomatoes ﬁlm review aggregation website, and SuperNews, an animated comedy program. Current TV’s news journalism and
sales model
documentary content rose to national attention when in March of 2009 two American Vanguard journalists, Euna Lee and Laura Ling,
were detained for allegedly crossing the North Korea border while shooting a piece in China. They were found guilty of “hostile act” and
sentenced to twelve years in forced labor camp, and were released and pardoned after a visit from former President Bill Clinton.
sources Current recently announced it will begin acquiring content from outside producers3.

In addition to its video news content, Current allows its site users to aggregate online-print news and rank it in a format similar to
Digg.com. This allows the website to augment the televised broadcast and generate additional value to the viewers and users. The
Current.TV site is broken up by topic and by group, allowing for online community building and participation.


general information + Revenue Model:
customers
Current Media's revenue comes from affiliate fees and advertising. Current Media's television station, Current TV, receives afflliate fees
on distribution agreements with cable and satellite providers per subscriber household. Current TV has distribution agreements with all
cable and satellite television providers in the United States, United Kingdom, Ireland, Italy, and Canada and reaches an estimated 70
value chain
million subscriber households4. Current Media reported that affiliate fees accounted for over 80% of the company's revenue for 20075.

Current Media also receives advertising revenue for ads displayed on the television station and website. In 2007 the company reported
business + that its television network had revenue of approximately $64 million and losses of $9.9 million6.
product model
In January 2008 Current Media filed for a $100 million Initial Public Offering with the Securities and Exchange Commission, but
withdrew the filing in April 2009 posting a net loss of $7.5 million for the first quarter of 20087. The company has announced no plans
revenue model regarding whether they will pursue an IPO in the future.

Current Media is exploring ways to translate the website's API into a revenue stream by sourcing user-generated content to other
media companies and websites8.
sales model

sources


general information + Sales Model:
customers
Current Media derived approximately 20% of its revenue from advertising in 2007 and the ﬁrst 3 months of 2008 (the last time such
information was reported), and a small core group of advertisers, including Toyota, Geico, L'Oreal, General Electric, T-Mobile, and Johnson
& Johnson constituted 8% of the advertising revenue in the same period. Current Media attracts sponsors through their innovative VCAM
value chain
program, where advertisers sponsor both the Current.TV website and television network programming by asking viewers to create short
video messages related to the sponsored product or brand. By offering VCAMs prizes and payment based on popularity or sponsor
selection, Current Media creates incentives for viewers to provide ad content to sponsors.
business +
product model Current Media has announced considerations to sell interfaces that would allow other content providers to embed Current Media-owned
content into their sites, but has yet to ofﬁcially implement this plan.

revenue model

sales model

sources


general information + Sources Cited:
customers
[1] Tomich, Steve. “Current TV: Think Outside, Get Inside the Box.” December 28 2005. http://www.dv.com/article/9428 (Accessed December 3 2009)

[2] In 2009, Mark Rosenthal, the new CEO of CurrentTV's privately-held parent company, Current Media, began a scale-back of user-generated short-form video content as well as
value chain
scrapping three of the original programs produced by CurrentTV. http://www.latimes.com/business/la-ﬁ-ct-current12-2009nov12,0,6721489.story?track=rss

[3] Joe Flint and Meg James. “Current TV to shift from Video Format.” Los Angeles Times. November 12 2009. Available at
business +
product model http://www.latimes.com/business/la-ﬁ-ct-current12-2009nov12,0,6721489.story?track=rss (Accessed December 3 2009)

[4] http://www.current.com

revenue model [5] Current Media, Inc. "Amendment No. 4 to Form S-1 Registration Statement Under the Securities Act of 1933." p. 1

(Available at http://www.sec.gov/Archives/edgar/data/1424470/000104746908006807/a2183128zs-1a.htm

[6] Flint, Joe and Meg James. "Current TV to shift from video format." Los Angeles Times. November 12 2009.
sales model
[7] Tartakoff, Joseph. "Gore-Backed Current TV Pulls Plug on IPO." paidContent.org, April 10 2009. http://paidcontent.org/article/419-current-tv-pulls-plug-on-ipo/

(Accessed December 2 2009).
sources
[8] "API's are Essential for Content Creators, CurrentTV's Robin Sloan." Beet.TV. April 5 2009.

http://www.beet.tv/2009/04/turmoil-means-big-opportunity-for-emerging-news-organizations-currenttvs-robin-sloan.html (Accessed December 2 2009).


SWOT analysis S strengths W weaknesses O opportunities T threats

Leaders in community participation and development of user-generated content

{
Current has a well-integrated system of content delivery and augmentation across platforms

Unique ad sales opportunities and new advertising model
Viewer-created advertising presents advertising partners with unique positioning opportunities
Quality Journalism and Experienced Team
Competitive journalistic content ensures a wide variety of both topical and in-depth coverage, aided by professional
programming that establishes credibility among competitors
Expanding Database of Archived Short-Form Content
Archive may allow for expanded revenue opportunities
Strong Company Identity and Signiﬁcant Infrastructure Investment
Strong brand presence ensures relevance for user demographic, and infrastructure impedes new entrants into market
Open-source API
Promotes greater access to brand and expanded opportunities for advertising through widely-accessed platform



Limited visibility due to poor social media accessibility
+

{
Limited social networking presence leads to missed opportunities to attract new site users

Limited ability to attract and retain viewers
+

Demographic limits users to certain ages, excludes interactivity from those not perpetually connected to web

Constantly changing content requires constant research for, and updating of, information
+

Original programming is expensive and can be a signiﬁcant toll on revenue

High-paced, high-demand work environment requires dedicated staff
+

Qualiﬁed staff necessary to produce quality programming and editing incurs high costs

High operating expenses, expensive infrastructure, maintenance, and operations.
+

Twenty-four hour broadcast and webcast require extensive operations, maintenance and overhead

Potential for security and technical breaches
+

Infrastructure is vulnerable to technical outages and web users’ data security is can never be fully protected



economic | social | technological

{
Economic downturn may mean more customers turning to free sources of news online, thus
increasing revenue of online ads

Users spend more time consuming low-cost news, or participating in rewarding VCAM opportunities
Economic downturn trends generally ﬁnd more people going after education, an opportunity to
expand educational offerings, bringing additional revenue and avenues for "freemium" services

Current production “school” may be used to offer greater range of services, some at a cost, or to offer
training modules to existing educational programs or professional development programs
Economic recovery may mean higher discretionary spending on things like cable, with
increased ad revenue on that platform

Matching ad sales to best-performing platform, based on subscriber rates and user-click statistics




{
Trends away from traditional media will drive more trafﬁc to the site

As newspapers and magazines lose popularity, users increasingly rely on internet content
Younger generation of media-savvy pre-teens create an opportunity for younger-market initiatives

As users outside the 18-34 demographic begin to acquire advanced internet capability, Current can expand its market
Additional demographic changes in news consumption that open up the tail of the market, especially
the 'long-tail' opportunities to monetize even marginal news content

As the cost of carrying and archiving content drops, opportunities arise of offer every possible topic of news and
information, creating a long-tail for both viewers and advertising partners




{
Better integration of broadcast and internet, becoming a seamless portal of delivery, means
increased viewer attention to one medium and signiﬁcantly lowered distribution costs
As lines between platforms blur, users will have one dedicated portal and one powerful medium for advertising

Cheaper video production, already a trend, enables a larger base for viewer-created content
As more users gain access to advanced video and audio production equipment and suites, more viewers will
be able to generate high-quality content
Partnerships with existing and emerging digital media innovators to stay on top of changes to
internet ecology, including new social networking services, personal management tools, user-
generated interactive content
New methods for delivery and new demands by web users provide an opportunity to be a continuous leader in
adapting new technologies as they emerge, like full integration in RSS and social networking websites




{
Economic downturn drives down advertising rates, budgets of major advertising partners, distribution
+

arrangements (current and potential) and diminishes subscriber base
Danger of the “dotcom” problem as businesses struggle to identify ways to monetize web content when advertising is insufficient

Loss of advertising sales if new entrants into market threaten business model and leech users away from Current
+

Current must contend with competitors with significant user bases, such as Facebook or YouTube, who may enter into the news
media market with a similar interactive model
Significant increases in cost of acquiring third-party content
+

Potential changes in price of creating or acquiring original programming impinges on revenue

Changes in distribution agreements among broadcast industry as a whole, or loss of distribution agreements
+

currently in place with Current
Changes in distribution agreements, and potential shrinking of subscriber base, lead to loss of advertising revenue




{
Backlash against viewer-created content and amateur journalism drives users away from site and advertising
+

Online news content may fail to replace printed media and will remain difficult to monetize.

Competition from social networking sites like Twitter, which offers free and instant access to current
events, without Current’s production costs
+

Prohibitive production costs will enable competitors with streamlined aggregation to meet the needs of online news consumers to
have instant information in an even shorter format than short-form video. Currently, www.twitter.com/currenttv has 1,294 followers and
has not tweeted since September. There is also little activity on the Facebook Fan page.

Advertising model is rejected by internet users and does not lead to significant revenue
+

Intrusive, frequent, or inappropriate advertising discourages users from spending significant time on Currents site or channel.




{
Economic downturn limits availability of R&D funds to develop or acquire new technologies
+

With rapidly advancing changes in technology, significant funds must be expended in maintaining relevant offerings and infrastructure

Slow development of broadcast/internet convergence makes hybrid model less appealing to viewers
+

Clumsy or irrelevant connection between broadcast and web content would see users preferring a single-platform approach

No significant innovation in ways to monetize internet traffic
+

Precarious situation wherein health of company is dependent entirely on advertising sales

Changes in the cost of soliciting, storing, and streaming user-generated content
+

Though unlikely, increased costs in handling of video content would impede the archiving and creation of viewer content


Recommendations + SEND A RECOMMENDATION

Increase their brand and reach through active participation in social media websites

{
like Twitter and Facebook, and through viral marketing.

Extend revenue streams by adding paid incentives for web site users, such as tiered
membership with additional functions for a fee, or paid access to archival materials

Expand into market by offering alternate or supplementary content for broader
demographic (outside 18-34 yrs.) and the content “long tail.”

Provide internal production training to lower production costs, and develop training
modules for external education and professional development.

Reinforce brand and by leveraging and monetizing the API through partnerships with
other media outlets, such as the Hufﬁngton Post or CNN.

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