R U Texting? - Broadcasting & Cable

R U Texting?

Millions of TV viewers are, giving networks a lucrative new channel to audiences
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This season, NBC's hit primetime game show Deal or No Deal is inviting viewers to send a text message and pick the “lucky” case. Winners will walk away with $100,000 each. NBC, meanwhile, will likely walk away with several million.

As more Americans get into the habit of communicating via a short-message system (SMS)—sending text messages through a wireless or instant-messaging service—television networks are discovering that texting is more than just a promotional tool for drawing in viewers. It has become a tidy new revenue stream.

Broadcast and cable networks alike are increasingly incorporating pay-to-text initiatives into their reality programs. And while the networks emphasize that such interactive campaigns are primarily meant to engage viewers, they're awakening to the revenue possibilities as well.

STAGGERING POTENTIAL

“There's really the potential for the networks to generate some money now, and they're taking it very seriously,” says Russell Kagan, a TV consultant and producer who has coordinated texting campaigns for ABC and other networks. “It costs them almost nothing, but the potential's staggering.”

Networks have invited viewers to send SMS text messages for years, charging them between 49¢ and $2.49 to vote for reality-show contestants, play trivia games or request digital extras, like screensavers. And viewers have obliged: Some 64.5 million messages were sent during last season's American Idol on Fox—and that was only on Cingular's wireless network.

The networks can walk away with 45%-60% of the proceeds after the cellular companies and their aggregators—which contract with the networks and arrange the call-in codes—get their share. With roughly 15 million Deal viewers sending SMS messages at 99¢ a pop last season, NBC potentially cleared upwards of $4 million after splitting its take with Endemol, Deal's producer—a nice piece of change. But network executives insist that the dividends come in the form of viewer engagement.

“Let's be clear: There's absolutely a revenue number we're trying to make with wireless as a whole,” says Salil Dalvi, VP of NBC Universal Wireless. But “it's a winning proposition to get people more engaged in your shows, whether you're making money from messaging or the distribution of content or because people are more familiar with the brands.”

Cyriac Roeding, VP, Wireless, CBS Digital Media, similarly stresses the bigger picture. “We're covering our costs and maybe a little more,” says Roeding, whose division has created text interaction for CBS' Big Brother and Survivor and is developing campaigns for corporate sibling The CW. “But the driver for us is not to get rich. The driver is to increase the loyalty for the programming and increase the engagement and the involvement of the consumer to the program.”

LEGALIZED GAMBLING?

On cable, Bravo's fashion reality contest Project Runway encourages viewers to pay $1.99 a month to “adopt a designer” and receive exclusive “in-show” messages from the contestant each week. GSN launched Playmania, in which users can call, text or go online to participate.

Last month, TBS debuted Midnight Money Madness, a two-hour game show from Endemol that runs live Mondays through Thursdays on both coasts and offers viewers $150 to $2,500 for answering trivia questions by texting, calling a 900 number or entering online.

TNT/TBS Executive VP/COO Steve Koonin says the numbers have “far surpassed our expectations”—more than a million paid entries so far (calls and texts combined), with texting as the favored mode. Koonin also notes the show's median age is 36, right in the middle of the advertiser-favored 18-49 demo.

While the networks hesitate to tout texting as a significant revenue engine, Steve Safran, president of digital consulting company Safran Media Group, doesn't mince words.

“The genius of this is, they figured out a way to legalize gambling,” Safran says. “If viewers are playing for a $10,000 contest, that's what this is. And it's astonishingly profitable.”

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