Current.tv A Year After

Good that they are feeling optimistic. As far as I can tell, the profitability calculation is a rough estimate. From the SF Chronicle:

... The best news of all for Hyatt, who is Current's CEO, is that the operation is making a small profit, according to Derek Baine, a senior analyst with Monterey-based Kagan Research.

And some of the TV industry observers who once mocked Current have begun to change their minds as several networks, such as CNN and the CW -- which is a combination of the former WB and UPN television networks -- are now embracing user-generated content.

But while Current may have been ahead of the curve on this trend, the next challenge it confronts is tougher: Many in the channel's targeted 18-34 demographic may not be able to afford the premium-tier service of some digital cable systems, where Current is carried. Others may prefer lapping up videos online in YouTube's free-form format rather than on Current's more organized site. Critics continue to ask: Is Current focused on the wrong medium?

Current "caught the (viewer-created content) trend early, but it is kind of surfing by them," said John Higgins, business editor at Broadcasting & Cable magazine, a trade publication for the television industry. "These guys (at Current) had all the right ideas and all the same machinery in place that YouTube did, but they didn't quite do it. Lighting struck 10 feet to the left of them.

"Do you ever hear people say, 'Did you see that video on Current?' No. They say, 'Did you see that video on YouTube?' " Higgins said.

Hyatt said Current is trying to position itself as the thinking person's YouTube -- "a premium offering" where the best of user-generated content will gravitate to TV.

Part of Current's strategy is rooted in the belief that while YouTube may be serving up 100 million videos a day to 6 million unique visitors, the 18-to-34 set still watches and appreciates a lot of television. But while that age group watches an average of three hours and 55 minutes a day, it is far less than older folks. The over-50 crowd sees nearly six hours daily, according to Nielsen Media Research.

Yet, in another sign that media consumption habits are unpredictable, the audience for short videos may not be as young as perceived. The highest percentage of YouTube's audience is between 35 and 49 years old, according to June measurements by Nielsen/NetRatings.

... Baine estimated that the company is turning a slight profit of $3 million this year based on estimated revenue of $47 million. He forecasts that Current's advertising revenue will increase next year to $19 million from $10 million this year. "For a network in its first year to not be losing money is pretty good," Baine said.