July 21, 2015

Revenue Streams / Tolls

When you watch something on ESPN, you are part of a large toll-based ecosystem. Click here to see how much you pay, each month, even if you never ever watch ESPN. Basically, you are spending somewhere between $5.75 per month and $7.00 per month, depending upon how many ESPN channels are available to you.

Then think about what ESPN does:
  • Collect monthly money from individuals who never, ever watch the channel (eight billion dollars per year ... how much money do you collect from folks who never buy your merchandise?)
  • Collect advertising revenue from brands looking to connect with those who love sports.
  • Offer DVR-proof programming, requiring the user to watch the commercials, thereby driving up the value of the commercial, thereby allowing ESPN to collect even more revenue.
We're in an environment where we either collect tolls, or we pay tolls. We don't want to be in the latter category.

So you, the cataloger, let's look at your situation. You are being constrained by tolls, aren't you? However, you have an advertising venue that could allow you to collect tolls, right? In other words, your catalog could evolve, couldn't it? Instead of sending your wares to 1,500,000 customers forty times per year, you could use half of those catalogs to collect advertising tolls from other brands, right? Wouldn't that lower your cost structure? Wouldn't that allow you to circulate deeper? Wouldn't that allow you to grow your own business?

I know, I know, you're not going to do this. You'd never let Pinterest advertise in your catalogs (and they don't want to advertise in your catalogs, but you get the point) ... offering your customers an opportunity to pin your creative imagery on their platform. That couldn't possibly benefit your business ... toll-based revenue.

Or could it?