In the wake of College Media Network‘s announcement in late December that they were changing their business model, most of my attention focused initially on the fee structure that would exist for current and new clients. See interview here. Now, I turn attention to the second part of the announcement, the change to the College Media Network ad revenue sharing structure. Here’s the part that deals with the advertising revenue splits.
Newspapers will have more choice with managing online ad inventory by selecting one of the following on an annual basis:
A. CMN and the newspaper will share the inventory among all 5 ad units with a 70/30 breakdown. The newspaper will be able to utilize each ad placement up to 30% of the page impressions. Each party will retain 100% of the revenue made off the campaigns placed on the site, but any unused inventory on the newspaper-side will be filled with remnant ads (of which the newspaper will receive 20% of the revenue).
B. CMN will sell all 5 spots and remit a payment of 20% of the total revenue to the newspaper.
C. The newspaper can buy the entire inventory from CMN at a rate of $7.50 per 1,000 page views. Naturally, the newspaper would retain all the revenue from the advertisements placed on site.
While license fees are billed up front on an annual basis, revenue sharing provides an opportunity to offset that cost acreoss the year.
I have an e-mail in to Lewis with a number of questions related to the new revenue sharing options, and will post it as soon as he responds. In the meantime, any thoughts on the new structure?