[opendtv] Re: A Perfect Storm Hits Media Businesses
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 5 Sep 2009 09:34:26 -0400
At 8:28 PM -0400 9/4/09, Manfredi, Albert E wrote:
That would be one good way to cut down people's TV watching time.
Why?
It might be useful to categorize the types of TV watching you (or any
of us) do:
1. Dedicate follower of a series of TV programs - you make time to
watch every episode;
2. Casual surfer who occasionally finds a compelling program they
watch from start to end;
3. Those who watch live events including sports and American Idol;
4. Programs that happen to be on while performing other tasks
including: Internet/e-mail, cooking, "studying," talking on the
phone, etc.
5. Specifically seeking information including news, weather, etc.
Clearly #s 2 and 3 are strengths of broadcast (and MPVDs).
#1 is now divided among first run broadcast (live or DVR), reruns,
season of series on DVD, ad supported Internet streaming, and paid
download of individual episodes.
#4 accounts for many of the hours that Nielsen and others count as TV
viewing, however, I believe this should be counted in the same
category as having music on while doing other tasks.
#5 is a weakness of broadcast TV, as the program format makes seeking
information on demand tenuous at best. Those with cable can tune to
Near Information on demand services, which may be sufficient. But
more and more, people are turning to the Internet for information on
demand.
We had dinner last Sunday night with a close friend who was recently
widowed. She decided to drop DBS service because of the cost, and now
only watches TV via DVD or her computer. She did not drop her DSL
service.
Just like telephone service. No one pays by the call or for each minute
used. Everyone looks for package deals. Unlimited calls, unlimited long
distance, or 600+ minutes/month, etc. I doubt seriously that you can
make consumer regress to paying everything they consume by the event.
Consumers will simply go to the service that does not require this.
Remember the Golden Age of Broadcast TV? Do you remember paying a
significant charge for a telco landline and VERY HIGH per minute
charges for long distance (and even higher per minute charges for for
"long distance calls" inside the service area of your telco provider?
Technology changes. We have evolved from high per minute charges for
long distance, through the AT&T MCI price wars that were just
slightly higher than the local connections charges for the Baby
Bells, to the Baby Bells getting into the Long Distance business,
which in turn led to unlimited long distance packages. Along the way
we started moving to VERY costly wireless phones with per minute and
long distance charges. As the telcos moved to digital technology
charges for long distance nearly went away.
Cellular plans today make no distinction where the call is placed
within the U.S. Skype and others have made global long distance
virtually free. Most young people are abandoning wired phones all
together.
In short, these things evolve.
Broadcast TV - where there was a choice between 4-5 quality channels
- was a huge money maker in its day. Cable and DBS changed the
landscape for most viewers. I seriously doubt w3e would continually
engage in debates like this IF Bert was not among the 12% of U.S.
homes that choose not to subscribe to a MPVD.
The reality is that the typical U.S. family now spends well in excess
of $100 per month for visual entertainment - TV, DVDs (sales and
rentals) video games, and the occasional trip to the theater.
One would have to be hopelessly lost in the past, to NOT recognize
that emerging technologies are going to target this huge pile of
money! Direct payment for program rights or highly targeted ads to
support the cost of content are not only growing in favor, but are
likely to take an ever increasing portion of that pie.
Broadcasters have not kept up with technological change. We have seen
Ma Bell broken up and re-assembled as technology has changed the
telco industry. Bert thinks that re-assembling the TV networks into a
national service would save the day.
AT&T's stock price has been hovering around $25 for most of this
decade. There is NO growth story - other than the temporary lift for
an exclusive deal with Apple for the iPhone. For now AT&T still pays
a healthy dividend; but the future looks rather bleak for anything
other than wireless data.
Perhaps they will be able to take advantage of Obama's EOL counselling.
Regards
Craig
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