[opendtv] Re: An Unsteady Future for Broadcast
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 24 Nov 2009 07:16:41 -0500
At 8:35 PM -0500 11/23/09, Albert Manfredi wrote:
Doesn't make sense to me. Who produces those cable shows that you
think are so interesting? Isn't it the same congloms? What makes you
think that some of this previously non-OTA stuff can't be available
OTA?
The producers of cable shows include a wide range of independent
producers. Yes some of the cable networks they create shows for are
owned by congloms, but the talent and production costs are typically
much different than for network sitcoms and dramas. It is the
economics of the shows that is fundamentally different.
And yes there are some cable networks that are nothing more than
repeat channels for the broadcast networks - ABC Family, FX, USA etc.
These cable networks actually make it MORE difficult for local
stations to buy high quality programming in syndication. They get
access to the network shows first, providing a national footprint
for advertisers to help pay the very high cost per episode for
syndication rights. ANd these networks get subscriber fees to help
pay for these shows as well.
Local stations can buy shows developed specifically for broadcast TV
and off network programming. Here are the top ten syndicated shows
for a week in July.
SYNDICATION: 7/13/09 - 7/19/09
1. JUDGE JUDY
1t. WHEEL OF FORTUNE
3. TWO AND A HALF MEN
4. JEOPARDY
5. FAMILY GUY
6. ENTERTAINMENT TONIGHT
7. EVERYBODY LOVES RAYMOND
7t. OPRAH WINFREY SHOW
9. GEORGE LOPEZ
10. CSI NEW YORK
10t. SEINFELD
As you can see, many of these are off network shows that are run in
the late afternoon before the local news, and in the prime time
access hour. They are expensive, but pull enough audience for the
stations to make significant revenues in these time slots. By the
way, many stations have tried to produce local shows for these time
slots. none have been able to produce ratings comparable to network
or nationally syndicated shows.
Now the real problem. What happens if a station needs to program
their entire 24/7 schedule, and most significantly prime time? There
simply are not enough syndicated programs to fill up a schedule
unless you want to bring back Mash and Lucy. Some independent
stations run movies in prime time, but this is really trolling for
surfers, as most people now buy or rent their movies. And whatever
the stations could come up with, they would still be competing for an
audience against first run and high quality reruns on cable (both
cable networks and the "former" broadcast networks that would now go
direct to cable and DBS.
As for the cable programs that most of us now watch, very few are
offered in syndication to broadcasters. Thee shows are designed to
fill up the 24/7 programming demands of the cable networks. Most of
these shows are run multiple times in different time slots to
accumulate ratings; offering them for syndication would have a cable
network competing with itself.
And remember, there are still a handful of cable networks that are
not owned by the congloms. Ask yourself this: A broadcaster, Scripps
Howard, decided early on to get into the content business. They now
operate a VERY successful cable division with HGTV, The Food Network,
Fine Living, et al. They could easily run these shows on their
broadcast stations, but they do not.
WHY?
Could it be that they are protecting the value proposition for the
cable division that is growing while the broadcast division and their
newspapers are in a tailspin?
This is NOT like the UK, where Freeview is operated more like a MPVD?
In the U.S. the congloms WANT you to move to cable or DBS so they can
get you to pay for "Free TV."
Do you really think that the congloms would help broadcasters develop
a free alternative to cable and DBS?
You've said many times that cable allows more niche-oriented shows
to be delivered, right? Well, so would OTA, if used right. Maybe not
as many as cable, but certainly more than the three they keep
talking about in these "analytical" articles.
The problem is that the stations would need to develop these shows
themselves and would only have access to their local market or the
markets served by their station groups. The economies of scale do not
work. Stations could work together to build new production companies
to create content for a revitalized broadcast industry, but this
would be very expensive and guess what?
These shows would have to compete with the MPVDs who control >85% of
the audience.
Talk about an uphill battle!
> Your 30 channels are NOT the stuff that the
American viewing public is most interested in.
Why the hell not?
1. You live in a unique physical location with good quality broadcast
signals from two markets. A significant portion of the content is
duplicated on two of the channels you receive. Most markets have less
that 15 unique channels.
2. Many of the multicast channels you receive are targeted at the
unique needs of the Washington DC market. You may enjoy watching BBC
news and other international content, but this stuff does not hold
broad interest across the country.
3. Stations must compete with each other and the cable networks for
off-network shows. And the off-network shows with the best ratings
potential are very expensive; stations would still need cable
carriage and retrans consent money to reach a large enough audience
to pay for them. If the broadcast networks moved to cable and DBS,
the congloms would have little incentive to provide their best
content to OTA stations, and the cable/DBS systems would have little
incentive to pay retrans consent money to stations that duplicate
content that is already available via the MPVDs.
What's so difficult about transmitting, say, something like HGTV or
Monk on OTA multicasts? As a matter of fact, our MNT affiliate is
doing just that, with Monk, previously only a cable show. What's to
prevent this trend? I can't believe that shows like Monk are so very
popular on cable that the cable companies hold on to them jealously.
And perhaps that would be illegal anyway, under some sort of
"restraint of trade" clause or other. My view is, the only thing to
prevent this should be price.
BINGO!
It is all about advertising revenues. The cost of shows is typically
based on the number of homes in a market - i.e. the potential
audience, not the actual number of homes that watch. If broadcasters
are not on cable they simply cannot reach a large enough audience.
And if they are, they will have even lower ratings than they do with
the network content they deliver today.
TV stations must pay for the content they air - and
yes they now pay the networks rather than the other
way around. If the networks pull their content from
local broadcasters, local stations will have nothing
left to air except the limited local news they
produce and syndicated programming.
You used to think that this is the preferred model. What you used to
call, "separate content from carriage," more like the Euro FOTA
model. If station groups pay, then station groups decide what to
air. They shouldn't be tied to just one conglom. So they can operate
more like a mini-MVPD. Cool. Why wouldn't the owners of the show go
ahead and sell it to station groups, if the price is right? Do you
really think they are afraid of losing significant numbers of cable
customers?
Yes. The congloms are afraid of losing the subscriber fee revenues
they collect for their cable shows today. AND they are eyeing the
additional subscriber fee and advertising revenues they can collect
if they cut out the stations.
And once again, I could have access to at least 30 streams from
*local* broadcast stations, if they bothered to use the spectrum
they already have. Not duplicates, as you continue to insist. I
already showed you this.
This is NOT true for MOST U.S. markets unless you run 4-5 shows per
multiplex - i.e. little or no HDTV. They cannot use the spectrum they
have to increase the number of multiplexes in most markets because
the ATSC standard and big sticks are so inefficient with regards to
spectral re-use.
Could we build a Freeview equivalent in the U.S. using a more
efficient transmission infrastructure?
Certainly!
Could this happen?
NO. The congloms are addicted to multiple revenue streams, and
especially subscriber fees.
The OTA station groups don't have a large fleet of trucks and techs
to keep on the payroll in every market. That should count for
something. Even if they can't make that 60 percent profit.
It's that overhead that makes the MPVDs so attractive to the
congloms. Even more important, the MPVDS know who their customers are
and are starting to deploy technology that will allow advertisers to
reach individuals, not just audiences.
The broadcast business model is broken.
The good news is that the MPVD model is also broken, but will survive
longer than broadcasting based on momentum and their ability to
collect subscriber fees.
In the end the Internet wins. The congloms will have far less ability
to control what we watch when any independent producer can reach an
audience anywhere, anytime without having to deal with a gatekeeper.
Regards
Craig
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