[opendtv] Re: Apple's online TV proposal stirs interest from broadcast networks
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 30 Dec 2009 09:29:00 -0500
At 5:51 PM -0600 12/29/09, Manfredi, Albert E wrote:
Dale Kelly wrote:
Hummm....the plot thickens!
http://broadcastengineering.com/news/apple-online-tv-proposal-stirs-interest-20091228/
How weird. Offer a subscription fee so that they can stream the
network content to proprietary devices. Wow, what a deal.
iTunes is NOT proprietary. The service is available to anyone with an
Internet connection and a PC or Mac. It ALSO works with Apple TV, and
supports place shifting via iPods, the iPod Touch, the iPhone and
soon the rumored Apple tablet. It ALSO works with the Palm Pre
although Palm and Apple are alternately enabling and disabling the
service on the Pre.
It remains to be seen IF such a service will be introduced, and what
it will work on.
Craig has complained many times that the networks/broadcasters
should not be demanding a kickback from the MVPD subscription fees,
because in doing so, the broadcasters are being "paid twice." Well,
what do you call this scheme?
Disintermediation of middlemen.
The congloms no longer need broadcasters to deliver their bits; ad
revenues are in decline both at the networks and at broadcast
stations. Subscriber fees are the final straw that will break the
back of the broadcast/MVPD oligopoly.
When the consumer is spending more than $50 per month for their TV
fix - and the price keeps rising every year because of direct
payments [subscriber fees) - the stage is set for the consumer to
consider alternatives.
A portion of those cable/DBS bills cover infrastructure and overhead;
and an ever growing portion is subscriber fees. Unfortunately we
don't really know how much we are spending on subscriber fees. A New
York Times article I read yesterday said that the cable will haul in
about $28 Billion in subscriber fees next year, while TV stations
will pull in nearly $1 Billion.
It is important to note that cable systems get local ad insertions in
the cable channels, which at least partially offset the subscriber
fees they pay. MVPDS cannot insert ads into the streams from local
broadcasters, with which they compete for the local ad market.
And we still do not know what Apple has in mind for this rumored
service. They SELL network shows today WITHOUT ADS. We do not know
what role advertising will play in this service, so it is still too
early to say we are paying twice. WHat we do know is that Apple will
rely on broadband services they do not sell to enable the service,
and that they already have a very cost effective payment/customer
service organization in place with iTunes and the Apple stores.
And same goes for the cable company content over Internet scheme?
A desperate attempt to keep its subscriber base from moving to
alternatives such as the rumored Apple subscription service.
Cable/DBS subscription fees, in principle, go to paying for all the
labor involved in keeping their networks going, as well as to pay
for content that is not ad supported. But when the MVPDs use the
Internet to deliver ad-supported content, why isn't the content
free? Following the same "paid twice" logic, the ads should pay for
the content, and the cost of the broadband connection is covered by
the fee to the ISP. What value added do Apple or cablcos offer, when
ad-supported content is streamed over the Internet?
The storefront and the cash register.
Regards
Craig
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