[opendtv] Re: Apple's online TV proposal stirs interest from broadcast networks

At 5:30 PM -0500 12/30/09, Albert Manfredi wrote:
You missed the new point.

What this article and others should make clear is that the congloms don't need the MVPDs to deliver their bits either. Or at least, they don't need tyhe special-purpose TV delivery servicer of the cablecos. Not their ad-supported material, at least.

In the long term you are correct, but for a good part of the next decade the MVPDs are going to be paying dearly for content from the congloms as the MVPD business winds down.

Look how long it has taken for the Broadcast franchise to start a significant contraction - decades. Just saw a study that said that TV station revenues were down 22% in 2009. Cable revenues are still growing, as they can keep raising rates to maintain profit margins, and ad insertions into cable networks as still growing year over year. Saw another story that most of the audience that NBC lost when they moved Leno to 10pm went to cable networks, not the broadcast networks...

So I would not expect the MVPDs to wither and die quickly.

 >> What value added do Apple or cablcos offer, when
 >> ad-supported content is streamed over the Internet?

 The storefront and the cash register.

I would think that the ISP would fill that function just as well.

Of course they do. Why do you think the congloms are moving away from affiliates to the MVPDs? But each increase in subscriber fees sends MVPD rates higher, making it possible for companies like Apple and Netflix to test the waters and skim some of the MVPD customer base.

The question you should be asking is who operates the most efficient storefronts and customer service organizations. The advantage goes to those who leverage the Internet infrastructure.

 Tom has a good point. "Paid three times" is more like it.

Perhaps. Unfortunately, consumers do not see how the revenues collected and generated by the MVPDs are distributed, to pay for operations, content and franchise fees.

Regards
Craig


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