[opendtv] Re: Barriers eroding to LCD TV adoption

I guess you need to look up the definition of the term "payment" and try to
draw a distinction with the word "exchange."  Here's how I (and much of the
English-speaking world) use the terms.  You can "exchange" something of
value for something else of value, even by "paying" for it.  A "payment" is
a special type of "exchange" where cash -- or something as liquid as cash --
is one side of the transaction.

We can get quite esoteric here with currency swaps, tranches,
time-versus-money, but I clearly recognize a payment, because I can use part
of the proceeds to buy a Coca-Cola.  Somehow, exchanges don't lead to that
type of liquid.

"Elect" retransmission content?  Once again, you're out of phase with
reality.  You can only "use" retransmission consent if you have another
party willing to dicker.  Sometimes, you can even involve an exchange of
things of value.  But, so very seldom is it something spendable.  Spendable
in this context would be cash or spots.

Then, apparently because you like moving goal posts and playing three-card
month, in a sentence were you talk about most of the affiliates, you go into
the special deals that only the networks can take advantage of with their
affiliated cable networks.  Note, these deals that you talk about involve NO
CASH, just exchanges of things of value.  Should I point out that these are
freely negotiated between sophisticated business entities?

Last time I checked, there were 1600 U.S. TV stations eligible for must
carry/retrans consent.  If you add up all the stations owned by Disney, GE,
Viacom and News Corp, you are left with less than 10% of that number.
Indeed, if you limit the "universe" to just commercial TV stations (non
commercial stations have few opportunities to use retrans consent), the
number of stations owned by entities that have cable channels is perhaps as
much as 10% of commercial stations.

Craig, as I've mentioned here, I have a hand up on you.  I've actually tried
to negotiate carriage of a TV station that did not enjoy must carry/retrans
consent with multiple cable systems and Pacific Bell's stillborn cable
overbuild.

Also, I have friends and acquaintances in local media, some I've known since
before the real-life activities that inspired the movie "Anchorman" were
fresh news.  I'm uncomfortable talking about specific stations, but of the
three stations in San Diego that have been able to benefit from retrans
consent, not a dollar of money changes hand.

If I'm not mistaken, a few triennial periods back, GE used retrans consent
locally to get MSNBC (formerly America's Talking) fully rolled out to all
the neighborhoods in all the cable systems.  The retrans agreement between
the local CBS affiliate includes no exchange of funds, just carriage of the
station's signal and the ability for that station to do local inserts into
CNN Headline news, and the ability to sell spots into those inserts.  With
the ABC affiliate, their agreement provides for the carriage of the analog
and (all program stream offered in their) digital signals -- but that
station is not multicasting at this point.  The cable company, on a
dedicated channel, offers live and repeated broadcasts of the station's
newscasts.  (That's one of the largest of the "24/7 news channels" of which
you speak.  The station gets to show their logo (and sell spots) in the live
broadcasts; the cable company sells time in the repeats, which they get to
brand with their own bug.  I don't know the details of the local WB
affiliate (only because I haven't asked).  The Fox and UPN affiliates are
foreign and do not "benefit" from must carry/retrans.  The independent
station "elected" for must carry.

Cable companies -- who believe they are not actual utilities -- could, if
they desire to live up to their rhetoric, produce local programming.  Cox
Cable San Diego (600,000 or so subs) produces presents UP TO three hours of
fresh programming each week.  Let's do the math.  600,000 subs paying an
average of (conservative) $450 per year.  Why, their collections amount to
$300,000,000 per year.  (Not to mention the two other significant cable
systems in this market.)

$300,000,000, to put it into context, is a little more than half the amount
of revenue that ALL TV stations in San Diego collect in a year.  Our Tribune
affiliate does perhaps 6 hours of local programming in a week; all the other
stations provide more than that amount of locally-flavored programming in a
DAY.

And, not to forget your last obfuscation in search of a defense, do you
really consider "regional sports networks" and pay per view movies as
examples of locally-flavored content?

Here's my take: regional networks provide regional flavor (with the possible
exception of the Yankee's YES, which I note is now discussing merging with
the BoSox's New England Sports Network.)  And, unless you're talking the
West Side of LA or the San Fernando Valley, pay-per-view movies are not
locally-flavored content.

John Willkie

-----Original Message-----
From: opendtv-bounce@xxxxxxxxxxxxx
[mailto:opendtv-bounce@xxxxxxxxxxxxx]On Behalf Of Craig Birkmaier
Sent: Wednesday, August 11, 2004 5:09 AM
To: opendtv@xxxxxxxxxxxxx
Subject: [opendtv] Re: Barriers eroding to LCD TV adoption


At 7:31 PM -0700 8/9/04, John Willkie wrote:
>You've got it absolutely 180 degrees out of phase with reality again,
Craig.
>
>It's the cable firms that are hitching a free ride (no payment for content)
>on the output of broadcasters.  Broadcasters provide a few channels of
>locally flavored content that, in a 200 channel cable universe, still gets
>more than half the total viewership.  Isn't that called diminishing
returns?

NO PAYMENT?

You've got to be kidding. Most of the major networks and their
affiliates elect Retransmission Consent rather than must carry. There
is compensation involved in ALL of these deals. In most cases it is
"in-kind" rather than cash, although CBS typically has taken cash.
NBC, ABC and Fox used Retransmission Consent to get preferred
placement for new cable networks. This is how MSNBC, CNBC, ESPN2, and
may other channels got established on the early '90s. Now that the
nets have bought up most of the better cable networks, they are
beginning to negotiate for cash for the local broadcast signals.

The cable guys are not getting a free ride. They are the collection
agent for subscription fees for the stuff that 90% of the audience
watches.

>The only local flavor in cable is local spots (mostly for new, expensive
>cable services) and public access.  Yeah, that's the way to establish a
>completive service.

And exclusive regional cable networks (mostly sports)
And 24/7 local news channels
And pay-per-view movies

Regards
Craig


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