[opendtv] Re: Bob likes COFDM

At 6:11 PM -0500 3/27/05, Manfredi, Albert E wrote:
>Then I don't understand why the conglomerates
>continue to create highly desirable prime time
>content that they air FTA. If it's true that the
>cable-only shows generate more revenue for the
>conglomerates than these FTA shows, one would
>expect the conglomerates to create their best
>content to be cable-only or DBS-only. But they
>obviously don't. Some very good new shows have
>been introduced this year, FTA.

There are many examples of the congloms creating high quality content 
exclusively for cable (and later DVD release). Just look at the 
winners of the Emmy awards for the past few years. Most of the top 
shows have been exclusive to cable - The Sapranos, Sex in The City, 
and many more.

Here is the breakdown for the 2004 Emmy awards by Network 
(nominations in parenthesis);

                Programs                Individuals     Total
HBO             3       (5)     13      (27)    16      (32)
FOX             1       (1)     2       (9)     3       (10)
NBC             0       (0)     3       (8)     3       (8)
ABC             0       (0)     2       (7)     2       (7)
PBS             0       (3)     0       (4)     0       (7)
A&E             0       (0)     0       (4)     0       (4)
Cartoon Network 0       (2)     0       (0)     0       (2)
CBS             1       (1)     0       (1)     1       (2)
Comedy Central  1       (1)     1       (1)     2       (2)
Discovery Channel       0       (0)     0       (2)     0       (2)
Showtime        0       (0)     0       (2)     0       (2)
UPN             0       (0)     0       (2)     0       (2)
USA             0       (0)     0       (2)     0       (2)
BRAVO           0       (1)     0       (0)     0       (1)
FX              0       (0)     0       (1)     0       (1)
LIFETIME                0       (0)     0       (1)     0       (1)
NICKELODEON     0       (0)     0       (1)     0       (1)
WB              0       (0)     0       (1)     0       (1)

As you can see, HBO had a huge lead over the broadcast networks. In 
fact, the cable nets outperformed the broadcast nets in total for the 
first time in 2004:

 From the NCTA:
>
>CABLE NETWORKS LEAD 56 TH ANNUAL PRIMETIME EMMYS
>
>Cable Surpasses Broadcast With Record 50 Primetime Emmy Awards
>
>  Washington , DC  - In an affirmation of cable's increasing creative 
>clout in the television environment, 11 cable networks collectively 
>garnered a record 50 Primetime Emmy awards yesterday from the 
>Academy of Television Arts & Sciences (ATAS), surpassing for the 
>first time broadcast networks, which earned 37 awards.

So much for the best stuff going to the broadcast networks... The 
situation has become so embarrassing to the broadcast networks that 
the Television Academy had a hard time convincing a broadcast network 
to carry the awards ceremony next year. CBS eventually agreed to 
carry the broadcast to keep it from moving to a cable network.

As we have covered before, the broadcast networks do not make much 
money from the first runs of the prime time shows produced in 
Hollywood (they make more money on the throw away news shows like 
20/20 and 60 Minutes). The rights fees are getting very large for 
good first run Hollywood product; in some cases the Networks lose 
money on the first run, anticipating the bounce it gives shows that 
are adjacent.

So now the networks require participation in the back end revenues, 
if they are not producing these shows in their own studios. 
International first run release, DVD release, then cable syndication, 
and eventually broadcast syndication are where the profits are made. 
But a successful Network run is very important in driving up the 
price for syndication.

>The cable and DBS companies won't dump the content
>that their subscribers want to see, obviously, but
>certainly their deals would have to be renegotiated.
>My hypothesis here is that with DTT multiplexes, the
>conglomerates are able to make more of their content
>fit the model of the current FTA prime time lineup.
>And that this is a good deal for the conglomerates.

TIme will tell. The congloms would like to be rid of the affiliates. 
IF they could own stations everywhere the situation would be VERY 
different.


>All I'm saying is that you can have a Burger King
>franchise and a Wendy's franchise chain, each one
>exclusive to its own brand, and yet they can and do
>compete very effectively. The reason being, nothing
>prevents two such franchise stores from operating
>over the same medium (e.g. strip mall). And at the
>same time, you can also have a mom and pop operation
>open up a local-only store and compete with these
>two giants, in that same strip mall.

An interesting analogy. But what happens if the company that owns the 
strip mall will only let certain food chains compete?

This is the situation today; there is very limited real estate (even 
in cable and DBS). It is virtually impossible for an independent 
producer to get their content onto a broadcast network, and still 
very difficult to get it onto a cable network.

>
>With OTA TV and the FCC local ownership cap rules,
>this same model works for OTA TV.

Sorry Bert, but it does not. Even at the local level it is VERY hard 
to get a show on the air, unless you want to PAY the station for 
carriage. This is the main reason that there are so many infomercials 
on broadcast stations - why pay for a program that will not produce 
an audience that will attract local advertisers, when someone is 
willing to pay you to run their program?

The world of television is controlled by gatekeepers, not the free market.

If you have enough money, you can buy a TV station and program it 
yourself. But if you want to make a profit, you will quickly learn to 
play by THEIR rules.

>
>The reason the conglomerates won't easily lose any
>leverage they have is very simple: they create the
>best hamburgers. And that's what people want. As
>long as they continue to create the best hamburgers,
>they don't have a lot to worry about.

I like steak.

Obviously I am not alone. The best content is no longer the exclusive 
domain of the broadcast networks, or their cable nets for that 
matter. It is a matter of personal taste. Unfortunately, the best 
content rarely every gets to TV these days because the networks 
pander to what they think the masses want. Good shows with good 
values and good scripts rarely succeed today because the masses have 
an 8th grade education and expect at least 6 acts of sex or violence 
every 10 minutes.

Sad but true...

>
>To compete against cable and DBS, all you need to do
>is provide those same prime time quality TV shows,
>but more of them OTA. Cable and DBS will still win
>more viewership, because most people can't say no to
>"more," but the percentages will probably shift
>somewhat.

What you need is real competition.

This means MORE than just offering the same stuff as cable. It ALSO 
means that it should be relatively easy for any independent producer 
to get their stuff broadcast, even it the only slot they can afford 
is at 3am Thursday morning; At leas then they can promote the show 
and get people to cache it in their PVRs for viewing during prime 
time.

Regards
Craig
 
 
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