[opendtv] Re: FCC Eliminates Simulcast Rules

At 5:20 PM -0400 9/21/04, Manfredi, Albert E wrote:
>I don't see this. If each major network transmits 3
>program streams instead of one, even if each
>individual stream gets smaller viewership, overall
>the network might easily get a larger OTA audience.

How does this expand the viewing options for the consumer? It is 
still just a handful of companies exploiting their archives. What 
viewers get in the UK and Germany is improved choice.

it should be OBVIOUS - given the current storm of controversy that 
surrounds network news - that the major networks are likely to reduce 
their news programming in the near future. The audience is moving to 
24/7 news networks and the Internet. NBC could offers MSNBC through 
affiliates, but this would create the kind of carriage conflict that 
I have been talking about. Would a cable system carry MSNBC directly, 
or would they be forced to carry the network via the multiplex of the 
local broadcaster?

The alternative is for the networks and or stations to create their 
own new networks that are in some way differentiated from the 
cable/DBS networks. The economics simply do not add up for this when 
the potential audience is only 15% of U.S. homes. The potential 
audience grows IF broadcasters offer more of the cable/DBS channels 
that people  already are watching; and it grows exponentially IF 
these channels are offered in the free and clear.

But this is highly disruptive of current business models. Maintaining 
the status quo will allow the networks and multichannel services to 
keep pushing up rates. Real competition would drive down subscription 
rates.

And one more thing. You keep talking about larger audiences for the 
network. They already HAVE 90% of the audience. The only way to grow 
the audience when you already control it, is to get people to spend 
more time watching TV.  Further fragmentation of the OTA audience 
does not grow it - it simply subdivides it into smaller chunks.

>Some folk would much rather watch a rerun of an old
>Outer Limits show than any Monday Night Football,
>hands down. Why should a network, or a local
>broadcaster, prefer to disenfranchise these people?
>Do they really think these Outer Limits folk will
>tune into a football game they don't care about? Of
>course not. They'll instead switch to a different
>broadcaster.

In major cities they can do this already. There are typically 2-4 
independent stations that do nothing but counter-programming with old 
syndicated content. This is why Dan Rather's Evening News ratings in 
New York City are lower than several stations re-running sitcoms in 
the same time period.

If the broadcasters offer more choices in their OTA multiplex the 
audience can only grow it two ways:

1. More people put up antennas and watch OTA shows;
2. Existing OTA viewers spend more time watching TV.

>It doesn't make sense to me that the major networks
>would be happier to compete head to head over cable
>and DBS media, with possibly hundreds of other
>channels, as opposed to competing over an OTA system,
>up against only dozens of other programs.

Perhaps this will help you understand:

Total TV homes in the U.S. = ~106 million

Homes that subscribe to multichannel services = ~87 million

Homes that rely exclusively on OTA broadcasts = ~19 million

It is a no brainer to understand why the media conglomerates/networks 
are buying up cable networks. They are buying back their audience. 
But that's just the tip of the iceberg...

The conglomerates get compensation from the cable/DBS systems for the 
networks they provide. The monthly fee per subscriber for ESPN is now 
approaching $3. This is in ADDITION to the revenues ESPN generates 
from advertising.

If the networks offer more choice to the OTA audience, what benefit 
flows to them or their affiliates? Do they get subscription fees? Can 
they charge more for commercials give the fact that the audience size 
remains relatively constant? The only advantage I can see is that 
they may improve demographic targeting, which in some cases does 
support higher rates for commercials.

The only win for moving to multi-channel OTA service is IF the 
audience grows and the networks can collect subscription fees from 
OTA viewers. NOT LIKELY.

>So, as you would predict, there should be no demand for
>the extra expense of OTA STBs. But the end result, in
>Berlin and in the UK, is a renewed interest by the
>viewing public in OTA TV. Go figure. And, to add
>insult to injury, from a younger demographic than
>those who used OTA previously. Darn.

No surprise here. You pay one time for a box that delivers what you 
are already watching, and eliminate monthly subscription fees.

Regards
Craig
 
 
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