[opendtv] Re: Freeview business model

At 6:50 PM -0500 1/27/07, Manfredi, Albert E wrote:

But let's not make this business model question unique to broadcasting.
It's not. One could ask, for example, whether Craig expects to pay BE
magazine to distribute his articles, or the other way around. In
principle, he could be made to pay them. I don't know for sure, but I
doubt that's how it's set up right now.
There is ZERO difference between the magazine I write for and the commercial TV business. Both need content to attract "viewers" for the ads. Both use multiple models to pay for their content.
There would be absolutely NO INCENTIVE for me to create content for BE if I were not paid, other than the potential benefits of exposure of my ideas to the people who read the magazine. If on the other hand, BE told me that I could have 5 pages each month, and all of the revenues from any ads that I could place within these pages, then I would have an alternative method of being compensated. This is what happens with TV today:
The networks compensate affiliates today by providing a few ad positions within their programming. Stations can buy syndicated programming and sell the ads to pay for it, or they may use a hybrid where they pay nothing for the programming, which comes partially filled with ads, to which they add the rest to generate their revenue. And in some cases the stations are simply paid to run the programming (most religious broadcasts and infomercials.
The reason content networks are paying to get their content onto Freeview is obvious. They can control how they use the channel(s) and keep all the ad revenue they generate. Bottom line, if you can generate more revenue than you pay to Freeview for carriage, you should make a profit. 

Regards
Craig


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