[opendtv] Re: Is 'Fair Use' in Peril?

Craig Birkmaier wrote:

 > Congress does not need to mess with this - but they may try. This is
 > a classic case of a new technology causing disruption of a legacy
 > market. The marketplace will deal with this.

I don't really expect Congress to mess with this either but I've been 
surprised before on the DMCA and the Broadcast Flag.

It would set another bad precedent of legal limitations on what a 
consumer can do for convenience in their own home, for the benefit of 
someone's existing business model. And it would do this in such an 
obvious fashion that it would probably not be politically expedient.

More likely pressure will be put on cable companies and PVR 
manufacturers to limit commercial skipping, informally implementing 
Bert's idea of fast forward but no automatic skipping, though the hacks 
will continue to mysteriously leak out.  The actual speed of the 
skipping will be negotiated between consumer and advertiser complaints. 
  For instance my Tivo could skip at 60x but I think my current Comcast 
HD PVR can only do about 15x, which is way too slow for me. 
Incidentally, there is already a remote control 'hack' to implement 30 
second skip on my Comcast box.

Everyone will probably decide to politely overlook those with home 
HTPC's that find ways to bypass the broadcast flag and implement pretty 
much whatever they choose.

- Tom



> At 4:59 PM -0500 12/3/04, Manfredi, Albert E wrote:
> 
>>Craig Birkmaier wrote:
>>
>>
>>> Bottom line, it is EASY to demonstrate that direct
>>> sales revenues are already far, far greater than
>>> the revenues after the direct sales period for
>>> theatrical and certain kinds of TV releases (e.g
>>> the episodic programs created for paid services
>>> like HBO and Showtime.
>>
>>Sure, for certain types of content, as you list. But
>>not for typical broadcast fare, I wouldn't think.
>>For example, are direct DVD sales of West Wing
>>making NBC more revenue than the weekly broadcasts
>>do? I expect not.
> 
> 
> Correct. For these kinds of programs direct sales are still a less 
> important factor that revenues from syndication, which typically are 
> larger than the revenues generated from the network runs. Of course, 
> this may not be true for series that flop, and thus are not 
> attractive to the syndication market - these are just money losers.
> 
> 
>>I understand your idea of the waterfall (from
>>direct sales to broadcast distribution, in that
>>order of precedence). But that doesn't really change
>>anything about whether Congress should or should not
>>allow wholesale zapping of ads.
> 
> 
> Your premise in this discussion was in essence: "if paying for 
> programming by inserting commercials becomes ineffective due to 
> commercial zapping, how will the content be paid for?"
> 
> The point of my responses is that alternatives to advertiser 
> supported programming are already commonplace; consumers have 
> demonstrated their disdain for commercials by paying directly for 
> content. If you doubt this, just add up the revenues from 
> subscriptions to multi-channel services and packaged media. The total 
> is significantly larger than the combined revenues of U.S. networks 
> and broadcasters, which account for just a bit more than 25% of the 
> money consumers spend on theatrical and television entertainment 
> annually.
> 
> Here is a source for the revenues I am using to come up with this statistic.
> 
> http://www.plunkettresearch.com/entertainment/entertainment_statistics_1.htm
> 
> Broadcast radio - $14.87B
> Broadcast TV - $37B
> Cable subscriptions including PPV and Premium - $43.5B
> Theatrical Box office - $9.3B
> Sales and rentals of packaged TV/Film programming - $23.8B
> Sales of packaged audio - $9.1B
> Concert revenues - $2.5B
> 
> Total revenues ~$140B
> 
> As this relates to potential Congressional action regarding 
> commercial zapping, it is clear that this would not have a huge 
> impact on the market; we have already established the fact that only 
> a small percentage of commercials are zapped. Forcing people to watch 
> commercials is not likely to drive more revenue into this channel of 
> distribution. Just the opposite could be true if consumers react by 
> moving their entertainment expenditures to alternatives that are not 
> filled with commercials.
> 
> I think it far more likely that advertisers will be the ones calling 
> the shots here. I would also note from the source cited above that 
> total annual advertising expenditures are about $266B, thus ad 
> supported TV represents only about 14% of total advertising 
> expenditures.  Advertisers will move their money where it provides 
> the best return on investment. As this relates to this thread, I 
> believe that the PVR and related technologies will cause advertising 
> to change. The money will move to new forms of ads that are less 
> intrusive, while simultaneously being more targeted to the needs of 
> the viewer.
> 
> Congress does not need to mess with this - but they may try. This is 
> a classic case of a new technology causing disruption of a legacy 
> market. The marketplace will deal with this.
> 
> Regards
> Craig
> 
> 
> 
>>> I think this has already happened Bert. There are
>>> MANY ways to buy content directly today. 85% of
>>> the country pays for a multichannel advertiser
>>> supported TV service, and about 30 % pay for premium
>>> channels.
>>
>>> Now people are paying about $10/month for satellite
>>> radio. The PRIMARY motivation to date has been to
>>> avoid ads.
>>
>>That won't last. Just as cable TV had to add ever more
>>ads, to show an increase in revenues without simply
>>jacking up monthly fees, I will predict the same will
>>happen to satellite radio.
>>
>>What matters in all of this is that *even* for
>>subscription media, the advertizing model has to work.
>>
>>I don't expect that Congress would allow people to
>>create ways to bypass the checkout counter in your
>>local Giant Food supermarket. *Even if* the
>>supermarket were on the decline as a way of selling
>>food, I seriously doubt Congress would permit people
>>to develop ways of walking out without paying. (Please,
>>no outbursts about food stamps.)
>>
>>Bert
>>
>>
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