[opendtv] Re: Malone Takes Global View on Cable | Multichannel
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Tue, 2 Dec 2014 10:11:11 -0500
> On Dec 1, 2014, at 8:57 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
> wrote:
>
> Thanks for finding this article, dated today I should add. But honestly, it's
> surprising that Craig thinks he's been saying this all along?
We can depend on you Bert, to be surprised.
>
> What Malone is telling us, Craig, is that the high and increasing price of
> *sports* is spelling the death of this "the bundle" model. He is saying that
> "the bundle" programming will instead be made available on demand,
> separately. This is what "I predict that that model will change over time
> ..." means, Craig. You will note, he is NOT saying that content from "the
> bundle" will never be made available outside "the bundle."
>
Pure speculation on your part.
> Read this:
>
> "'I think you're seeing increasing friction because of the price pressure on
> content,' Malone said. 'So much of the oxygen has been taken out of the room
> by sports and the rising cost of sports that it's putting pressure on
> distributors who are trying to control costs wherever they can and are likely
> to put more pressure back on the weaker suppliers than the ones they would
> like to retaliate [against], but they can't.'"
>
> And,
>
> "If 80% of the incremental price pass-through is going to the sports
> supplier, there is very little room for inflation or budgetary increases for
> the non-sports-driven."
No one is arguing this Bert. The non sports content is not as attractive as it
does not require an appointment - consumers prefer to watch this content on
demand. But the fact remains that the content congloms are demanding higher
fees for their packages of channels based on the popularity of a few of these
channels.they are not backing down and saying to the MVPDs that they can drop
the weaker channels.
>
> What is not explained clearly here is that the alternative to "the bundle" no
> longer needs to be linear distribution of content through a monopolistic
> delivery pipe. Since these other channels, stifling in "the bundle," are
> usually better viewed on demand, and since a (hopefully) neutral Internet now
> exists, that's where this non-sports content is heading. Many other articles
> seem to assume that "unbundled" equates to "OTT distribution."
Agreed. I've been saying this for weeks. But "unbundled" DOES NOT equate to OTT
distribution. The most popular OTT distribution is still bundles like Netflix.
And there are good reasons to believe that the extended basic bundle is moving
to the Internet (Sony, Dish, etc). What is changing is that the channels in
these bundles are moving to VOD (random access) rather than live streams. The
live streams may still exist during the transition, but eventually programs
will be released like movies for VOD consumption.
In fact, this has already happened.
Netflix announced today that the third season of House of Cards will be
released February 27th.
No doubt many viewers will binge view all 13 episodes by the end of February.
Regards
Craig
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