[opendtv] Re: Market forces
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 4 Jun 2013 07:53:57 -0400
On Jun 3, 2013, at 4:59 PM, "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
wrote:
> Craig Birkmaier wrote:
>
>> It's clear they were not in bed with the MVPDs, who had then,
>> and still have, a small group of captive suppliers for Digital
>> Rights Management (DRM) and STB products.
>
> This proves nothing, though. The CE manufacturers still today seem to be
> ready to roll over and do the bidding of the MVPDs. Even today, with their
> pathetic "connected TV" products. The fact that the CEA was deliberately
> trying to sabotage the one and only unwalled TV distribution medium of the
> time, favoring at best to build in MVPD-dependent technologies, knowing
> **full well** that a cable tuner and an OTA tuner share the vast majority of
> the same components, makes it really hard to swallow that they weren't
> getting kickbacks from the cable industry.
I fail to see how the CE manufacturers are rolling over on smart TVs, or that
the MVPDs have something to do with this. The content oligopoly is directly
responsible for the tactics we see today regarding delivery of their programs
over the Internet. The CE industry is desperately trying to control the
transition to OTT via their smart TVs. But they were mostly clueless, just
throwing stuff out there in hopes that they can keep Apple or Google from
taking over this business too.
It is the content oligopoly that is using the MVPDs to control access to shows
via the Internet. They are responsible for blocking Google TV. They are
responsible for requiring an MVPD subscription to watch local television
broadcasts via the Internet. This is not to say that the MVPDs are not in
cahoots; it benefits both oligopolies to tie them together to access high value
content. The MVPDs are the collection agency; they have the consumer financial
relationships, and they are willing to collect billions for the content
oligopoly, as long as they have exclusive first rights to programming, along
with OTA broadcasters. BUT, the OTA broadcasters are dispensable; the content
oligopoly can now live without them, but the reverse is not true. But the
content oligopoly cannot continue to collect monopoly rents for their content
without the willing cooperation of the distribution oligopoly (MVPDs).
Will this change?
Perhaps.
It is now possible to deliver ANY program via the Internet on a pay-per-view or
subscription basis. For example, Hulu is owned by the content oligopoly (and
Comcast which is a hybrid content/distribution play). Hulu has direct customer
relationships and billing. The fact that the congloms are trying to sell Hulu
should tell you something; they still believe that there is a lot of life left
in the MVPD model, which requires the consumer to subscribe to a big bundle of
shows from all of the content producers.
> Sorry, Craig, that's not how I see it at all. Many people, and here you're
> saying you were one of them, seemed to be promoting the absolute reliance on
> MVPD umbillicals. It seems rather obvious that the decision of how to make a
> TV set "future proof" should be left up to the CE manufacturers. Rather than
> being used as an excuse to favor one business model. The CE manufacturers
> could use software updates and they could use replaceable modules. Ditto
> today, with connected TV products.
Yes Bert, we know how you see it via your unique "Windows Media" perspective.
This should be compelling enough evidence that I am correct. The PC you had
when HD broadcasts began was incapable of running the Media Center software you
use today. The same is true for PCs that existed when most prime time
programming became available in HD in the 2004-2005.
All the new TV delivered with ATSC tuners are obsolete - entirely useless with
respect to OTT streaming, and useless with respect to the next broadcast
standard. In order to deliver Smart TVs, the CE industry is turning to tech
from the PC industry that employs CPUs and GPUs to handle decoding, rather than
dedicated MPEG-2 chips.
The MOST future proof aspect of TVs today is the HDMI connector, which allows
tens of millions of Roku and Apple TV boxes to deliver OTT video to the big
screen. It even allows you to connect that PC with Media Center.
Sometimes you are your own worst enemy in these discussions.
>
> I'm hardly the only person in the world that thinks that useless middleboxes
> become a nuisance. Lots and lots of people hung onto the cable analog
> channels just to be rid of STB reliance. One effect of having to depend on
> proprietary STBs, for example, was to make time-shift recording too difficult
> for the average joe. Oh, no problem, the MVPD will rent you that box too!
You are correct; the main reason that cable is holding onto the analog tier is
that this is how most old TVs get their signals. No need for a government
cheese box that "may" be able to receive ATSC broadcasts; and you get access to
the most of your favorite channels in the requisite extended basic bundle. And
you are correct that most PVRs are rented by the MVPDs - part of the two-way
services that they refused to let the CE companies offer until Panasonic signed
a license for Tru-2-way. Now even Panasonic has given up on working with the
cable industry.
But none of this changes the obvious reality. Putting standard compliant tuners
into TVs is a nice convenience…
Until the standard becomes obsolete.
On the other hand, a tiny little hockey puck box like Roku or Apple TV is cheap
(<$100) and these boxes are being updated every year to add new features and
services.
>> Yes a few broadcasters started DTV broadcasts in 1997-98.
>
> I think only Fox was the only 480p holdout in those early years, for prime
> time programming. The other networks went to HD prime time right at the
> start. And gradually added daytime soaps and other programming to HD.
All true, but your timeline is a bit optimistic.
HD broadcasts were limited and scattered at best. The only stuff that was aired
in HD in the early years were dramas already shot in film. The Tonight show was
an early adopter (1999). The SuperBowl in 2000 was the first national HD sports
broadcast. Soap operas were much later with the last one converting in 2011.
The first year that most pre-produced prime time shows were delivered in HD was
2004, and this did not include news magazines, or reality shows. DBS started
carrying HD in 2000; cable started in 2003.
In 2006 HDTV penetration in U.S. homes reached the magic 7% inflection point;
the following year sales increased 133% as 20% of U.S. homes had at least one
HDTV.
> I'm well aware of the fact that you were in denial of this fact back then.
The facts say otherwise.
Here's an interesting statistic that I wrote about often in those days (this
was written in Feb. 2007):
"Of the world's 48.2 million HD households, only 16.4 million have sets with an
integrated HD tuner or a HD set top box. In other words, two out of every three
have wasted the extra money they spent buying a HD set."
I don't agree with the author, as nearly 100% of these TVs has a DVD player
attached, delivering high quality wide screen movies. But HD broadcasts were
certainly not a driving factor in the early years.
Regards
Craig
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