[opendtv] Re: More on Verizon & Google

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Fri, 20 Aug 2010 07:11:20 -0400

At 5:03 PM -0500 8/19/10, Manfredi, Albert E wrote:

Would it have helped if I said "content" on the Internet?

Not really, as I went through most of that yesterday.

Where there are popular pipes there will be advertiser supported content. Keep this in mind the next time you go to the movie theater and PAY to watch a movie.

But the Internet offers MUCH MORE.

I did not even mention E-commerce yesterday.

Are E-Bay and Amazon ad supported services?

Check out this Census Bureau report:

http://www.census.gov/econ/estats/2008/2008reportfinal.pdf

A huge portion of our economy has moved to B to B and B to C e-commerce. We are talking about trillions of dollars here.

I know people pay the hookup fee, Craig. But the hookup fee is not what pays for your access the information stored in a zillion web sites, and very often not even for your e-mail service. FOTA TV doesn't need that hookup fee, at least not nearly to the extent a wired infrastructure like the Internet needs it. So you factor that element out of it, and you're left with the same mostly ad-supported model.

FOTV exists because of ads. Now broadcasters ALSO expect to receive second revenue streams from cable and DBS.

With the Internet MANY payment models exist:

Ad supported
Direct payment for content
FREE -  user generated content

And, for better or worse, we cannot leave out piracy, although this is primarily consumer rebellion against conglomerates who have used their oligopolies and the force of government to restrict access to content in order to drive up the prices.

The reality is that with a potential audience that numbers in the hundreds of millions, content should be VERY CHEAP. Think in terms of what has happened to long distance telephone rates.

Fortunately, the Internet is helping to tear down the walls that allow monopolies and oligopolies to charge higher than market rates.

A business will of course fund its web site any way that it wants. Just like the content owner of a FOTA TV program would do. It's ad supported typically, but in principle it doesn't HAVE to be. PBS is not totally ad-supported, right? The important point being, both in FOTA TV and on the Internet, the end user is not paying for every service he is using, at least not directly. The end user gets as much service as he can swallow, no change in price.

PBS could not offer the quality of content they offer today without the generous support of its viewers. PBS fund drives may not be "ads," but the net result is that there is direct payment for the content.

My point was that the Internet supports many models for the funding of content.

Delivering tradition entertainment content via the Internet is but a tiny but growing part of the commerce that exists there today.

I'm not even limiting this to FOTA TV. Even the current MVPD model, while it is a walled garden, is not a pay-per-service-used model that you advocate for TV. The fact remains, FOTA TV is as close to the Internet model as you can get for TV program distribution.

I AM NOT advocating that all TV be a pay for service model. I do support the notion that this is ONE legitimate business model. Apparently you do as well, having recently told us that you and the wife like to go the the theater...

What I said is that content must be monetized. It is not free, other than the stuff that people are uploading to YouTube and the like. FOTA TV is not free - it is advertiser supported. You pay for it at the check-out counter.

I would be perfectly happy to get an unbiased reading of what FOTA usership actually is now, Craig. Unfortunately, today's FCC need not apply for that job, as far as I'm concerned.

I think we all would like to know the real numbers. Apparently, nobody really wants to know the truth. I'd like to know how many U.S. homes don't have or regularly use a TV.

Regards
Craig


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