[opendtv] Re: News: Disney Open to Basic-Cable-Network Buys
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 31 May 2008 08:30:14 -0400
At 5:18 PM -0400 5/30/08, Manfredi, Albert E wrote:
Craig Birkmaier wrote:
To start with, what is a content stream? None of the cable
networks you mentioned are content streams.
I'm saying that Disney is not looking to buy cable systems. It is only
looking for access to nationwide 24/7 distribution of specific content
they control and/or own, on BASIC CABLE tiers. On this, I think we
agree.
Thanks for the clarification. We do agree.
In the cable and DBS distribution markets, only Time Warner has
owned both the pipe and some of the content, and they just spun out
the pipes. I guess you could say that Disney, GE, Viacom and Fox are
also in the "broadcast pipe business," but this has more to do with
legacy considerations than any other reason. As Disney indicated,
they are not interested in owning more TV stations.
The "many liabilities" with OTA, that you mention, are liabilities the
FCC should be dealing with, if it has any interest in maintaining an OTA
network in the good ole USA. Matter of fact, didn't the FCC get all
upset EVEN WITH CABLE when the Janet Jackson wardrobe thing happened?
Basic cable and OTA are about the same thing, as far as the FCC is
concerned. They even mentioned it at the time, if you recall. The
audeinces for basic cable are to be "protected" the same as OTA
audiences.
The FCC is dealing with the content restrictions. In a perverse way,
they are forcing the media conglomerates hands and accelerating the
demise of OTA broadcasting. They have tried, with little success, to
regulate cable content.
The FCC got upset with CBS about the wardrobe incident. I do not
believe that you can find ANY examples of the FCC imposing fines on
cable networks that consumers pay for. Their authority to regulate
content is ONLY over OTA broadcasters. This has not stopped them from
using their bully pulpit (or Congress for that matter) to try to
impose restrictions. Most of the push for cable ala carte is related
to the desire to allow consumers NOT to receive (or pay for) content
that is deemed objectionable.
In this I whole heartily agree!
I object to paying subscriber fees for channels I do not watch, and I
REALLY object to helping the media conglomerates proliferate content
that I find objectionable. But that's exactly what has happened
thanks to the absurd notion that everyone should pay for all extended
basic channels.
"So they can accumulate audiences" is all that matters. If they
accumulate a few more audiences with an efficient OTA network that
behaves like basic cable, why would they give that up? The reason they
lose interest in OTA is that they are not allowed the same control as
they can get from their "leased" MVPD pipes. That's all.
To do that they would need to have at least 20 to 30 MHz of spectrum
in every market. Basic cable now delivers at least 60 channels in
most markets - to equal that broadcasters would need to allocate
about 0.5 Mhz per channel IF they could accumulate 30 MHz in a
market. And then there is the minor issue of building a billing and
customer service infrastructure, or make the service free and lose
all the subscriber fee revenues they now collect from the
multi-channel services.
Obviously this can be done - e.g. Freeview in the U.K.
But it will not happen here for the reasons stated above, AND because
cable and DBS may become irrelevant within a decade as the
conglomerates move to direct distribution via the Internet.
Disney only has 10 O&Os? Wow. If they aren't interested in
owning a potential nationwide distribution OTA plant, I'll bet
someone else would be.
Can you name anyone?
Sinclair? Disney?
I don't get it. If Disney does not want more stations, why would that
want to own more than 150 to get a national footprint?
And Sinclair? Sorry, but the economics do not add up.
I talked with folks at Sinclair at NAB. The big problem with
broadcasting today is that capital has dried up. You just saw that
Pappas took a bunch of stations into bankruptcy because existing
financing was pulled from them. You can look for more of this in the
next few years as the conglomerates pull the plug on OTA.
In short, you enjoy repeating that "OTA is dying," but at the same time,
you go in assuming that what is strangling OTA TV must continue to
exist. This isn't chipped in stone. It's up to the FCC to adjust its
rules. Michael Powell was entirely on the right track.
This is well beyond the power of the FCC to do anything about. The
good news is that as broadcasting goes down the rationale for closing
down the FCC will improve.
And there is more good news. As the congloms migrate to Internet
distribution they will be challenged by small independent producers
who can also go direct to the consumer, rather than being forced to
distribute their content through the existing gatekeepers.
Regards
Craig
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