[opendtv] Re: News: NBC chief says Apple 'destroyed' music pricing

That's an interesting point, Craig.  One key difference is that most
airlines (the least profitable ones) have union contracts, and cable
companies have -- more and more -- replaced employees with subcontractors
that wear their uniforms and answer their telephones.

It doesn't seem to go very far, since the major cost of airlines is fuel and
empty seats, and the major cost of cable seems to be debt financing.  Fuel
varies in price more than financing.

Southwest Airlines is an outlyer; they lease planes, have union contracts
and are usually profitable.  Hard to find a similar case in cable.

However, whether they know it or not, it's very important for any business
to generate profits.  Imagine what happens when you are just making do on
cash flow, and then the regulator rears up it's head, eats your breakfast
and lunch, and then your creditors get dicey about your ability to repay the
debt.

It's not unlike the situation that faced Western Union a few decades ago.
They were the alpha dog in the communications business. Now, it's a way to
send money using other people's telephone lines.

John Willkie

-----Mensaje original-----
De: opendtv-bounce@xxxxxxxxxxxxx [mailto:opendtv-bounce@xxxxxxxxxxxxx] En
nombre de Craig Birkmaier
Enviado el: Sunday, November 11, 2007 7:09 AM
Para: opendtv@xxxxxxxxxxxxx
Asunto: [opendtv] Re: News: NBC chief says Apple 'destroyed' music pricing

At 9:42 AM -0800 11/8/07, John Willkie wrote:
>"Their balance sheets show a tremendous amount o debt and a negative net
>worth. Their operating statements usually show a negative profit"
>
>Very funny that.  I've been saying the latter (using direct language, no
>holdouts "No cable company has ever shown a profit" for years, yet you have
>pushed back on that.  Now, you quote something much worse: negative net
>worth.
>
>(This is why they don't 'compete' with broadcast stations: they can't
afford
>to actually create programming, and all but the smallest broadcast stations
>DO.)

It is NOT important for the MSOs to generate profits. They are just 
the conduit, billing and customer service end of the industry. Their 
real value is the generation of massive cash flow - about 35 billion 
per month. That's a hell of a big "float" to manage.

The real profits are taken out in other areas, especially the cable 
networks. This is not unusual. Most of the profits in the airline 
industry flow to the companies and individuals who own and lease the 
planes back to the carriers...

Regards
Craig
 


 
 
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