[opendtv] Re: News: The death of Cable TV

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sun, 31 Oct 2010 16:11:32 -0400

At 4:52 PM -0500 10/29/10, Manfredi, Albert E wrote:
I'm thinking that in an a la carte environment, must carry and retran consent would both be in jeopardy. Subscribers would start demanding that they only pay for what they want. Since broadcast networks are now demanding a piece of that subscription fee, I think this whole basic tier arrangement can't be assumed to be immutable.
You might be right. There are certainly services that are "must have," and others that are not worth paying for, BUT would still get a significant number of viewers if they were part of a "basic free" tier.
Remember, in most of the rest of the world content providers are PAYING to get their content on free OTA services. With ala carte, I expect that the same thing would happen here as "2nd tier" networks would choose to stay on the basic tier (without subscriber fees) rather than takng their chances with "opt in" fees. 




 The problem would be for the stations demanding Retransmission
 Consent payments. Could a customer elect to NOT receive a broadcast
 signal, the carriage of which is mandated by the government?
Well, as you also noted, DBS certainly has that precedent. I don't see why things couldn't go that way for cable too, especially considering this FCC's attitude toward OTA broadcasters.
The key here would be if a station demanded carriage fees, as ALL major networks affiliates are doing today. If you force the viewer to pay, then they should have the right to say no; today they must either pay for the entire bundle or reject the entire bundle. 


 Are you saying that these small cable networks could not survive
 without subscriber fees?
Well, Craig, you have certainly said that on very numerous occasions. You keep repeating to me how subscription fees are the reason why cable has so many niche networks, and why they are not available FOTA. Are you changing your tune now? If you are, then I assume you have rethought your predictions about at least SOME of these programs being made available FOTA.
I think you are twisting my reasoning. In a world where subscriber fees are a given for non broadcast networks, any broadcaster would have to match the dual revenues these networks are getting today. This is what the congloms are relying on; they can retain complete control as long as they can force people to pay for bundles of content, with many networks they DO NOT watch.
In a world where viewers could choose whether to pay or not, I believe many of these networks would drop subscriber fees to stay on a basic free tier. And if they dropped their subscriber fees, broadcasters would be in a very good position to compete for the right to carry these networks.
SO yes, I believe that with ala carte, we would see many programs that are exclusive to the MVPDs today become available in broadcast multiplexes. 

But first we need to end the anti-competitive bundling.
So yes, given that these small nets depend on subscription fees, in an a la carte regime, they would lose most of their viewers. Now they can at least pretend that channel surfers fall on their material occasionally.
It's not just pretending. Niche content DOES appeal to niche audiences. What makes the current system inequitable is that everyone pays for stuff they don't watch. One could argue that this is a good thing for the little guys, and that may be true. But it is a GREAT thing for the big guys, who are raking in "real money" from viewers who DO NOT want to pay for that content. 



 > So the real question is: would the people who really want a niche

 network be willing to pay more to keep it afloat?
Bingo! You have arrived at what I've been saying from the start. Cable will end up costing more for the amount of programs you receive.
Perhaps. That is certainly the argument that the MVPDs are making. And that argument is re-enforced by the fact that in a home with many occupants (say a family with 2-3 kids) each family member may watch a different set of their favorite 10 channels.
BUT. IF we could assume that people would be willing to pay what they are paying today, then it becomes an issue of redistribution of all of the subscriber fees, based on the popularity (ratings) of each network and program on that network.
It is very easy to use scare tactics to block changes to a highly profitable business model. One must ask what the MVPDs are afraid of. I believe they are afraid that ala carte would SIGNIFICANTLY reduce the amount paid by each subscriber each month... 

Regards
Craig


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