[opendtv] Re: News: Those licenses will soon be worthless...

  • From: "John Willkie" <JohnWillkie@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Sun, 24 Apr 2005 10:45:19 -0700

A few nits to pick:

1.  Are you saying that mobile TV is a non-issue?  In otherwords, that my
friends at Enensys won't be able to sell their DVB-H modulator (shown at
NAB) outside of r&d markets?

2.  Cable is not a direct competitor of broadcast, it's closer to say that
they mainly feed off of local tv.  To compete with local tv on a spot ad
basis, they need to drive the cost of sales/traffic and the like to
near-zero.  (One very savvy broadcast executive that I spoke to at length at
NAB is using just this exact phrase to describe how they want to sell "data"
tv advertising.)

3.  The Verizon announcement by Ivan S. at NAB is quite interesting in this
context:  they'll carry the entire transport stream of broadcasters who sign
on.  It's likely this will become the model for IPTV, and it will force
cable to carry entire transport streams if they want to keep up.

4.  I still maintain that cable TV is a transitional technology, albeit one
now with the "generic" crutch of cable modem traffic and a bit of telephone.
But, circuit switched telephone service by cable companies only exists with
Cox Cable San Diego -- everything else is VOIP.   (One can get VOIP from
ANYONE.)

5.  Satellite radio -- even Sirius -- is now a commercial medium -- see the
Martha Stewart announcement for the most recent solid announcement.  The
direct competition there appears to be local traffic and weather reports
which XM and Sirius can deliver on a low-bit rate channel devoted to single
markets.  (I love hearing the traffic reports from Boston and Baltimore.)
Some broadcasters are adapting -- Infinity's KNX Los Angeles highlights
their "expanded traffic" reports.  However, the only real way to compete is
to turn your news station into a traffic station.  (Ugh!)

John Willkie
----- Original Message ----- 
From: "Craig Birkmaier" <craig@xxxxxxxxx>
To: <opendtv@xxxxxxxxxxxxx>
Sent: Sunday, April 24, 2005 5:58 AM
Subject: [opendtv] Re: News: Those licenses will soon be worthless...


> At 11:18 AM -0700 4/23/05, John Willkie wrote:
> >One is reminded to consider what happened to the value of the (once
labeled
> >as worthless) radio licenses when TV took over.  Sure, there was a dip of
a
> >few year's duration, but when one looks at the strip chart, it's hard to
see
> >the dip now, considering the essentially contiunally uphill trend in the
> >value of radio licenses.
> >
> >As we discussed at lunch the other day: the majority of the value of
> >broadcast licenses is the programming contracts, the local content, and
the
> derived goodwill.
>
> Unfortunately, comparing radio and TV broadcasting is like comparing
> apples and orange elephants. These world have little in common, as
> one would quickly understand by listening to the radio promo ads -
> the ones that tell us that radio is the ONLY free entertainment
> medium today.
>
> The dip in radio listening was primarily caused by the migration of
> entertainment programming from radio to TV. When all of the radio
> stars moved to TV so did the audience; at that point radio had to
> evolve to find its true audience. One of the most important aspects
> of that evolution turned out to be mobile/portable reception.  While
> radio still serves fixed receivers, the major source of revenues is
> drive time, when the audience is very large. The growth of talk radio
> seems to fly in the face of the long term trends for radio, as it is
> a move back to a program format (you must tune it a a specific time)
> rather than a generic vertical market format such as rock, country,
> hip-hop etc.
>
> TV Land is very different. Back in the days when we had only 4-5
> program choices (all OTA broadcast) television thrived. But the
> ability to bypass the broadcast gatekeepers changed the TV medium
> forever. Multi-channel TV services provided something that TV
> broadcasters could not: CHOICE. And they provided something that TV
> broadcasters cannot: easy plug and play installation with a
> consistent quality of service (not as good as a perfect NTSC
> broadcast, but on average, much better than typical off-air
> reception).
>
> This works for many reasons, but one of the most important is that
> most televisions are used in a fixed location. Portability and
> mobility are possible, but not critical to the success of the medium.
> To make things worse, TV broadcasters have become reliant on their
> competitors to deliver their programming. As a result, the use of the
> spectrum for the delivery of TV programming is now a huge waste of a
> scarce resource.
>
> Ironically, technology has now evolved to the point that what we
> believed to be "the rules of the game" have now changed. Satellite
> radio is now beginning to challenge terrestrial radio broadcasts in
> much the same way that cable challenged TV broadcasts. The satellite
> services offer improved reception in areas that are poorly served by
> terrestrial broadcasts, and they offer improved choice and NO
> COMMERCIALS on many channels. Terrestrail radio broadcasters are
> responding in a highly visible way - with the PR ads about radio
> being free. But MORE important, they are responding in a competitive
> way, cutting back on the number of commercial minutes per hour.
>
> Meanwhile, the technology now exists to make mobile and portable
> reception of TV and data broadcasts both feasible and reliable. This
> represents an opportunity for terrestrial TV broadcasters to serve a
> market that the multi-channel services cannot.
>
> In the end, most of the recent criticism of broadcasting (both radio
> and TV) is centered on the business model, not the technology. Both
> media are said to be dying, because the advertiser supported model
> for paying for content is dying.
>
> I am not among those who beleive that the advertiser supported model
> cannot be sustained. What cannot be sustained is the notion that we
> must pay twice for advertiser supported content, with the ads, and
> subscriber fees as well. We are seeing a resurgence in interest in
> terrestrial TV broadcasting in Europe, when viewers are offered
> reasonable choice WITHOUT subscriber fees.
>
> ON the other hand, the USDTV model is predictably failing here in the
> U.S., just as On Digital failed in the U.K. There is little interest
> in a paid service that does not deliver sufficient choice. People who
> are willing to pay, will pay a bit more for a service that offers the
> content they want to watch.
>
> Broadcasters have lived in a world that has been largely devoid of
> real marketplace competition. They still queue up to the microphones
> to plead with the Congress critters to protect them. "Make those
> satellite radio broadcasters live up to their agreement NOT to
> provide local content." "Make the cable and DBS services carry our
> DTV multicasts." And make competitors PAY for the content that we
> offer for free to consumers who are willing to buy an OTA receiver.
>
> This is why broadcasting is dying.
>
> Regards
> Craig
>
>
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