[opendtv] Re: Reasons for rising MVPD prices
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Tue, 2 Dec 2014 09:51:19 -0500
> On Dec 1, 2014, at 8:24 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
> wrote:
>
> Regards
> Craig
>
>
>> Correct, but [Netflix] dominates video streaming. According to the
>> following report, video streaming accounts for about 39% of peak
>> Internet traffic. Social networking is second.
>
> I couldn't get that report, for some reason. Anyway, even if Netflix accounts
> for a high proportion of loading, that doesn't necessarily mean that people
> only use Netflix for streaming. For example, it can also indicate that those
> who subscribe to Netflix want a high res image, tend to have the higher
> capacity broadband plans, which results in a higher bit rate attributable to
> Netflix than to other streaming services.
The point is that there are many uses for higher broadband bit rates, not just
video streaming. And yes, while Netflix dominates that 39%, there are many
other OTT services in the mix.
For example, the Iron Bowl (Alabama/Auburn game) drew 13.8 million viewers,
including 455,000 who viewed at least part of the game on the OTT Watch ESPN
service.
> Thanks for posting some evidence.
This was the second time I posted this story. Over the period covered by this
story (since 2002) I have posted many stories about the decline in broadcast
network ratings. The fact remains that the TV audience is now quite diverse,
and MANY non broadcast programs get ratings that are higher than most broadcast
network programs. One reason for this is the content restrictions imposed on
broadcasts.
> However as is often the case, you have to read beyond the headline. In this
> (two year old) article you posted, look at the first figure. That figure
> shows that from 4Q07 to 4Q11, total monthly TV viewing per user rose from
> ~146 hours to ~160 hours. Notice how online and time shifted more than
> compensate for the loss of live viewing.
What has this got to do with the ratings for the broadcast networks? Yes
viewing habits are changing, with more time shifted viewing. But the ratings
now include this, at least for the first 8-10 days of delayed viewing. Anything
after that is interesting, but mostly irrelevant. ALL popular programming goes
into syndication, but nobody keeps track of the total number of viewers over
multiple years, or the audience that watches some programs multiple times.
What is relevant, is that the broadcast networks now make it easy to catch up
with their popular shows, whereas, in 2002 you had to wait for the summer
re-run of a show. This is a reflection of the reality that more and more
viewers will not make an appointment to watch most programming. And it confirms
what John Malone said, that we are moving to a "random access" distribution
model for pre-produced content.
> THEN, look at the last graph, which shows this much-hyped "50 percent
> collapse." What is it that dropped by 50 percent? It is "broadcast live
> ratings for 18 to 49 year olds." So as I said, I have my doubts. We already
> know that the younger generations aren't watching TV the old fashioned way,
> and that's exactly what I said was going on. These same younger folk are also
> not as keen on buying into MVPD bundles, more so this year than last year. So
> what prime time shows they do watch will skew toward the TV network prime
> time offerings.
You are clueless. Other demographics and delayed viewing did not make up for
the collapse in the critical 18-49 live viewing demographics. The point of that
chart is that despite the collapse in ratings, advertisers are willing to pay a
premium for large live audiences. This is why sports is so critical.
There is little evidence that the Millennials are still watching the prime time
network shows on a delayed basis. The live plus delayed ratings are still off
by 50% since 2002. There is some evidence that the Millennials are a factor in
binge viewing via services like Netflix.
While it is true that many Millennials are not buying MVPD bundles, you cannot
automatically assume they are watching the broadcast networks. The ratings do
not support this. And many of these Millennials are using their parents (or a
friends) authentication credentials to watch content in the bundle.
> Okay, so now we dig deeper to understand what's going on. Read this, although
> it too is from 2013:
>
> http://www.bloomberg.com/news/2013-05-14/tablets-hurt-network-tv-ad-revenue-tied-to-nielsen-rating.html
>
> Only recently have the Nielsen ratings included other than live viewing. This
> article says that CBS gained 1.5 percent viewership as of May 5, 2013,
> compared with the 2012 season. Is that a drop? Yes, ABC, NBC, and Fox have
> shown drops, as far as this article is able to say, but are they real? Read
> that article, and you will come away understanding that ratings for TV
> network programs, and all TV viewing really, do not reflect reality.
Neilsen ratings have never reflected reality. Diaries are notoriously
inaccurate. Metered households are more accurate but only measure that the TV
is on a particular channel, not who is watching...or asleep.
Obviously, Neilsen is responding and measuring delayed viewing now. Even with
this, ratings are down again this year.
Now consider this. The networks know a great deal about the audience that is
watching their web sites and Hulu. These viewers are accurately measured as
they are unicast streams. It is more difficult to know the demographics of
these viewers, but the total number of viewers is known with far greater
accuracy than anything Neilsen measures.
> Bottom line, it is not clear how much actual drop there has been, if any, of
> prime time network TV.
Sorry Bert, but the facts speak otherwise.
> Too many articles put all their emphasis on live (linear) viewing. And just
> parenthetically, the fact that tablets, phones, AppleTV, Roku, etc. etc., are
> unable to decode standard online TV streams, but instead put their own
> special demands on the content sources, means that you have to wait until the
> various sources support those devices, to get a good understanding of where
> viewers are going.
Clearly the live audience ratings only offer a glimpse at who is watching what.
They are estimates and the live audience for pre produced shows is evaporating.
The good news is that OTT services are easy to measure accurately, and
increasingly we are seeing ad money moving to these services. Unfortunately,
services like Netflix are popular because there are no ads.
> Okay Craig. Real profits, but for artificially fabricated reasons, then. Not
> profits that relate to popularity of content. Profits that are artificially
> set, thanks to enforced transmission of the content with much more popular
> content. This is not something that needs to be elaborated on. Netflix has
> profits, but good or bad, they reflect its popularity, as opposed to profits
> that only reflect the fact that it's shoved down peoples' throats whether
> they want it or not.
The number of homes that subscribe to the extended basic bundle does not tell
us anything about what they are watching. That's why we have ratings - actually
digital MVPDs do know what you are watching via their STBs. But there is no way
to measure the analog audience.
Speaking of which, a brief aside. Our family spent the Thanksgiving holiday at
a rental condo on Panama City Beach. A month earlier my wife and I stayed at a
rental condo in Destin. These rental units appear to be the graveyard for
analog TVs. The four bedroom condo we rented for Thanksgiving had 6 TVs, but
only 1 cable STB. Two of the TVs were cheap LCD panels; the rest were old CRT
displays. The MVPDs are reluctant to kill the analog tier because it is used by
so many of these old TVs.
The notion that charging a subscriber fee creates artificial profits is absurd.
The broadcast networks charge subscriber fees for the 80+% homes that subscribe
to a MVPD service. And the history of the DTV transition tells us that
broadcasters prefer for you to subscribe to a MVPD services do they can get
these subscriber fees.
>> Give it up Bert. Sports makes up a very small percentage of the
>> content in the extended basic bundle; it does get very good
>> ratings, and it does help keep people subscribed.
>
> Exactly. So give it up, Craig. It is sports that is causing people to stick
> to this "the bundle," because it is the ONLY "high value" content that is
> exclusive to "the bundle," needs to be digested live, and it is sports that
> is driving up the subscription fee the most. The reason cord shaving has gone
> up recently is specifically because these non-sports-related "the bundle"
> programs are replaceable. The trend appears not to be going away, Craig.
Your analysis is seriously flawed.
The only part that is accurate is that sports is driving up subscriber fees the
most.
Sports is NOT the only high value content in the extended basic bundle. More
people were watching The Walking Dead Sunday night than the NFL game on NBC.
And you have frequently cited the high percentage of homes that subscribe to
the bundle who DO NOT watch ESPN.
You may be content to view replacement content, rather than paying for an MVPD
bundle. About 85% of U.S. homes feel otherwise.
>
>
>> And yes, everyone pays dearly for the overpaid actors;
>
> Only if they wish to. You help pay, only because you feel obliged to connect
> to the monopolistic pipe.
Sorry Bert, but YOU are more culpable than MVPD subscribers. YOU are a shill
for the broadcast networks. YOU are trying to tell us that their ratings have
not tanked. YOU WATCH the overpaid actors on the broadcast network shows.
> The congloms ARE offering alternative distribution pipes, Craig. You cannot
> assert that these prime time network TV actors are overpaid because the
> congloms force you to pay high subscription fees.
Never tried. Just tried to point out that they are just as overpaid as the
athletes who you believe are the root of all TV evils. The congloms do not
spend all of their subscriber fee revenue on sports. They spend billions on
original the original content YOU watch.
> The monopoly you are talking about is the major league sports monopoly, which
> only makes those sports available in your "the bundle," or direct to consumer
> in some cases, at high prices. All the other examples you can give me, of
> shows made with overpaid help, can be gotten OUTSIDE THE BUNDLE, frequently
> even "free" ad-supported.
Uhhh Bert. The professional sports leagues have been feasting on TV revenues
since the first live TV broadcast of their games. The big change in recent
years is the huge amount of revenue flowing into College sports. The NFL is
still mostly available on FOTA stations.
Wanna watch the Super Bowl? No problem, it's still on broadcast TV.
Wanna watch the College Football bowls and Championships? Only a few games are
broadcast TV. Most have moved inside the pay walls. And the NCAA Basketball
tournament is moving inside the pay walls over the next few years.
> You can't win this one Craig. The facts are simply not where you think they
> are.
Yeah right.
;-)
Regards
Craig
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