[opendtv] Re: Reasons for rising MVPD prices
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 3 Dec 2014 10:15:10 -0500
> On Dec 2, 2014, at 8:40 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
> wrote:
>
> Regards
> Craig
>
>>> What has this got to do with the ratings for the broadcast networks?
>
> You have stated on NUMEROUS occasions that TV viewing in general was way down.
Sorry Bert, but I NEVER said that. Numerous studies we have seen in this forum
say it is up for most demographics. What I did say is that the ratings for the
broadcast networks have been in decline for decades, and the article I posted
said they are down 50% since 2002.
> This instead shows you that TV viewing is up. The broadcast network ratings I
> covered with another article. You should at least have read the article you
> referenced, Craig.
This did not show that TV viewing is either up or down. It showed that for one
program type - local news - the number of viewers rose after years of declines.
This has nothing to do with the number of hours of TV the average person/home
watches.
>
>> Neilsen ratings have never reflected reality.
>
> Whereas unsubstantiated and long-standing "political" positions carry more
> weight?
Irrelevant.
My opinion is no more or less valid than yours. I can produce numerous article
to support the fact that Neilsen ratings are estimates, and have often over
reported ratings.
You provide an article that is more than 18 months old, that says the Networks
are upset because Neilsen is not measuring delayed viewing, and is thus
under-reporting the total number of viewers. But Nielsen IS measuring delayed
viewing now, and the total audience is still declining according to these
numbers.
If you doubt this, please read this article:
http://recode.net/2014/05/12/nielsens-plan-to-count-tv-viewers-across-screens-faces-obstacles/
> That's funny, Craig. I voiced my skepticism before, on this count, and the
> Bloomberg article confirms that skepticism.
The skepticism you have voiced is that there has been no decline in the
broadcast network audience, and that subscribers to the extended basic bundle
do not watch anything except sports.
> Too much emphasis was placed on linear viewing, evidently because advertisers
> think, or thought, that linear viewing was the only way their ads would get
> seen. I've disputed this notion for a very long time.
Let's examine this Bert.
Advertisers are paying a huge premium for live audiences versus other places
they can put their money like cable and OTT services. Why?
The most important reason is that the live audience can only skip ads by going
to the bathroom or recording to a DVR then skipping the ads. The delayed
services like Hulu and the network sites do not allow ad skipping.
Advertisers are also very concerned about the amount of delay between the
original broadcast and the delayed windows. That is why Neilsen is measuring
live +3 days and live +7 days. Why does this matter? Many ads contain time
sensitive material about promotions, and ad rates are based on the live
audience, and now live +3 day audience. The Recode article explains:
> TV viewership on mobile devices will only be credited toward overall
> television ratings if the digital version of an episode carries the exact
> same ads in the exact same time slots. However, this may not always be
> possible for a variety of reasons.
>
> Actors, eager to control where their images are seen, don’t always agree to
> allow these promotions to appear online or on mobile devices. In other cases,
> commercial music rights haven’t been cleared for digital distribution.
>
> Networks must remove TV commercials that lack proper clearances before an
> episode can be made available in a mobile app. This blocks the mobile version
> of the show from being counted as part of its overall TV ratings, as it no
> longer mirrors the original telecast.
>
> Such mobile consumption will be tallied separately, under Nielsen’s digital
> ratings — which include digital program ratings that track how many people
> watched an individual program, and online campaign ratings for commercials.
>
Some of this is mostly of interest to the advertisers. You will no doubt note
that people are still watching a program, whether they are included in the
ratings or not.This is ALSO true for the catch up audience (more than a 7 day
delay) and any audience a program may attract when placed into syndication.
But the ad supported TV business is built around multiple windows with the most
valuable window today being live. This could change with targeted ads placed in
VOD content.
And when a program is sold to a middleman, they will either place ads in it, or
sell it without ads as individual episodes or seasons, or as part of larger
bundles like Netflix.
>
>> Obviously, Neilsen is responding and measuring delayed viewing now.
>> Even with this, ratings are down again this year.
>
> Read it again, Craig. It says: "Of the four, only CBS has drawn more viewers
> this season, a gain of 1.5 percent as of May 5, according to Nielsen data.
> ABC and NBC are down more than 6 percent, while Fox's audience has declined
> 20 percent." Which means, CBS viewership is up. Yes, an OTA network. Only Fox
> seems to be doing badly. One problem with Fox is their 8-day delay to get
> episodes on their web site. CBS has only hours of delay. Maybe that helps.
> CBS also has consistently good shows.
>
That was last season. And the networks are still experimenting with how to
serve the delayed audience.
>
> That's what I already told you. And who the h*ll cares? Even Leslie Moonves
> has figured out that this doesn't matter. I haven't watched drama shows live
> for decades, Craig. Literally. Ever since the 1980s. The live audience
> pretense is just posturing, anymore.
Tell that to the advertiser whose ads you skipped.
> You are being absurd, Craig. Read and try to comprehend. When a show is
> included in a bundle, with no opt out option, what that show charges the
> MVPD, and consequently what the MVPD charges consumers, is artificial.
> Especially so when the program channel in question is niche, not popular, and
> is included in the same bundle as addict-demanded content (aka sports). It is
> truly crazy how many times I've had to repeat this *obvious* explanation. You
> sound profoundly clueless.
Yes Bert, they get subscriber fees. That is the business model, and everyone
wants in on it. These are not fake profits - ad rates are still based on
ratings, not the number of subscribers.
The broadcast networks have a huge advantage in that they are everywhere,
unless they CHOOSE to go dark to extort higher retrans fees, like CBS just
announced for Thursday night with Dish. They are available FOTA. They are
required to be carried in cable basic/lifeline tiers. They use the broadcast
network to force MVPDs to carry lesser channels in the extended basic tier.
> Sorry, Craig. The Walking Dead is not exclusive to the bundle, and sports is
> responsible for the huge increases in fees.
The live broadcast is exclusive to the bundle, and the delayed service on the
AMC website is only available yo MVPD subscribers until an episode is months
old. The rest are premium PAID services.
> You can watch The walking Dead right after it airs, on demand, from Amazon.
> Oh well, huh?
It costs $2.99 for the HD version, $1.99 for the SD version. Apple has been
selling shows like this for nearly a decade.
> And sports IS the content that is raising "the bundle" prices at a high rate,
> as I said and many articles too, including this one from Multichannel:
Something we can agree on. Why can they do this? Because that's what people
want to watch.
>
> "If 80% of the incremental price pass-through is going to the sports
> supplier, there is very little room for inflation or budgetary increases for
> the non-sports-driven."
Depends on the service. TNT and AMC are ALSO seeing large increases. This is
just a reflection of popularity as measured with ratings.
>
>>
>
> This shows exactly what I've been telling you, Craig! It shows that any
> popular content WILL NOT remain exclusively in "the bundle," **not when**
> people are bailing out rather than subsidize the sports franchises.
Give it up Bert. There is NOTHING new about multiple middlemen SELLING the same
content after the first live performance. It is the nature of the business. If
people choose to cut the cord and wait until a show is on Netflix they are
still paying.
> And why should it? Why should these content owners sacrifice themselves for
> the sake of overpaid pro athletes?? You keep calling this "speculation," but
> here's the perfect example.
They are not sacrificing a thing. It's a win-win if they get multiple middlemen
to pay for the same content. And THEY are the ones pushing for higher fees.
http://deadline.com/2014/12/cbs-go-dark-dish-network-thursday-1201306318/
> Dish customers stand to lose access to CBS outlets in 14 cities including Los
> Angeles, New York, Chicago, San Francisco, Boston and Detroit. There’s a
> possibility that an impasse also could endanger carriage of some CW and
> independent stations and cable networks including Showtime and CBS Sports
> Network.
Bert once again tries to convince us he is the typical viewer:
> And guess what, Craig. If everyone watched as I do, the actors would not be
> overpaid, and pro athletes wouldn't either! Whereas, Craig, you are actively
> supporting both of these outrageously highly paid entertainment industries.
> Amazing how you try to twist logic and pretend otherwise.
You are just as much part of the problem Bert. You are watching the network
shows, which contributes to the audience, which let's the actors demand 7
figure salaries. The same is true for the NFL. You are not the only person who
does not watch; they can get ridiculously large salaries because of the people
who DO watch.
Taking this to the ultimate absurd level, if everyone stopped watching TV the
industry would collapse. No worries mate!
>
> Well, as sports is gradually becoming unbundled, what with some direct to
> consumer ESPN, and some direct to consumer from the leagues themselves, I
> will agree that the two types of programming will be becoming more comparable.
Earth to Bert. Sports is NOT gradually becoming unbundled. Just the opposite is
true as more and more premiere events are moving behind the pay walls.
> And, that's exactly the way it should be. There is no technical reason for
> bundling like that anymore, so it becomes ever more difficult for MVPDs, and
> content owners, to keep those reins tight. This was also described in a
> recent article I posted, which you called "speculation." Remember? Where the
> author explained how the bundle comes apart?
Yes, the technical excuses are gone. But the economic incentives to keep this
stuff behind pay walls are stronger than ever. And the author was speculating
about the bundle coming apart. It has not happened.
>
> But as of now, sports is indeed the only popular content that is mostly still
> exclusively in your "the bundle," Craig. And it causes 80 percent of the
> price increases of this "the bundle," and it keeps the profits of not-popular
> niche channels in this "the bundle" artificially inflated.
The NFL is still mostly FOTA.
And yes, the content owners will keep increasing prices.
The most significant change will be the move to random access rather than live
streams. But this will Only strengthen the walled gardens.
Regards
Craig
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