[opendtv] Re: Retransmission Letters Fly on Capitol Hill
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Sun, 1 Aug 2010 18:13:18 -0500
Craig Birkmaier wrote:
> Where you seem to be having problems here is with the notion that MVPDs
> are making huge amounts of money by delivering the signals of
> broadcasters. They get NOTHING. They cannot insert ads in these
> programs and they cannot put this content into a tier that requires
> additional subscription fees. And when a station negotiates retrans
> consent fees they must collect them and send the money to the station.
I guess I understand the part about the MVPD gets no ad slots, because those
presumably go to the OTA broadcast station and to the conglom. But the cable
company does get most (I assume) of the subscription fee for the basic tier,
not to mention all the other fees they charge for providing the connection.
And don't forget the subject line here. The MVPD depends on that conglom
content to keep their customers happy. They periodically jack up the basic fee,
and their customers habitually cave in. So it's not like the MVPD is a loser in
any of this.
> The notion that people subscribed to cable to get the broadcast stations
> in their market was ONLY TRUE for those who could not receive good
> quality signals off the air.
Actually, that might have been true only for a tiny minority. It's a
convenience thing, plus the fact that in the analog OTA TV days, it was very
rare that all of the OTA channels came in equally well. Usually there were a
couple, maybe three, that came in great, and the rest all had some sort of
issues. And the vast majority of households were too incompetent to even get
that much right. So cable systems, which spoon-feed their subscribers, get
people hooked long term. It made sense to get people to have NO REASON for the
antenna. The better to make them dependent. I saw this happening right at the
start, but I've always resisted any walled garden business model.
> Cable and broadcast helped each other, until more people started
> watching the cable content than the broadcast content. So now
> broadcasters want the second revenue stream too...
>
> SO THEY CAN SURVIVE.
Of course, every business looks to maximize its profits. And when they get used
to the extra revenues, it's hard to go back. Governments have the same problem.
Assume the model where all OTA nets are nationwide O&Os. Whatever compensation
goes from MVPD to the "broadcaster" is actually going to the content owner,
more like any other content provider to MVPDs. The existence of the OTA station
is a decision only for the conglom to make. The advantage to the conglom is
simply to get a bit of his content out to those, like me, who resists being
suckered into walled garden business models. Ad slots would go to the conglom
and to the MVPD. OTA stations could be operated very efficiently, remotely,
similar to the Euro system.
This could happen, if Congress stopped assuming that OTA stations themselves
today create the content they air.
> It has everything to do with the deal between the government and the
> broadcasters. Content was and IS the product that causes people to use
> the service. For decades broadcast was the ONLY viable way to deliver
> content to the public, and the politicians protected this business
> because it was ALSO the best way for them to get face time with the
> public.
Not very convincing. Politicians may have a deal with broadcasters, but the OTA
aspect is mostly immaterial. Politicians in reality have a deal with a few of
the MVPD content providers. If that OTA station disappeared, the poltician
could tie the requirement onto DBS providers, and get to cable that way. Or
even force cable providers to carry important political events, using some sort
of eminent domain clause. Besisdes which, the majority of MVPD subscribers
would want that content ANYWAY.
Bert
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