[opendtv] Re: So Soon? Next-Gen Broadcast TV In Works | TVNewsCheck.com

At 5:44 PM -0500 5/1/11, Manfredi, Albert E wrote:


You're right!
That figure represents the fraction of stations that are equipped to source their own HD ads, not the fraction of ads they transmit in HD. But it has increased from 13 to 17 percent in just one quarter. Not like the percentage is on its way down. So they are investing, just not as fast as the buying public is buying HD sets. (Interesting change from when you were claiming HD is a niche market, though, I must say. I guess coming or going, you're going to find fault, eh?)
NO. It represents the percentage of stations that can run an ad in HD from ANY source. Most ads are not produced by the stations. Thus there is a hierarchy of capabilities:
1. Pass through HD ads embedded in HD programming - most stations can do this, but there are still some independents that offer NO HD programming of any kind.
2. Insert HD ads into network, syndicated and local programming (this does not require HD production capabilities).
3. Create HD programming and ads. (ironically this is not very difficult or expensive - the total cost to shoot and edit in HD is now less than $20,000.
And this is not about finding fault Bert. It is about broadcasters investing in their future. Apparently they do not believe that the investment will produce a decent return, or they simply cannot afford to move to HD. I suspect it is a little of both. 




 What we are seeing today is nothing more than the normal end of life curve
 for a mature industry. The network affiliates in larger markets are still
 VERY profitable; independents in these markets are struggling. Network
 affiliates in mid sized markets are still profitable, but independents are
 mostly losing money. And affiliates in smaller markets are struggling -
 some are still profitable, but many are losing money, and independents are
 losing money.


Too much misplaced high drama, Craig.
NO. just a realistic explanation of what is happening to the television broadcast industry in the U.S.
I guess I've never understood why you find this so hard to accept. To me, it's entirely obvious that the TV stations that do well are going to be those that are affiliated with a TV network. Because, simply, the TV networks are those with the content people want. And TV is a mass-market medium. To a European, who sees almost entirely nationwide TV networks, from TV stations that operate mostly as relay stations for the nationwide TV networks, your fretting about the viability of independent stations must seem truly odd.
There are many network affiliates that are not doing well. I agree that the independents will be the first to pull the plug (that is to take the FCC offer for their spectrum). But you will also see many network affiliates in smaller markets take the money too.
After that it will depend on what the media conglomerates do to survive. They will keep broadcasting in larger markets as long as this remains profitable. But they could easily decide to cut out the broadcast middlemen and take all of the MVPD subscriber fees... 

Until the MVPD business model implodes...
Whsaty I do not see is any real effort by broadcasters to develop alternative business models that are not dependent on the media conglomerates.
And more. Since I've long believed that the FCC's national caps should come off, those affiliated stations in the smaller markets that are struggling could be made to struggle less, if they operated more like their Euro counterparts. Set them on "remote control" for the best part of each day, and introduce at most a 30 minute local news and weather, each day. And even that much local content may not be needed from the smaller stations in these markets. 

It ain't gonna happen Bert.
Advertisers are not looking for large anonymous audiences as they once did. They are interested in targeting specific demographics groups and will increasingly move to ads that target individuals that they can track. And as the technology matures many ad dollars will move to location based ads that can stimulate real-time purchasing behavior.
Shot gun advertising is going to be replaced with verifiable and measurable advertising.
Honestly, as many times as we have seen how the MVPDs are begging to be able to carry TV network content from far-away sources, rather than the local affiliate, as many times as you have complained about retrans consent and must carry rules, I cannot understand why it's so hard to see that the same model would work in the OTA pipe.
They only want to carry distant signals for one reason: leverage in retransmission consent negotiations. If broadcasting dies entirely, it could be resurrected as a national service, but broadcasters will hold onto the market-based model until the bitter end. Remember, cable is also market based, but with much finer granularity.
How many MVPD subscribers care whether their Food Network channel comes from a local affiliate, with local ads and local weather? What makes anyone think people want their CSI and NCIS to come from a local affiliate?
It is not about what the subscribers want. It is what the business model dictates. Subscribers would like ala carte; they have very little allegiance to local broadcasters. That being said, they still want ads to be relevant - advertising a restaurant or a specialty store/service in a city 200 miles away is not relevant.
So I don't buy your pessimism. You are going to respond that the TV networks prefer people to get hooked to an MVPD. And I am going to counter that the TV networks are not so dumb that they are ignoring the cord cutting phenomenon. 

You already identified the real problem Bert.
"What makes anyone think people want their CSI and NCIS to come from a local affiliate?"
They don't care. Those who still watch these programs now expect unfettered access to these programs - if they miss the first run on broadcast they expect alternatives: 

Cable/DBS VOD
Netflix
iTunes
Hulu
Seasons on DVD

And this list is still growing.
Live programming like sports (and American Idol) will still attract real-time viewing audiences...until these events can be streamed to everyone. 

Regards
Craig


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