[opendtv] Re: The rationale for retrans consent from local broadcasters

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 9 Oct 2015 01:53:52 +0000

Craig Birkmaier wrote:

You could argue that the improved modulation technology needed
was still immature, but it did not stop the Europeans. With
DVB they were able to build what eventually became Freeview in
Great Britain.

Sorry, Craig, but we've been around this circle far too many times, for well
over a decade, and you're just repeating the same words you uttered way back at
square 1. Half truths.

ATSC 1.0 is more spectrally efficient than DVB-T1 **as DVB-T1 is actually
deployed** (i.e. to have DVB-T1 achieve acceptable robustness), and I pointed
this out countless times, with sources. ATSC 1.0 offers a freeview service too,
call it whatever you like. And the bottom line is, I can receive my ~50
channels with antenna in fireplace, ground floor, no rotor, where most channels
by far come with double edge refraction (according to TV Fool), at ranges from
12 to 46 miles. None are LOS. Whereas my sister needs an outdoor antenna on top
of the building, with LOS, at much shorter range, with DVB-T1. Even though her
windows do point in the right direction, I should add. Yes, no doubt, ERP is a
big part of this. But you are very simply overstating this tired old point. I
have to repeat again and again that the norm in DVB-T countries is to have the
antenna professionally installed, otherwise, very often, it doesn't work
either. The norm here, for OTA reception, is that the homeowner is on his own.
And worse, apartment dwellers usually don't even have a building antenna system
at all. So please don't cycle back to ca. 2000. We've been over this too many
times.

Yes, it is possible to create content at lower price points. This
is still the staple of the special interest MVPD channels.

Shows with star power cost more than $1,000,000 per episode, and
the price keeps going up.

You're getting off on a tangent. When more competition emerges, as it has, even
the bloated star power programs have to regulate themselves, Craig. It's only
competition that provides the regulation mechanism, in our economy. So for
example, this article you posted:

http://www.fool.com/investing/general/2014/10/06/netflix-inc-is-paying-huge-sums-to-produce-origina.aspx

Did you read it?

"So let's bid farewell to that simple back-of-the-envelope estimate. Most of
Netflix's original shows must come with far smaller budgets than those of
Orange Is the New Black or House of Cards."

"After all, exclusive content sets Netflix and archrival HBO apart from the
commodity players in the entertainment market."

So some productions cost more than others, but they *all* generate competition
against the incumbents. Even "commodity players" generate this competition. For
example, surely you didn't miss Monty's post yesterday?

http://www.nytimes.com/2015/10/07/business/media/doubts-circle-viacom-vanguard-of-yesteryear.html?_r=0

"Now, Viacom has lost its perch amid the explosion of competition from
traditional and digital outlets, like Netflix, Snapchat, YouTube, Twitter, Vine
and Facebook."

"Another concern is that the massive wave of consolidation sweeping across
cable and satellite companies will greatly reduce the rates Viacom can charge
for its programming and even creates the potential that cable or satellite
companies like Dish could drop Viacom from their bundle of channels, since its
programming is now available on a range of streaming services like Amazon and
Hulu."

Did you get this last bit? We read an article months ago, or maybe a year ago,
that explained how this phenomenon would unfold. This is the feedback
mechanism, now able to operate to self-regulate this machine, where previously
it could not. Even ESPN is having to trim its budget, Craig.

But when people started streaming movies and TV shows things
changed dramatically. Very quickly the traffic loads increased
and balance of downstream versus upstream bits shifted
dramatically.

Come now Craig. You don't need to rehash, imprecisely, what I have covered with
direct sources many, many times. When a conflict of interest exists, given the
opportunity, companies will always respond in ways that benefit them first and
the customer second. These same companies have done so in the past, and it
became clear that this is where they were heading again.

Of course, the last mile pipe has to be neutral. And in spite of your
libertarian-sounding rhetoric, **if** we had adequate competition in that last
mile connection, for example with wireless, **then** the Title II
classification would not be as essential. Because simply, people would drop any
networks that forced its own equipment on their customers, and/or that blocked
content that was in competition with their own. That's why Title II is critical
now.

Bert



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