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

  • From: Albert Manfredi <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Sat, 10 Oct 2015 19:47:37 -0400

Craig wrote:

USDTV was not freeview. It was, instead, another subscription service.

As was OnDigital when the service launched in the U.K.

Ondigital went under just as USDTV did. But the US OTA option is very much like
Freeview, in fact. When you have cable and DBS competition for subscription
services, an OTA variant simply doesn't go far enough. I doubt the failure
could have been avoided in the longer term, if only for *a* particular reason.

What Bert is missing completely is that U.S. broadcasters had the opportunity
to compete with the rapidly growing cable industry in the early '90s rather
than choosing to join, then take over the MVPD industry using retransmission
consent

No way, in short. What Craig fails to understand is that in the era of
one-way-broadcast only, if you're going to dive into the by-subscription-TV
model, a handful of extra channels only simply don't cut it. Not long term.
That's what makes this OTT era so different. The new option offers far more
choice than the incumbents, not less, and the content is from competitive
outlets, available to everyone.

IMAGINE what could have happened if U.S. Broadcasters had decided to withhold
their content from the cable industry and developed/purchased all the
channels
they now own - i.e. 90% of what we watch in the U.S.

First point: *If* station groups had had the option of growing to nationwide
footprint, *maybe* these would have been big enough to afford to buy a conglom.

Second point: *If* six station groups, or whatever relatively small number, had
each bought a conglom, *then* we'd be right back where we are now. Imagine
*that*, Craig.

Do you honestly expect the Internet to change the tactics the media
conglomerates have used to maximize their profits?

It already has changed their tactics, Craig. Just as the article from many
moons ago explained.

In light of what I wrote above, it should be obvious that broadcasters COULD
have developed a new digital transmission infrastructure that would have been
competitive with cable.

Your vague words don't convince, Craig. OTA broadcast would always be at a
disadvantage compared with cable broadcast, simply because each OTA market gets
less spectrum than what a walled-in cable system can use. To become
competitive, the infrastructure cost for OTA would have become too expensive
for FOTA service. It would have required, for example, a switch to a 2-way
cellular system. Then yes, absolutely, the broadcasters could have pooled their
resources and created a better by-subscription MVPD. But as long as they stay
with broadcast-only, the spectrum disadvantage cannot be ignored. We've been
over all of this many many times. Your vague words don't convince, because they
have no technical backing. They're just words.

And for some strange reason you believe that the Internet is going to change
this situation?

It already is, but as usual, Craig, you do not see trend lines. You fail to
grasp change as it's happening, and instead, you insist on repeating the status
quo in this instant in time. You know, HDTV is a niche service.

At best we are likely to see a 30-50% drop in the cost of MVPD services, due
mostly to the monopoly pricing of MVPD STBs and the glut of channels we pay
for
but do not watch.

Stuck in the past. You're going to see a migration to OTT services, Craig. With
the MVPDs morphing into OTT sites. The MVPDs won't just cut prices. That would
just drive them under. They have to reinvent themselves.

This is where we disagree, and the stats support my arguments. Live/linear TV
is not dying;

Your stats only support a snapshot in time. As of this instant in time, many
are still connected to broadcast-only distribution media, and few have
streaming access to their big screens. So sure, in this instant in time, when
asked, they still use what they have installed. So what? When people use their
mobile devices to watch TV content, the vast majority are already watching on
demand. It should be obvious that when their big screen is connected for easy
online content retrieval, that's what will get used.

Luddite old timers are slow to change, no matter what the subject matter. But
this is where TV is headed. The stats prove THAT, big time. In the US, the
MAJORITY of TV content is already being watched on demand, and whether you like
it or not, the fraction of this on demand viewing is rapidly going to online.
If DVRs are still used a lot, it's simply because THESE FACILITIES HAVE ALREADY
EXISTED. They are in place today. In time, rapidly, the trends are too obvious
to miss.

Social networking is keeping people, especially Millennials, connected to
live
linear TV.

You even forgot this part. Social networks also work with on demand viewing.
The linear TV aspect is ONLY BECAUSE IT'S ALREADY THERE. Not because it's
preferred.

And that will put DOWNWARD pressure on the price people are willing to pay
for ESPN.

Why?

Many reasons. For one, the competition only succeeds if it makes its price
attractive. Meaning, lower than ESPN. For another, the competition might offer
more focused packages than the ESPN choice, so people with particular interests
only buy what they really want, rather than the whole enchilada. So ESPN has to
respond to this, Craig.

That's basic Economics 101.

And sure, the hopeless addicts continue to pay more. But the stats show that
many who were previously forced to pay ARE NOT the hopeless addicts you think
they are, so they have been bailing out. Trend lines, Craig. Not just snapshots
in time.

Bert

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