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

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 5 Oct 2015 01:10:50 +0000

Craig Birkmaier wrote:

Prior to the 1992 Cable Act the broadcast networks "could" have
cut the cord with cable. In a true marketplace they could have
refused to support cable, promoted the use of antennas, and
created a new DTV standard that would have offered vastly
improved reception and the capacity for more "channels."

They "could" have done any number of suicidal things, Craig, but it wouldn't
have made economic sense. The broadcasters took the correct route, which was to
make their content available on all of the TV distribution media that people
were using. This has nothing to do with politicians, Craig. Or at least, you
don't need mention of "politicians" to explain why it made sense for
broadcasters to want their signal on all TV media. That's where your arguments
fall apart.

The series of NYTimes articles that Monty posted provide a good
overview, and solid support for most of the positions I have
taken that you disagree with.

Fact is, Craig, aside from the first article in the series, that I commented
on, the others I can fully agree with.

First example. One of the articles talks about the growing number of high
quality TV series available now. Which totally undermines your idea that we
have this content "oligopoly" you insist on. The only reason we have the
growing number of competing options is that we have the open and
mandated-neutral Internet, over which "anyone" can create and distribute
content. And conversely, were the Internet NOT mandated to be neutral, the
cable companies could simply re-create the old MVPD model over the Internet. Oh
yeah, even *that* last point was explicitly mentioned in one of the articles.

Another article talks about how even after the neutrality mandate, the cable
companies are doing well. And why shouldn't they be? They have a critical role
to play. And it even debunks your notion that their capital investments have
gone down. Or rather, yes, they have gone down, but only because those capital
dollars were previously being wasted on proprietary STBs. The article debunks
the notion that the cablecos are not investing in broadband.

The politicians, and the content oligopoly

You really need to get off this old saw, Craig. It's sounding more and more
like adults talking in Peanuts cartoons. Netflix, the service, and Netflix, the
creator of new original content, have absolutely NOTHING to do with
"politicians." Ditto Amazon, and all the rest. They don't air political ads,
nor debates. Whatever they might do with politics is because they figure it
would make money.

But the cabled MVPDs do have franchise agreements, contracts
with content owners, and local, State and FCC regulations they
must obey.

And yet, didn't we see that at least one small rural cable system dropped all
"TV channels" completely? And went broadband only? So the reason cable systems
continue to provide the legacy MVPD model of service is because it's still
lucrative for them, even if on the wane (as one of the articles mentions).
Because many people are, literally, afraid to cut the cord. I know, it seems
pathetic, right?

The lack of competition is created by the non-competitive
delivery pipes far more than by the number of competing
content owners.

Not just my opinion. It was strongly re-enforced in the
NYTimes articles.

False. On the contrary, this is how that point was made:

http://www.bloombergview.com/articles/2015-09-17/it-s-still-pretty-great-to-be-a-cable-company

"The cable channels' lucrative revenue mix of subscriber fees and advertising
is showing the first signs of erosion as viewers cut the cord and get their TV
through streaming services. The sudden realization of this occasioned a stock
rout."

"A likelier explanation seems to be that providing broadband connections
remains a good business with potential for growth -->**even if you don't get to
pick and choose who delivers TV, movies, games and other content over your
pipes**<-- (which is what the FCC was trying to prevent with its net neutrality
order)."

"Fast connections to the Internet are likely to keep growing in value. Which is
why, even if the cable era is ending, cable operators still have a future."

Gee, I could have written that, eh? This, coupled with the other article about
the growing number of TV series, thanks to multiple new Internet-based sources,
exactly contradict your notions of "oligopoly" and that MVPDs aren't changing
in major ways. You got stuck on the fact that "cable is still good business"
without reading the fine print.

The only significant change noted in this article is that the
MVPDs may lose control of the lucrative STB franchise as Apple,
Sony, Google and Amazon reinvent the front end to the TV.

Maybe Craig is just starting to get it?

Bert



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