[opendtv] Re: Unwrapping the Cable TV Bundle
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Mon, 05 Oct 2015 22:40:06 -0400
On Oct 5, 2015, at 9:05 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
Craig Birkmaier wrote:
For months I have been saying that there will be less channels -
that the hundreds of "rerun" channels are no longer needed in
a world where content libraries can be accessed on demand.
Because, just like the author of that article, you only think in legacy
linear-channel MVPD terms. The concept of "bundles" is what's changing, not
the fact that they might or might not have fewer channels in them. Dwelling
on the legacy "bundle" formulas, and how many "channels" may or may not
remain, is so yesterday.
Only in your mind. You refuse to acknowledge that Sling is a MVPD bundle. But
that is exactly what it is, just with far fewer channels. I'm not dwelling on
the legacy bundle - I'll switch to a slimmed down bundle delivered OTT when
someone offers the sources I watch.
Bottom line, as Moonves said:
“The days of the 150-channel universe in the home, while not necessarily
over, are changing rapidly,” he continued. “There’s going to be people who
are going to be slicing it and dicing it in different ways.”
Bert continues:
We've been here already. Think in terms of technology. "Channels," and
"bundles of channels" were the only way to get TV content distributed, once
upon a time. It is not the only way anymore. It is a very limited technology,
being replaced by something much less limited.
It has not been the only way to distribute TV content for a very long time, as
the "1985" article pointed out. We just don't need to go to a store to buy or
rent the content; we subscribe to Netflix to supplement the bundles of live
linear channels which are still the way most of us watch the majority of TV
content.
The Internet is not going to eliminate bundles of live linear channels. The
bundles are migrating to the Internet. What is changing is that we are no
longer tethered to a cable or satellite dish. With TV Everywhere we can access
the live linear content anywhere on mobile devices, and it is now possible to
access content libraries on demand as part of our MVPD subscription.
Used to be, 200-channel systems were huge. Even after recorders came on the
market, where one could hope to extract some meaningful benefits from these,
it still pales compared with how much TV material can be made available now.
The punchline should not be that slimmer bundles will be created in the
future. The punchline should be that bundles of linear streams are being
replaced with content libraries, and these are from a potentially huge number
of competing sources, not just the one.
You still don't get it. The reason for hundreds of channels was to provide
access to library content. You are correct that this only provided access to a
small portion of the program inventory, and was appointment or channel surfing
driven.
Slimmer bundles are happening because you don't need hundreds of channels to
deliver the relatively small amount of new content created each year, and the
limited amount of live programming. In a sense we are returning to the early
days of cable; when systems could only offer 30-40 channels, there was only
room for the best stuff. As system capacity expanded that capacity was used
primarily for channels filled with library content.
Bundles of live linear streams ARE NOT being replaced by content libraries. The
new content libraries are replacing Blockbuster, the Netflix DVD mail service
and other services that have offered access to the content libraries for the
past few decades.
We have not been limited in sources for library content for decades. Internet
servers have replaced tapes and DVDs - some legacy businesses are gone,
replaced by new OTT services that license the same old inventory.
OTT services like Hulu, Netflix, and Amazon Prime video do
not have channels.
They don't need "channels." They have gotten past that technology. At the
same time, if these services wanted to provide "linear streams," they easily
can. No problem at all. They simply use packet switching instead of channel
switching.
Channels were never a very good way to deliver library content. They were a
good way to fill up the expanding capacity of MVPD systems, and provided the
means to get around the rate regulation authorized in the 1992 Cable Act.
If Netflix or Amazon want to provide live streams they certainly can; but the
competition for good live content, especially sports is intense and expensive.
Netflix has proven that it is not necessary to introduce new shows by
appointment, dribbling them out week by week. They dump entire seasons all at
once. For episodic television this is a viable business model.
But that does not mean it is the only business model. Other sources are
committed to live premieres, with catch-up/on demand options to help build the
audience. And some will continue to drip out episodic shows one week at a time.
Channels were a means to an end, Craig. The end was to distribute content,
and channels were the only game in town. That's what's changing.
No it is not.
Channels are sources of many scheduled shows with extensive promotion to get
you to watch multiple shows, not a single program. They hope that you will make
an appointment and stick around for the next program.
Netflix and Amazon offer many shows without the ads and promos. They use a
search engine and data mining to make recommendations. Again, different
business models that are more complementary than competitive.
"Channel surfing" is dying...
It is easily replaced with "library surfing." I do it all the time, for
instance.
Like the majority of U.S. homes. Library surfing is much more satisfying - what
you want to see on demand, versus what's on that might be interesting.
While channel surfing may be dying, channels are not. To survive they just need
to offer desirable content that attracts viewers, as the president of WGN
stated.
Bottom line, in a world of TV abundance, multiple business models will coexist.
Regards
Craig
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