[opendtv] Re: White paper from CEA

At 10:21 AM -0400 10/28/05, Mark Aitken wrote:
>Please explain this one. I am feeling "left out", being a Broadcaster (I
>think, maybe, a real one..), the "obscene profits" are not being
>reflected everywhere (for that matter, anywhere?). As the the "paying
>for something they may never use"? Not sure what you are saying there.
>What is it that is being paid for and never used?

Perhaps an overly broad generalization, Mark, so I will explain...

Profit margins for broadcasters affiliated with one of the four major 
commercial networks in the top 25 markets have an AVERAGE profit 
margin in the range of 25-35%. Many have profit margins as high as 
50%, especially those who are operating duopolies in the top 25 
markets.

In markets 25-50 things drop off a bit, and profit margins may only reach 25%.

In markets below the top 50 things come back down to earth, and 
profit margins are comparable to other businesses - i.e. in the 8-15% 
range.

Obviously there are exceptions to these general numbers. Where 
stations have a marketing advantage the profit margins tend to be 
higher. I am sure that Mark can confirm that profit margins tend to 
be higher when a broadcaster is operating multiple channels in a 
market, either under the duopoly rules or via local marketing 
agreements. Here in Gainesville, the ABC affiliate has not had ANY 
local competition from major network affiliates until the pas two 
years. They have the ONLY local news, and their operating profit 
margins are more like those for the top 25 markets, although the 
gross revenues are much smaller than for a top 25 market.

It is also true that this situation is deteriorating, especially for 
smaller and independent broadcasters, who face competition from many 
sides. But an FCC license is still a very valuable commodity.

As for paying for stuff never used, I am talking about the impact of 
retransmission consent on cable and DBS subscriber fees.  In some 
cases this takes the form of fees applied directly to the major 
networks; and we can expect these fees to become much more prevalent 
as stations re-negotiate the agreements that are expiring. In many 
more cases, the fees are applied to cable only networks that are 
owned by the stations/networks who used retransmission consent to 
gain carriage (or higher subscriber fees) for these networks. In ANY 
case, as a cable subscriber, I am paying subscriber fees for MANY 
channels that I do not watch. And there are many broadcast channels 
that I do not watch, some of which I am forced to pay for either 
directly or indirectly.

>
>One the last point...when analog 'goes away', what will people be
>watching when (not if) cable goes down? When analog goes away what will
>people be watching when (not if) the DBS dish is blown away?

In the aftermath of hurricane Francis last year we lost both power 
and cable TV. After the power came back I tried an antenna, but the 
reception was very poor. For the most part the people in Gainesville 
tuned to one pair of radio stations that did an incredible job of 
keeping us informed. But many people went to local retailers and 
subscribed to DBS when the cable went down. DBS service was reliable 
here both during and after the hurricane.

I am not trying to minimize the important role that broadcasters can 
play during times of emergency. The problem is that the service is 
not that good in these parts, and the new DTV service is certainly 
not MORE reliable than NTSC.

Holding out the pretense that TV broadcasting is invaluable because 
we can fall back upon it in the rare cases when our cable or DBS 
service goes down is a big stretch. It needs to be valuable enough 
that the majority of people use it all the time, not just in 
emergencies. Radio is a vastly superior service during these rare 
emergencies.

You and your fellow broadcasters are the trustees of a valuable 
resource that is being squandered, in large part because the service 
is no longer competitive, and it is technically challenged compared 
to alternative forms of TV distribution. This is the real problem.

Let's use the spectrum to offer a competitive service, and a service 
that fully utilizes the advantages of being WIRELESS.

In this I am also fully aware that your company, Sinclair, feels much 
the way that I do. That you could be doing much more with the 
spectrum if only you were allowed to make the fright technical and 
business decisions to compete.

>When analog
>goes away, as a nation that depends on the timely dissemination of vital
>information (like where the hurricane will land, where the tornado will
>touch down, where the blizzard will dump the load, where/when the next
>terrorist event ... etc.), how will Americans continue to have access to
>wireless (which TV Broadcasting was designed to be :-J) information
>without paying a direct fee?

It's called radio.

>
>Think this through, and if you are truly committed to making a
>difference, what have you been doing to make it happen? Really? Talk is
>cheap...


Hmmmmm...


Seems that I have been there exposing this fraud for what it is, for 
more than a decade. This forum has been one element of that process. 
I spent a great deal of my own money to participate in the ACATS and 
ATSC standards processed, and the MPEG standards process. I provided 
extensive editorial coverage of all of these issues, and help 
Sinclair to get the message out about the whole 8-VSB versus COFDM 
battle, both through my articles and via the OpenDTV forums at NAB.

Unfortunatley, I did not have the power to get my minions in Congress 
to gut the entire DTV transition by slipping in a bill that rendered 
the whole thing meaningless, only three months after the FCC launched 
the transition. That my friend was done by the folks we pay tribute 
too ever year in Las Vegas...

Broadcasters.

Regards
Craig
 
 
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