[opendtv] Re: 20050509 Mark's Monday Memo
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 1 Jun 2005 09:57:39 -0400
At 11:22 AM -0400 5/31/05, Manfredi, Albert E wrote:
>Craig Birkmaier wrote:
>
>> Today there is little incentive for broadcasters to offer
>> access to their spectrum for applications that might
>> compete with them.
>
>This is a very standard standard business decision. The
>broadcaster would get some compensation for use of his
>spectrum by a third party. The question the broadcaster
>would have to consider is whether this third party content
>increases the broadcaster's overall revenues or reduces
>them.
aGREED.
And this is also a concern when spectrum is auctioned to a company.
The net result is that you create gatekeepers, rather than opening up
the market to any company that wants to reach consumers via the
public spectrum resource. This is what I am trying to put an end to
with the spectrum utility idea.
>In a multicast environment, the third party content would
>perhaps be material that does not compete head to head with
>content the broadcaster is transmitting at the same time.
>So having this extra content might attract more customers
>to this frequency band than the broadcasters OWN content
>could attract.
Also true, and one of the reasons why broadcasters are unlikely to
carry content that may compete with their primary programming, unless
it is a "restricted audience" (i.e. a subscription service rather
than free-to-air). To date the only stuff that broadcasters have
shown any real interest in is content that competes with cable, such
as a news channel or weather service. But some stations are signing
deals for additional networks, just in case multicasting does
materialize as a real opportunity. it is still difficult for
broadcasters to get by the notion that they are trying to attract the
biggest audience possible with one primary program. Aggregating an
audience across multiple networks is viewed as diluting the primary
network and may even be in violation of their network affiliation
agreement(s).
One of the reasons that the USDTV business model is not working is
that broadcasters have too much power via this arrangement. If the
service does not take off the broadcaster has little to lose,
especially now when hardly anyone is watching DTV broadcasts. On the
other hand, if the service is successful, the broadcasters can demand
more money, marginalizing the service provider (e.g. USDTV), or they
can just do their own multicasts and not split the profits.
>
>Even with NTSC, which only provides the one channel,
>broadcasters seem happy to give all their bandwidth to
>infomercials in the wee hours. Ever wondered why they
>don't obsess that this is taking away from viewership
>of their own content? The simple answer is, this
>alternative content pays them more.
No. Why would it take away from viewing of their own content? They
rarely program these off hours with their own content and the
networks that do have overnight service do not compensate them for
carriage (they get only what they can make with local ad insertions
which is not much. In most cases they can make more money by running
infomercials.
You may have noticed a story I posted yesterday about a large spot
buying company that is moving away from CMP based ad rate to new
structures that are based on actually consumer responses.
Informercials and Per Inquiry ads (e.g. Ginsu knives and direct sales
of music), typically include a compensation provision where the
station gets paid based on responses and or purchases. In most cases
the stations can make more money running this stuff in the off hours
than buying syndicated programming and selling ads.
Regards
Craig
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