[opendtv] A TV business model

  • From: "Albert Manfredi" <bert22306@xxxxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sat, 07 Jan 2006 20:07:58 -0500

Here's one possible model for first-run TV shows that might
do what makes sense.

For ad-supported material, the ad revenues go directly to
the content creators. And it's based on total viewership.

The content creators decide how to distribute this material.
They use any combination of their own OTA facilities, affiliated
OTA stations, cable, DBS, IPTV telcos. Content providers pay
the media they do not own for distributing their material.

So the content creators are rewarded if they efficiently use
the media they have access to. For example, general interest
content might use all media available, but more special
interest content might be sent over subscription services,
or over premium tiers, as one would naturally do with
specialized material. Leaving room for maximum viewership
of the general interest stuff.

Subscription services are also permitted to insert even more
ads, for more income. That's entirely up to them. More ads
might start to erode viewership, of course. The content
creators can negotiate rates with these independent
distribution services. The independent distribution service
needs only "guarantee" the viewership they claim exists.

For content not supported by ads, the content creators
derive their income from the viewership. So, either they
scramble the content on their OTA network, and charge
viewers for the decryption service (a la Marquee OTA
service that predated cable TV for uninterrupted movies),
or they get compensated by the umbillical service
providers, based on viewership.

With such a scheme, seems to me that network-owned
and affiliated broadcasters would have an incentive to
promote their OTA service, it being part of the total
distribution system. The larger the total viewership, the
more they can charge advertizers. And for every eyeball
that leaves a subsription service, there's an incentive to
get those eyes on the OTA network.

This should work fine without having to invent an "OTA
distribution utlity."

For content providers who do not own stations, or do
not have a network of affiliates, independent or
net-affiliated stations can also create outlets for them.
Here too, the ad revenue would go to the content
creator, if this is to be ad supported, and this content
provider negotiates carriage with the station(s).

Here too, the station may try to fit in even more ads,
if it thinks this won't erode viewership.

I think that with this scheme, affiliated OTA
broadcasters would not be satisfied to just rely on the
umbillical media and must-carry for distributing their
programs. Because affilated broadcasters' income is
only derived from what they themselves distribute,
negtiated with the content provider only.

So how far is this removed from current realities?


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