[opendtv] Re: A competitive marketplace
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 7 Aug 2015 09:55:20 -0400
On Aug 6, 2015, at 9:59 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
People are already dropping these legacy bundles from these walled gardens,
Craig. You argue from the point of view that everything remains static.
People are dropping out of this old model, and whoever offers them something
more appealing will gain those customers. And, importantly, the customers can
come from anywhere, in the US at least.
Some people. And some are moving to VMVPD bundles.
I am not arguing from the point of view that everything will remain static. I
am simply saying that these shifts take time, and in the end a large percentage
will continue to pay for (V)MVPD bundles.
Not much like that, in fact. DBS offered the same walled-in formula as cable.
What will happen is that as people cut or shave the old school walled garden
services, which they have been doing already, have been for a couple of years
at least, they will replace these with what appeals most to them.
Yup. And it is likely we will see new VMVPD bundles that are more attractive,
and offer more choice than the extended basic bundles that exist today. But
these will still be VMVPD walled gardens.
The missing element here is the shift to providing Broadband,
an area where the geographically restricted MVPDs are growing
rapidly.
But **not** as "restricted MVPDs." They are growing rapidly as
neutral-mandated Internet infrastructure service providers.
No they are growing as regulated geographic oligopolies, that provide
broadband. And most will continue to offer MVPD bundles.
No strategic advantage.
We disagree. They currently own 80% of the market; that is a strategic
advantage. They can bundle multiple services under one bill; that is a
strategic advantage. And they have room to wheel and deal, even if it does
reduce profitability a bit; that is a strategic advantage.
In fact, the broadband pipe has to be neutral. So there's no reason to
believe (a) that the broadband provider can formulate and sell TV bundles
more competitively than any number of OTT sites out there, **and** (b) no
reason to believe that the broadband provider will restrict his marketplace
to just that local area.
Neutrality is not relevant to this discussion; it is broadband and can deliver
anything.
But cabled systems can still operate the TV side of the plant as a walled
garden, even if they shift to IP transport. Some, like Comcast, are already
doing this for some of their proprietary services.
There is no reason to believe that ANY MVPD can significantly reduce the cost
of MVPD service, as everyone is paying about the same for the content. They CAN
reduce the channels offered to lower the price, and they can operate at lower
margins like Amazon. But the content owners have the upper hand here; they have
a huge say in who can offer what, and at what price.
Why the legacy thinking, Craig? What makes you think that Comcast will only
offer TV bundles to people physically connected to their own coax ONLY?
Legal restrictions and the contracts they have for the content.
Why wouldn't Comcast want to benefit from all those non-Comcast broadband
providers, just as much as Netflix is benefitting from Comcast neutral
broadband?
Because Comcast is a heavily regulated geographic MVPD, while Netflix is an
unregulated OTT service with an International footprint.
Obviously, as Netflix and Hulu are doing.
No Bert, they are not undercutting the pricing of a MVPD service; they do not
offer access to the linear streams. They are providing a better way to watch
library content than the legacy packaged media technologies they are replacing.
And they are starting to create some original content to provide the
exclusivity needed to attract new subscribers.
You seem to think that an open competitive marketplace **has** to retain the
same high profit margins as the uncompetitive marketplace. But the facts are
against you, Craig.
If a market were truly open and competitive I would agree. But the market for
TV content is controlled by oligopolies, hence it is not open and competitive,
and the Internet will not change this any time soon.
What monopolists?
Viacom
Disney
Time Warner
Comcast (NBC Universal)
Twenty-First Century Fox
CBS
The biggest credible "monopoly" that created market distortions was the
monopoly that distributed coax cables to homes, dedicating that cable
entirely to TV content they controlled. That reality is what allowed the
content owners to become so greedy, taking money even from those who didn't
use their product.
The oligopolistic listed above took control of the content side of the industry
with a few new members of the club - Time Warner and Viacom. This was largely
made possible by the 1992 Cable Act and Retransmission Consent. The MVPDs
played ball because they operate an oligopoly that works hand in hand with the
content owners.
Rubbish. This is political talk, Craig. Read that article again. Did he call
Sling "just another MVPD"? Read it again. Quote from it, to retain what he
said.
It's just another MVPD Bert.
Big whoop. ESPN is also losing money, right?
Wrong. They are EXTREMELY PROFITABLE. They have seen a small YOY decline in ad
sales, due primarily to the very good year they had last year with the World
Cup.
And having to cut costs, and being innovative in how they deliver their
product.
Like any business, they need to keep costs under control. They are experiencing
more competition from regional sports networks, and to be fair, they got a
little bloated due to their years on top.
Nope, They broke out of your "the bundle," Craig, which you swore up and down
would never happen.
Sling is a "reduced fat" VMVPD bundle Bert. You still are paying for about 20
linear streaming channels, and the service has some restrictions, like only one
stream at a time.
Been over this a ton of times. Regulation is a necessity when competition is
impossible. Yes, it is a necessity to keep unbridled greed under control.
Are you saying competition in the business of creating and delivering TV
content is impossible?
;-)
Unfortunately, we have unbridled greed that is out of control - the best
politicians that money can buy!
Regards
Craig
----------------------------------------------------------------------
You can UNSUBSCRIBE from the OpenDTV list in two ways:
- Using the UNSUBSCRIBE command in your user configuration settings at
FreeLists.org
- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word
unsubscribe in the subject line.
Other related posts:
