[opendtv] Re: All HBO Shows Are Leaving Amazon Prime in 2018

From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
To: opendtv@xxxxxxxxxxxxx
Date: Tue, 09 May 2017 07:53:12 -0400

On May 8, 2017, at 9:56 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:

Craig can't tell the difference between a temporary state of affairs, and
comments meant primarily to sooth the nerves of certain parties in the
industry, and the reality of where TV content distribution is heading.

The reality of where TV content distribution is heading is obvious Bert.

The content owners will use the Internet to cut out middlemen so that they can
lower prices and increase their profits. Then they will keep increasing prices
as they have for the past two decades.

Your fascination with this legacy model is amazing. You've made this comment
many times, but it keeps falling on deaf ears. Why?

First the comment is absolutely correct.

Second, as it relates to you:

Because the old business model is losing, not gaining customers. Get it?
A losing business model needs adjustment. Skipper has ALREADY said that these
things are being re-evaluated all the time.

And Tesla is selling expensive electric cars - so the automotive industry must
be dying.

Bundles are not dying Bert. They are gaining subscribers. In MANY cases
consumers are signing up for multiple bundles and paying MORE for their TV fix.
Despite declining ratings, the content congloms are making more money than at
any time in their history.

The only problem is that they have pushed the price of the MVPD bundles beyond
any level of reason. But they did this intentionally!

The solution is simple:

- Make the bundle more affordable by moving it to the Internet and cutting out
the profit margin of the MVPD middlemen.

- Divorce the cost of transport from the cost of the content so that the
consumer thinks they are getting a better deal. The MVPDs and other ISPs will
derive their income from transport - the content congloms will control the
profits from their content. The total cost for both will remain about the same
initially; competition for broadband will keep the cost of transport constant,
or it will drift lower as technology makes it possible to deliver more
bandwidth for a substantially lower cost. But the cost of the TV bundle will
continue to increase as it has for the past two decades.

- Reduce or eliminate services that offer FOTI access.

ESPN has been the lynchpin of MVPD bundles,

Insisting on legacy thinking. Let me know when subscriptions for this model
are back on the upswing, Craig.

They will increase in the fall, as they do every year. We are yet to see what
impact the lower cost VMVPD bundles will have on subscriber levels.

Exactly, Craig. What's new? What's new is that only the Internet made this
possible. What's new is that OTT sites in potentially large quantities can
now compete, to sell TV content bundles that people really want. *And* they
can compete everywhere. That's what's new. And yet, you're still stuck
talking about "lynchpin of [legacy] MVPD bundles," as if that even matters.

Exactly, Bert. What's new?

Consumers subscribed to cable because it offered more choice and new viewing
options compared with FOTA TV.

Consumers bought VCRs to time shift programs when they could not watch when a
program aired, and they began to purchase or rent both TV and movie content to
expand the range of programming they watched.

Consumers bought DVD players to enjoy the near HDTV quality possible on new
displays as they waited - another decade - for HDTV broadcasts.

Consumer subscribed to digital cable and DBS to access HDTV content, to use
DVRs for time shifting, and to access the popular content moving behind pay
walls, especially live sports.

Consumers added new VOD bundles that offered commercial free access to most of
the content they used to access via VHS and DVD.

Funny how the evolution of technology has an impact on consumer behavior...

Not so funny that monopolists and government regulators are allowed to control
this new medium.

Regards
Craig

References:
- [opendtv] Re: All HBO Shows Are Leaving Amazon Prime in 2018
  - From: Manfredi, Albert E

[opendtv] Re: All HBO Shows Are Leaving Amazon Prime in 2018

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