[opendtv] Re: Amazon Warns FCC About OTT Redefinition | Multichannel
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sun, 20 Sep 2015 12:11:58 -0400
On Sep 19, 2015, at 7:59 PM, Albert Manfredi <albert.e.manfredi@xxxxxxxxxx>
wrote:
I hardly see any local political ads on TV, and the only national debates
occur during an election season.
You live in a large, very expensive media market; this limits the ability of
local politicians to afford TV ads on the popular local stations that have
local news. If you subscribed to cable or Fios you would see many local
political ads; these systems have the ability to deliver ads to much smaller
geographic areas at much lower cost.
If you had MVPD service you would have been able to watch the two recent GOP
debates and all of those scheduled between now and the nominating conventions.
Only the limited number of debates between the conventions and the election are
carried by the broadcast networks.
Regardless, an informed public is crucial to a democracy. They have to see
for themselves, rather than listen to the second-hand lunatic ramblings of
political extremists. A medium that reaches everyone is the ideal way for
political issues to be aired, direct to consumer, unfiltered by whack jobs.
I agree in general. We have plenty of political speech now, including the
extremes, although most of it has moved to the 24/7 news networks.
Weird alternate reality. In any case, there's no reason why locally-produced
news cannot exist, independent of national TV network news.
Correct. There is no reason that 2-3 newspapers cannot exist in large markets...
Except for basic economics.
You ignore how local TV news transformed the way many Americans got their news.
The medium was more compelling, and for decades a large portion of the
population watched their local news followed by the broadcast network newscasts.
I can't find stats prior to 1980, but in that year about 42.3% of the 81
million U.S. homes watched the network newscasts. In 2014, 16.8% of the 116
million homes watched the network newscasts.
Not many years ago local news was the major profit center for most network
affiliates. Now many stations are losing money on their news departments. It
will be interesting to see how the spectrum auction will impact local news.
It is unlikely that many markets will be able to sustain 3-4 TV news
organizations. We may see more stations entering into local marketing
agreements with consolidated news operations serving multiple stations. Here in
Gainesville, Sinclair bought two stations and manages a third, with news
operating under the banner of the Gainesville Television Network.
Retransmission consent dollars are already propping up local broadcasters. It
is absurd to believe that local TV news operations can move to the Internet
unless they can generate much more ad revenue that they get today.
The link between local broadcaster and conglom came from a time when it was
essential, and still is for OTA delivery. That link COULD become essential
again, if the local broadcaster takes on a new content delivery role for the
new medium. Otherwise, there's no reason to assume this conglom-broadcaster
link MUST remain in place.
The link came from the collusion between commercial media organizations and the
politicians who gave them virtually free use of the broadcast spectrum. It is
still a very lucrative business in larger markets, and profitable across most
markets for network affiliates.
I still don't have a clue why you think there is real money to be made by
broadcasters operating edge serves for the networks they are affiliated with.
These servers already exist in many markets - they are co-located with the
major ISPs, mostly cable systems.
As long as OTA still exists, the local broadcaster is essential. If OTA
ceases to exist, then the local broadcasters can continue to produce the
local content (some of them would survive this way), and beyond just that,
they can also reinvent themselves, as I've explained many times.
I thought you were in favor of eliminating ownership caps?
Obviously, for technical reasons, OTA broadcasting has geographic coverage
limits. If the broadcast networks were allowed to own stations across the
country, your vision of a local server based "CDN" architecture would make much
more sense.
With a national footprint, the networks would likely consolidate to a handful
of regional operations centers from which they could control servers that would
feed both OTA transmitters and Internet OTT sites. These regional centers
could create newscasts based on the most important stories in the region, and
create localized versions as well. Sinclair has already demonstrated the
feasibility of such a model.
You might argue that the transmitters would be unnecessarily redundant,
however, they would protect the retransmission consent revenue streams.
Should be obvious by now. Nobody "debunked" any of this. It's a fact of life
that newer technologies created.
We disagree.
"Murdoch said he sees the pay TV market in the U.S. taking a new turn...
That right there contradicts what you used to claim, Craig.
Not at all. It validates what I have been saying.
What made your much ballyhooed "the bundle" so lucrative, so much so that you
told us time and again it would never unravel, was all the welfare payments
the content owners were getting.
Correct. The welfare payments are not going away...
They are increasing in proportion to the audiences each channel delivers. What
will go away are the rerun channels that exist to deliver library content -
these channels typically have subscriber fees of 0.10/ mo. In other words, they
are becoming irrelevant, but needlessly drive up the cost of the full extended
basic bundle.
What will remain are the channels that deliver big audiences - the channels
that are getting more than $1.00/mo, and in many cases $2.50/mo or more. I have
repeatedly shown you evidence of this, most recently in the article that
speculated about what Apple will pay for the channels that most MVPD
subscribers watch.
For instance, you think that CBS All Access, at less than $6/mo, sold only to
those who want it, is not a good deal.
Correct. It is a lousy deal, hence the pathetic level of subscriber growth.
And yet at the same time, you were claiming that your "the bundle," where
everyone has to pay more than $6/mo to ESPN, even if they never watch, would
soldier on for all time. "Too lucrative," you repeated time and time again.
Well, it ain't soldiering on for all time, even according to Murdoch.
That is not what he said. He said:
“The real story here is we will see, and we’re starting to see it already, a
kind of rebundling, where customers might say they want to have more choice,
they want to have a streaming service for $10 or $15 depending on which one
it is, and they may want to have something from their MVPDs that’s a little
less everything in it...
I think we’re going to see a lot of different packaging options emerge and I
think it’s going to be harder to distinguish, or its going to be less
clear-cut, what’s really an over the top SVOD service or a virtual MVPD and
what’s a traditional retailed MVPD package because there’s going to be a lot
more choice in the marketplace.”
You can subscribe to a Virtual MVPD service now from Sony that does not include
ESPN. Competition will create many more services with more choice.
I've been explaining to you forever that OTT sites can create any number of
different bundles, competing directly for subscribers, everywhere in the US
(or the world for that matter). This is what IS happening. As a consequence,
your "too lucrative" welfare payments are going to be harder to come by.
Not at all. They will continue to track actual viewership.
So once again, no. There is no credible competition for broadband service,
Craig. Wireless is not set up for unlimited use, it becomes way too expensive
still. And for cabled broadband, people simply don't have enough options,
assuming they even have more than one option. Why do I need to belabor the
obvious??
Your absurd back and forth - which I deleted - completely ignores the reality
of what AT&T is doing:
1. They bought DirecTV to do the heavy lifting for TV content delivered to the
home.
2. They are bundling DirecTV and cellular service, positioning cellular data as
the way to watch TV on mobile devices when you are not at home.
3. They are dropping the price of DSL service, milking it for all it's worth
until cellular data can compete with wired broadband.
The operative word in your last sentence is "still."
When I bought my first iPhone in 2007 the data plan was unlimited, but the top
theoretical data rate for 2.5G was 144 Kbps. Streaming audio was barely
possible.
I just did a speed test and got 6 Mbps with LTE, and AT&T just increase our
data plan from 10 to 15 GBytes/mo. Streaming video to mobile devices is now
commonplace and of HD quality.
How many years will it be before cellular data caps become irrelevant?
Regards
Craig
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