[opendtv] Re: Amazon Warns FCC About OTT Redefinition | Multichannel
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Fri, 18 Sep 2015 08:35:21 -0400
On Sep 17, 2015, at 9:14 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
Clearly you would recommend going a step further than CBS and
offering the live streams OTT. But what would the economic model
be?
Plenty of options here. One is to offer the live stream FOTI, ad supported,
exactly like FOTA.
That's an economic model from the 1960's. How does that deliver a second
revenue stream?
Plus, as CBS is doing, they can make the library content available only for a
fee, past a certain time, with or without ads.
Yup. And hundreds of thousands of people MAY pay.
The congloms have this power you mention, Craig, because they have the
highest value content available to everyone.
I guess that depends on how you value the portfolios of each of the congloms.
What sources of content deliver the most revenue for Disney? It's not ABC.
How about Comcast? It's not NBC.
The reason the broadcast networks are important is they helped the political
establishment reach voters and fundamentally change public opinion. In return
they were granted a lucrative oligopoly that has been extended well beyond the
limitations of FOTA broadcasting via cable, DBS, and most likely the Internet
when the FCC starts regulating Virtual MVPDs.
Or, the live stream could be made available only for a fee - a perfect way to
turn even more people off to linear TV, even faster than they already are.
????
Linear TV is not going away. 23 million people watched the debate Wednesday
night, and it was only available to those who subscribe to the extended basic
bundle or Sling. The audience for Sunday and Monday night football was even
larger.
The only REAL change taking place is the ability to time shift the viewing of
most serialized TV programs via DVR or VOD, and the ability to access huge
content libraries on demand.
We are moving to a hybrid of anywhere, anytime viewing of live linear and on
demand programming, which is being reflected in the evolution of facilities
based MVPD services and new Virtual MVPD services.
You seem to think that the live stream is something special. It's not. It's
just the old, inconvenient way of doing things, totally overtaken by new
technology. Most people by far, for most programming by far, prefer on demand
anyway. And most people already use on demand. Let's not always have to go
back to square one.
It is a mix of both. Even the premieres of popular serialized shows still
deliver huge live linear audiences. And a large segment of these viewers are
Millennials.
Again, Craig, you make it sound like the MVPD model is doing great. You
totally ignore the fact that it's declining. If it were doing great, you
wouldn't see the CEOs busily trying new things. All of your comments become
invalid, when you finally realize that subscribers are bailing out.
The MVPD business is still where most of the money is. Yes, it is being forced
to change for several key reasons:
1. Overpriced bloated bundles.
2. The ability to consume content on new screens that are not connected to the
umbilical.
3. The ability to access much of the content that contributes to the bloat, on
demand.
Everyone is trying new things to determine how to maximize the size of
audiences and revenues. There's nothing new about that; it's fundamental to the
entertainment business.
What "major hurdle," Craig? Skipper is already considering making ESPN
available as an OTT service, even after having done almost as much with Sling
TV.
Funny how you qualify what ESPN had done with Dish Sling, after saying they
left the bundle.
Skipper, Iger and Staggs have all said that ESPN will NOT go direct for the
next five years. The slimmed down Sling bundle still requires you to pay for
twenty linear channels to get ESPN.
I posted a story yesterday about James Murdoch and his views on how the bundles
will evolve. You seem to have ignored it, probably because it reflects
everything I have been saying.
The hurdle for Virtual MVPDs is to offer the ability to access ALL of the
sources of programming that most MVPD subscribers watch and pay for. The
broadcast networks are still an important part of this mix for the very reasons
you state:
- They create a significant amount of popular serialized programming;
- They control the rights to many popular sports franchises like the NFL, NCAA
Basketball, and other live sporting events;
- They still have a significant audience for news, both local and national.
It is crystal clear that the congloms are NOT giving up on the broadcast
affiliate business model, because that is the source of their political clout
and the lucrative second revenue streams.
Bottom line, when Virtual MVPDs can offer a package of local broadcast
channels, better choice of slimmed down bundles, and access to related content
libraries you will finally see a SIGNIFICANT number of subscribers cutting the
facilities based cords and subscribing to Virtual MVPDs.
HBO is doing the same, as are other movie channels like ShowTime. The FCC is
simply wasting its time with these notions.
The FCC has nothing to say about premium movie services - they never have.
HBO, Showtime, Starz, et al have always been expensive add on tiers to the MVPD
bundles. The Technology now allows them to offer improved services:
HBO Go for MVPD subscribers and HBO Now for those who choose NOT to subscribe
to a MVPD service.
NO!! I already showed you the numbers. It is no more than 81% as of the
beginning of this year, *and* that number assumed that US households had not
increased in the past 7 years! So in fact, today, it may well be under 80%.
Let's not always have to revert back to square one.
Wrong. I have provided multiple sources that verify that the total of basic and
extended basic subscribers is still at 85%. Even If it is only 80%, so what. It
is still a VERY lucrative business model.
Nonsense. The much less conspiratorial market model tells us exactly why MVPD
nets do what they do, and it requires absolutely no government involvement.
If anything, it would be the hands-off attitude of the govt that permits
local monopolies to operate as they do.
There are many facets to the collusion. The basic service tier and
local-into-local requirements that protect OTA broadcasters are collusion with
the regulators, as is the must carry/retrans consent regime. The extended basic
tier is collusion between the content congloms and the MVPDs.
Governments at all levels protect this business model because the generate huge
revenues through franchise fees and taxes.
Already covered that old canard too. That's the old pretense. It's not true
anymore. OTT + OTA have become replacements for many households already.
Sorry, that's still noise level stuff. A small percentage of the ~15% that
don't subscribe to a MVPD service. Netflix has more than 42 million U.S.
subscribers, the vast majority of which also subscribe to a MVPD service. To
this you can add Amazon Prime and Hulu Plus.
And then there is the very large market of homes that download movies and TV
shows from iTunes, Amazon and others. In 2013 Apple was downloading 800,000 TV
shows and 350,000 movies a day.
Wrong. AT&T is not available to me, nor to much of the rest of the country,
and no one is offering anything similar here.
Really? You cannot get cellular data service from AT&T?
Competition is not practical, unless/until wireless broadband becomes more
affordable. Maybe then it will be, and then Title II classification won't be
essential.
Clearly wireless broadband is not competitive with wired for those who want to
cut the cord and consume hundreds of gigs a month. But that keeps changing.
AT&T just increased the family plan data allowance from 10 to 15 GB a month,
and any data you don't use rolls over. I am using streaming video services
frequently on my phone and tethered iPads, and still have plenty of data to
spare.
Regards
Craig
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