[opendtv] Re: Analysis: Broadcast's $1 Billion Pot of Gold

  • From: "John Shutt" <shuttj@xxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 11 Jul 2008 09:18:31 -0400


I have worked in cable. In fact, my first "television" job was engineer at a Public Access studio, but that was many moons ago. However, you being an industry insider, I'm sure you know or can find out the answers to the following three questions:

1) How much does a :30 spot go for on "Deal Or No Deal?"

2) How much does a :30 spot go for on Ice Road Truckers?

3) How much in subscriber fees alone does Discovery Networks pull down each year for The Discovery Channel, TLC, Animal Planet, Discovery Health, The Science Channel, Discovery Kids, Discovery en Espanol, Planet Green, Military Channel, Investigation Discovery, Turbo, HD Theater, and FitTV? You think that maybe some of those channels generate more revenue via subscriber fees than it cost in rebranded and remixed programming, thus subsidizing some of the other ones?

If ad revenue alone were enough to sustain all those spinoff channels, then don't you think that they would have made additional channels that had NO subscriber fee? Competition is fierce to get onto cable/DBS, just as it is fierce for products to get shelf space in your grocery store.

Without having to perform a complete audit of the books, we can already get an idea of how much a subscription fee would be if there were no ads. As I said before, look to HBO, Cinemax, and Showtime.

As for Freeview, I still contend that it is partially subsidized by the UK television license, which is currently 139.50 GBP (because of the plunging dollar, that is now $276.32) per year per household. At a bare minimum, the Beeb paid for most of the engineering and implementation of the DTV multicast network.

Individual Freeview channels may also be partially subsidized by BskyB and however many cable systems exist in the UK, to the extent that they receive subscriber fees from those sources. If so and how much I do not know.


----- Original Message ----- From: "Craig Birkmaier" <craig@xxxxxxxxx>

Your response sounds like it was written by the PR department for the NCTA. This has been the "company line" ever since the FCC and others started talking about ala carte. It is a worst case scenario based on the FALSE premise that subscriber fees are a critical component of economic viability of all cable and broadcast channels.

Yet somehow, broadcasters have managed to thrive for decades without the "found money" from retransmission consent fees.

And most cable networks have become financially profitable now that they have become a standard component of what 85% of the homes in the U.S. watch.

Freeview is living proof that subscriber fees are not an economic imperative for the survival of a TV channel. Somehow, these channels are making money ONLY from ads, and many channels that are operated by companies that are not among the original Freeview partners, are paying millions of dollars to get their content onto the service.

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