[opendtv] Re: Analysis - Cable's Future Power: Parity With Big 4 Broadcasters

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 30 Jan 2008 13:12:57 -0500

Craig Birkmaier wrote:

> An interesting analysis, but I'm not certain the writer fully
> understands what is going on here. She does explain that the
> conglomerate parents of the Big Four Networks will benefit from
> these shifts, along with Time Warner, which has turned it's
> Superstations into cable networks.
> I think this has less to do with advertising parity for cable
> than it does the deconstruction of the broadcast networks,
> which are sharing a big chunk of advertising revenues with
> their local affiliates.

> In essence, the conglomerates are sharing more than $20
> billion in advertising revenues with local TV broadcasters
> (they actually get a good chunk of this via their O&Os). IMHO
> the biggest threat to the continue existence of local TV
> broadcasters is that they are not investing much if any of
> this revenue in the development of content. Without content,
> the conglomerates could easily pull the plug on "the big four
> network," leaving local broadcasters grasping for something to
> air...

The way I see it, the conglomerates are the ones that create the bulk of
cable and OTA broadcasters content. The OTA broadcasters that are *not*
O&Os are only there for one overarching reason: to sidestep the FCC's
national cap (39 percent) and attain national coverage of their content
on the OTA TV network. People don't use the OTA TV delivery option to
watch local content, IMO, other than the occasional newscast or weather
report, perhaps.

So as long as the conglomerates want to retain an OTA presence, one way
or another the OTA network will survive. Either the conglomerates will
make deals with affiliates that satisfy both parties, or there will be a
renewed effort to break down the 39 percent national cap, again. And if
the OTA network is in peril, my prediction is that the FCC and Congress
will listen.

Much depends on non-addicts to make themselves heard, however. And/or,
on ever escalating MVPD rates, that might eventually convince a few MVPD
addicts to go cold turkey. That would in turn create an incentive for
the conglomerates to take interest in their FOTA delivery option. And it
would also work to stabilize MVPD prices. What a concept.

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