[opendtv] Re: Analysis: Should Apple Buy Hollywood?

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 31 Jan 2012 15:56:14 -0600

Craig Birkmaier wrote:

> What article did you read?
> The author started with the premise that Apple has enough money
> to buy Hollywood, but quickly smashed that idea:
> "But it is very unlikely Apple would just snap up all the major
> media companies. It would be a post-acquisition mess, not to
> mention the antitrust issues it would raise. No, all Apple needs
> to do is take a few billion dollars of that cash and start
> licensing the rights to stream first-run TV shows and movies.

Which is still not saying that Apple would be generating its own content. It's 
saying that Apple would become licensed to distribute the content of the 
Hollywood studios, as a monopolistic choke point. This was the suggestion that 
instantly made me think "frying pan to fire, or actually worse than that" (or 
words to that effect).

> He would no longer be able to say that ALL content owners should
> be able to do whatever they want with their content. Apple would
> be different because "their" walled garden is only accessible to
> devices that rely on the Apple ecosystem.

Exactly right. As long as multiple content sources compete, and their content 
can be viewed by multiple competing platforms that are UNRELATED to the content 
sources, everything works fine. Once you allow for the collusion that Craig has 
come to embrace, only because of Apple, but which he once vehemently opposed, 
that's when we run into problems.

For example, you want a la carte? Heh. Good luck with that, once you are 
totally beholden to another walled garden.

> Never mind that HBO, Showtime and most of the cable networks
> license content that is ONLY available to cable subscribers
> using proprietary set top boxes.

Of course, all you're suggesting is adding Apple to the list of walled gardens 
for HBO distribution, even though there's no need for such walled gardens 
anymore. We are talking about Apple and we're talking about Internet 
distribution, not cable of DBS umbilicals. Technology changes, Craig, and with 
that, business models should too. So, Apple would not JUST become another MVPD 
(when no MVPD middleman is needed), but they will ALSO be an MVPD that has been 
known to mandate all of the equipment, from the web-site/portal to the display. 
The worst of all worlds.

> Why do TV content owners currently rely on the closed ecosystem
> of the broadcast networks and cable?
> I'm not talking about content that is developed and owned by the
> five big media conglomerates. I'm talking about all the
> independent producers who have little choice but to cut deals
> with the media conglomerates, since they control distribution.

Actually, we just got the FOTA Bounce Network added into our CBS affiliate's 
channel, here in DC, as of 1 January (more or less, that's about the first time 
I noticed it). But the simple answer is: spectrum. Before Internet distribution 
became practical for wideband streaming, cable and satellite had much more 
spectrum available to them than FOTA. So niche channels, with tiny audiences, 
are just not a good match for FOTA. They can't get the ad revenue to make it 
viable to go FOTA. That was before Internet distribution was practical.

> Why don't independent producers just create their own content
> portals and stream their content, either for a fee, or "free"
> with embedded ads?

They CAN! Now they can. With a caveat.

With all that huge choice, a small-timer will have trouble getting noticed. But 
the bigger operations will have NO TROUBLE advertizing themselves, so there's 
NO EXCUSE to become slavishly beholden to an isolated portal for everything 
anymore. If some site, like Hulu or iTunes or Netflix, wants to help promote 
small-time productions, go for it! For the rest, don't allow yourself to be 
lulled into useless walled gardens.

Consumers have to figure this out and quit caving in.


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