[opendtv] Re: Analysts Vet Investor Concerns on Broadcast and Cable Sectors
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Thu, 17 Mar 2011 07:52:28 -0400
At 4:01 PM -0500 3/16/11, Manfredi, Albert E wrote:
Excerpt from the article:
"There is also a perception that broadcast networks eventually will
put affiliates out of business.
"'Fox and CBS have been very vocal with regard to their desire to
get paid for their programming by both the MSOs--retrans--and the
affiliate groups--reverse comp/retrans or license fees,' they said.
'Unless the nets want to become defacto cable channels and give up
significant ad revenue, they have every incentive to keep the
affiliate business financially healthy.'"
I think Craig's argument would be, if the networks did become just
cable channels, and put the affiliates out of business, more people
would be paying the subscription fees to see their stuff on an MVPD
channel, the networks would get a piece of that, and the networks
would make even more money.
Wow...
Now I don't need to post at all...
Kinda like a list bot that knows what I'm thinking...
;-)
Clearly the networks are looking for any source of new revenue as
their ability to keep raising rates in the face of declining
audiences is now challenged. But moving to cable only distribution,
while allowing the networks to keep all of the subscriber fees, would
not increase the audience. In fact, and I'm surprised Bert did not
consider this, their ratings would take a large hit, as it is the
"antenna only" homes that make up a good chunk of their viewers. To
make more money they would "hope" that the antenna only viewers would
be forced to subscribe to an MVPD, but this is just one of many
options - Netflix, Amazon, iTunes, DVDs, piracy, etc.
IMHO, the homes that are not currently subscribing to an MVPD, like
Bert's, either cannot afford the service, or do not want the service.
I humbly submit that the loss of FOTA content would not change this
picture much. Rather, there is growing pressure on the MVPD business
model that suggests that we are moving in the direction of Over the
top Internet delivery. What is not clear is the various economic
models that will emerge as more homes have the bandwidth to drop
their MVPD service in favor of "Internet ala carte."
Bottom line, the existing broadcast network model looks to be dying.
The main value of the broadcast networks was their ability to act as
gatekeepers in an era when there were very few distribution options.
As alternative content and distribution options have proliferated,
the value of a network to aggregate and promote content has steadily
declined. It is not the affiliation business model that is
threatened, it is broadcasting that is threatened.
Regards
Craig
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