[opendtv] Re: Bob likes COFDM

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sun, 27 Mar 2005 13:42:45 -0500

At 6:05 PM -0500 3/26/05, Manfredi, Albert E wrote:
>But the conglomerates don't need to worry about whether
>cable and DBS get POed. This is business. If they offer
>this now-cable-only content FTA, along with the
>traditional FTA channels, then won't the conglomerates
>and their affiliates get more of the ad revenue?

Not exactly. Most of the ad revenues go to the conglomerates now. 
There are slots for local ad insertion into these cable channels, but 
that revenue goes to the cable or DBS system, or in your scenario, to 
the local affiliate. No net gain for the congloms there.

But a potentially huge net loss. The cable companies will liekely 
either dupm these channels if broadcasters start to carry them, or at 
the very least, refuse to pay subscriber fees. This represents a 
potentially large loss of revenue for the conglomerates.

>So why isn't this just a simple business decision for the
>conglomerates? More ad revenue vs some amount of $ per
>subscriber per month and no ad revenue?

See above.

>Seems to me that the rest of the business world is full
>of different sorts of redistribution arrangements. The
>advantage of an OTA distribution infrastructure is that
>you don't need to make it work like cable or DBS. It can
>be exclusive yet at the same time competitive, because
>multiple exclusive networks can co-exist throughout a
>market. I don't see why this feature of OTA distribution
>should be discounted.

Do you mean the world of free markets?

The conglomerates do not operate in free markets. They have 
tremendous leverage because of techno-political gerrymandering. If 
local broadcastters decide to use the spectrum to compete with cable 
and DBS, the conglomerateas will lose this leverage and likely be 
forced to start paying for distribution, rather than greenmailing 
their distributors to raise profits.

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