[opendtv] Re: Broadcasters, Cable Spar over Retrans

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 20 Jun 2011 16:53:40 -0500

Craig Birkmaier wrote:

> Why do the music congloms WANT to be on iTunes? Because Apple is the largest
> seller of music in the world and they provide an ecosystem that makes
> discovery EASY.

The extent to which Apple makes itself exclusive, i.e. requires the owners to 
create a special solution for Apple environments, is the extent to which the 
content owners can extract higher fees from Apple and its subscribers. And 
also, the extent to which the competition remains more "open standards," is the 
extent to which the Apple solution will remain comparatively more controllable 
by the content owners (translation more expensive, more vulnerable to being 
blocked, and so on).

> Even Netflix now has more than 20 million PAYING subscribers.
>
> Hulu Plus is hoping to have 1 million subscribers this year.

Hulu Plus is brand new, and should be considered as a addition to Hulu 
Non-Plus. So your comparison is not quite valid.

Besides which, no reason to expect that to last, unless the content owners like 
it this way. I'm not sure about this, but don't the congloms also own the 
majority of the movie studios? Why should they not carry everything that 
Netflix carries right there in Hulu Plus?

I do take your point of saying that the congloms themselves don't need to 
exist. We'll see how that shakes out. It still costs money to produce really 
good movies and TV shows, Craig. Good enough that the entire world wants to use 
them.

> We are already seeing the MVPDs trying to extend their bundling techniques
> to the Internet. The question is whether the congloms will continue to give
> the MVPDs exclusive distribution rights. The noise we have witnessed lately,
> as the MVPDs try to use the Internet to extend their franchise to mobile
> screens, suggests that the congloms want to sell their content to anyone
> willing to pay enough. 

The questions are more extensive than that, Craig. Whether the congloms will 
extend the exclusive distribution rights to the EXISTING MVPDs, like you say, 
sure. But also, whether the congloms will decide to create a similar structure 
for any ISP. Or whether the ISPs will take it upon themselves to put controls 
on what their subscribers can watch, e.g. different price structures for 
different content (with whatever "network management" excuse the FCC will buy), 
which will in turn motivate the content owners to demand a piece of that action.

I just can't put the same faith on the Internet to change things as you do.

Bert

 
 
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