[opendtv] Re: Broadcasters Lobby FCC for Cross-Ownership and Duopolies

From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
Date: Wed, 21 Jul 2010 18:49:49 -0500

Craig Birkmaier wrote:

> It is NOT a question of Sinclair agreeing to offer HBO content with
> commercials; this is simply absurd. The whole point of HBO is to watch
> premium content WITHOUT commercials.

So presumably, an HBO with commercials would be a complete failure. Right? So 
why can't station groups try? Why limit them with preconceived notions, as you 
have done? Never mind DVDs, Craig. Can FOTA station groups air HBO, funded by 
ad revenues, if they can make the numbers work out? Or any other cable-only 
channels? Can a station group say, "I'll pay this amount, and you let me air it 
any way I see fit, as long as I pay you the agreed to amount."

> Sinclair COULD create a movie service of their own using their spectrum.

And so could all MVPDs that are not TWC. But they don't have to, so they don't. 
And they benefit from the economies of scale that exist when multiple 
distrtibution pipes share the same content.

> The top five MVPDs are
>
> 1 - Comcast Corporation -23,447,000 homes
>
> 2 - DirecTV - 18,660,000 homes
>
> 3 - Dish Network Corporation - 14,337,000 homes
>
> 4 - Time Warner Cable, Inc. - 12,817,000 homes
>
> 5 - Cox Communications, Inc.  - 5,100,000 homes

So OTA TV, with ~18M OTA-exclusive homes served, by all rights should be 
allowed to be run by just one organization. So that one organization could 
benefit from huge economies of scale. OTA-exclusive is in the ballpark of 
DirecTV and Comcast. Or okay, let's be really scrupulous and split OTA in two. 
The numbers suggest this should be perfectly fair, Craig.

> Bottom line, however, is that it is not the rules under which each
> industry operates, but rather the business models that they can use
> that influence what they do.

I disagree. It is the rules under which they operate that limit what business 
models can be successful. It is very, very easy to level the playing field and 
find out if this isn't so. The FCC may have "no authority" to regulate MVPDs (I 
think you're wrong on this), but they certainly do have the authority to change 
the rules for broadcasters in a way that makes sense today.

> Look at -  O&O stations of the four major networks in
> the United States
>
> Here: http://en.wikipedia.org/wiki/User:Hinto/US_O&Os

Did you read the article? Doesn't give percentages, but it looks like NBC and 
ABC only own 10 stations each. CBS owns 16, but two were for sale in 2007. Fox 
had the most, 25, but 8 were for sale. And this wikipedia article applied to 
2007, so more may well have been sold by now.

If Fox was within the limit at 25 O&Os, which inlude all the major markets, 
this doesn't add up to anything like "most networks are close to their limit." 
In any event, this hardly disputes the main point, which was that OTA 
broadcasters DO NOT, in fact, create most of their content, nor are many of 
them owned by congloms that do. They should be treated like distribution pipes, 
not content creators.

Bert

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[opendtv] Re: Broadcasters Lobby FCC for Cross-Ownership and Duopolies

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