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

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 29 Jul 2010 08:25:50 -0400

At 6:27 PM -0500 7/26/10, Manfredi, Albert E wrote:

Craig Birkmaier wrote:


 if each home pays $0.25 per month,
Wasn't an increase to that fee what caused all the rukus recently, for HGTV or Food Channel, on one of the MVPDs? Suggests to me that not all are asking for that much. My bet is that a whole lot of channels come in way below that number, or no subscription fee kickback at all. 

Sorry, but you would lose that bet.

http://www.trefis.com/articles/15139/time-warners-stock-depends-on-modest-subscriber-fee-growth-for-tnt-channel/2010-04-14
So, my bet is that a large station group could make a reasonable offering based on ads alone, for some of this non-prime content. Even if it means that initially, the station group would make next to nothing on this material.
Another bet you would lose. It is not possible to charge enough for the ads to make up the revenues collected in subscriber fees. TNT gets 60% of its revenues from subscriber fees. This is not unusual. And remember, these fees are paid by the vast majority of MVPD subscribers, not just the people who watch TNT.
Just like content owners ask for more when their content starts becoming MORE popular (everything happens gradually), so too can the delivery pipes ask for more content, at reasonable cost, as they get more viewers. Doesn't automatically mean subscription fees. Subscription fees are a good way to kill off OTA entirely.
They ARE killing off OTA, although retrans consent is helping to keep them in the game a bit longer.
For instance, somehow or other, months after the transition ended, certain stations have found it possible to air a 24 hour movie channel, "This TV," as FOTA. Fox45 in Balt and CW50 in DC air "This TV." It's a movie channel, older flicks, but still not something like old TV shows from a network's own archives (which might be really cheap to do).
Broadcasting old movies is OLD NEWS. They have been a staple for independent broadcasters for decades, for one simple reason: They are cheap. This is also true for worn out programming that was once important in the broadcast syndication markets. When I worked for out local ABC affiliate in 1979 the Andy Griffith shows was a big ratings draw in prime access (7-8 pm). Now you can get this show for next to nothing, which is what your ratings will be if you run it.
We need more of that sort of initiative. Or what our indie is doing with the 10 international 24 hour news outlets. Or what the NBC O&Os are doing with Universal Sports. And so on. Somehow, Craig, this stuff has been happening. It's not by any means all reruns of old TV shows.
Washington DC is a unique market with respect to international news. And it is relatively easy for congloms like NBC Universal to spin out niche channels for broadcast multiplexes. But this stuff still has to pay for itself. The stations still need to fill these programs with ads to make a profit.
What is happening is that it is increasingly difficult for independent broadcasters to survive. 

Regards
Craig


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