[opendtv] Broadcasters vs. MVPDs: Economic effects of digital transition on television program supply
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 11 Jan 2010 15:20:54 -0600
A very interesting read:
http://www.indiana.edu/~telecom/people/faculty/waterman/Broadcastersvsmvpds-DW.pdf
Of note:
MVPDs have been able to benefit more from the digital transition than have OTA
broadcasters. Why? Simple. They have been able to increase their rates, for the
digital tier, for HDTV delivery, for VOD and PPV (although these last two are
barely a blip on the radar). And cable also gets broadband and telephone
subscribers.
But in addition, cable has been able to increase the rate they charge for their
analog basic tiers, faster than the rate of inflation.
So, this increased profitability is simply a function of MVPDs being capable of
charging more, even when their costs are not increased to deliver a given
service, and of consumers being willing to pay more, even when they get no
improvement in service. Examples of this are HDTV, a small increase in cost but
large increase in the digital and premium tier fees, and in the increase in
revenues for the basic analog tier.
I guess that's the point I've been trying to make about subscribers seeing
themselves as "victims."
Bert
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