[opendtv] Re: Cablevision to offer HBO Now streaming service - MarketWatch

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Sun, 22 Mar 2015 07:01:53 -0400

Regards
Craig
> On Mar 21, 2015, at 7:42 PM, Albert Manfredi <albert.e.manfredi@xxxxxxxxxxx> 
> wrote:
> 
> If HBO or anyone wants to sell over the Internet, net neutrality says that 
> the ISPs have to allow access. Plain and simple. If the ISPs have some 
> ulterior motive, some conflict of interest, what you call "business 
> decision," they cannot block access to HBO or whoever else.

It is a business decision when a MVPD who also offers broadband decides whether 
they want to sell a broadband version of a product they ALREADY sell via their 
video delivery infrastructure. Unlike the video portion of the content 
delivered over the MVPD wires, the broadband subscriber can decide who they 
want to buy content from; they can get HBO Now from Apple, Netflix from 
Netflix, or CBS All Access from CBS. It would only be a Net Neutrality issue if 
the MVPD blocked access to these OTT services over their wires.

On the other hand, the MVPD can choose to sell both the video HBO service and 
HBO Now, as Cablevision is doing. The only difference is they get a smaller 
share of the subscriber fee.

And there is another option: 

http://www.thestreet.com/story/12683212/1/netflix-channel-is-coming-to-three-cable-systems.html

NEW YORK ( TheStreet) -- In the midst of Netflix's public rejection of the 
proposed $40 billion Comcast and  Time Warnercable merger, Netflix has 
announced a a new deal of its own. 

According to a Washington Post report, Netflix has struck a deal with three 
smaller cable MSOs (multiple-system operators) to get its own "channel" of 
sorts on home cable TV boxes. The companies -- RCN, Grande Communications and 
Atlantic Broadband -- have agreed to be the first cable providers to include a 
special application on a number of their TiVO set-top boxes so customers can 
stream Netflix programming. 


A total of more than 500,000 customers will be covered by the new offer. Those 
customers will need to be both cable TV and Netflix subscribers to take 
advantage. Netflix will appear as another TV channel in the menu that customers 
could "tune" to on their cable boxes. When selected, the new Netflix 
application would launch.


> 
>> But this is not semantics to the MVPDs. It is a cut in pay.
> 
> That's the MVPD side of the house. The ISP side of the house is not permitted 
> to take that MVPD side in consideration. Net neutrality. Same happened in the 
> early 1900s, wrt ATA&T vs the small competing phone companies. AT&T was not 
> allowed to block access, even if it meant a "cut in pay" to AT&T.

Nobody is blocking access Bert. The MVPD is simply choosing what to sell. They 
can continue to sell the video service (which also provides TV Everywhere 
access to HBO Go), and they can now sell the Internet only service HBO NOW at a 
lower profit margin. They make more money selling the video service, but some 
systems charge more than $15.99/mo for HBO, so a subscriber might choose to pay 
less from Apple. 

It gets more interesting if Apple also launches a slimmed down VMVPD bundle, or 
if Dish starts selling HBO Now. Now the subscriber can cut the video service 
from the MVPD that is providing their broadband and get a MVPD bundle from Dish 
or Apple, along with HBO Now.

Not surprisingly, several cable companies have announced lower prices for the 
traditional HBO video service as I posted yesterday. 
> 
>> What rubbish. Nobody is denying anyone anything.
> 
> Really? So you can show that Comcast is happy to allow HBO to sell direct to 
> consumers, on its ISP bandwidth? Show me, Craig. You are contradicting what 
> the article plainly stated.

The only think "I can show" is that you will argue with everything I post. I 
cannot read minds, so I have no way of knowing if Comcast is happy about HBO's 
decision to add new middlemen that can sell HBO over ANY broadband service. The 
article assumes that the MVPDs are unhappy, which may well be true. They have 
lost an exclusive franchise, which may cause some existing subscribers to 
switch to HBO Now, or worse, to drop the MVPD bundle entirely. 

But they cannot prevent this from happening, and the new FCC Net Neutrality 
rules have little if anything to do with this. Even without the new rules, no 
ISP has blocked a legitimate OTT service, nor would they. It would be illegal 
under anti-trust law, And would create a firestorm of bad PR.

What we are seeing is the beginning of more meaningful competition for the 
delivery of video entertainment. You have been a big promoter of this, so you 
should be happy, but for some reason are not. Perhaps it is because we are 
evolving to a new order where almost all high value TV content is moving behind 
new pay walls?
> 
>> What Balkanization?
> 
>> You could buy content from iTunes too Bert...
> 
> Not the same thing. Once again, read the article. Do not invent things. The 
> article states clearly that this Apple OTT site is only for Apple hardware.

Yup. And Sony Vue is only for Play Station. And Google Play is only for 
Android. And Roku is starting to offer exclusive channels on their hardware. 
And corporations use the Internet to allow employees to connect to their 
Intranets. 

It's not Balkanization Bert. It's business. 

You have access to audio and video content from Amazon thanks to your Prime 
subscription.

The Internet is not going to change a fundamental premise in the entertainment 
business. Exclusivity is VALUABLE! 

It provides an incentive for people to subscribe to a service. HBO has been 
using exclusive content to attract subscribers for decades. Netflix is doing 
it. Amazon is doing it. Apple is doing it.

The Internet cannot prevent this. FCC Net Neutrality rules cannot prevent this.

Regards
Craig

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