[opendtv] Re: Commissioner Copps on Internet openness
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 23 Nov 2010 07:37:41 -0500
At 5:36 PM -0500 11/22/10, Mark A. Aitken wrote:
Thanks Craig.
Round numbers (if I am off base, please stop me!)...some $30B flows
in the MVPD arena for cost of programming. Based on whose numbers
you believe (NEWS FLASH! Nielsen TV Diary-Only Ratings Lose MRC
Accreditation - 154 markets!), some 40-45% of television viewing is
local television! Less than 3% of the revenues that flow to
programmers comes to Broadcasters! Retrans negotiations are trying
to give "balance" to a situation that can be blamed on the
governments (FCC) practices of the 80's that allowed cable companies
to prosper without any means for local broadcasters to get
compensation.
KEEP THE GOVERNMENT OUT OF THE FREE MARKET!
Not sure if Mark and I are in agreement here or not.
;-)
What seems clear, especially in light of the stuff I've posted this
morning, is that the congloms and their affiliates are not on the
same page. One must ask if broadcasting can survive if the broadcast
networks move what's left of their "quality" content to cable, or
bleed retrans dollars from affiliates in return for continuing to
support FOTA broadcasting.
By the way, I've seen estimates that Disney gets more than $30
Billion from ESPN alone. Some simple math.
Average monthly ESPN subscriber fee: $3.50 (may be approaching $4)
80 million extended basic subscribers
3.50 x 12 x 80 million = $33.6 Billion
I also would like some clarification with respect to the 40-45% of
viewing being local television.
I think this is in the right ballpark if we are talking about ALL
programming including network prime time shows. I think the number is
very small if we are talking about locally create content like news
and public affairs shows.
And herein lies the problem. Can companies like Sinclair and
associations like the OMVC and Mobile 500 Alliance, fund the
development and/or licensing of content to populate the new mobile
DTV channels. Can this service get off the ground if the congloms
refuse to permit simulcasting, impose untenable license fees, or
worse yet, pull the plug on FOTA Broadcasting?
And finally, I would point out that the cable industry burned huge
amounts of money during the '80s - remember the junk bonds to fund
hundred of millions in plant expansion and the development of new
networks that did not make a profit until the '90?
One could call this a prudent investment, but it is difficult to say
that the cable industry prospered during that decade. Cable may not
have compensated broadcasters directly, but they did expand the
broadcast audience, which in turn allow stations to charge a bit more
for commercials.
To put this into proper perspective...
Let's assume for a moment that Congress suddenly decided to actually
protect consumers and passed a law prohibiting subscribe fees for ANY
content that is advertiser supported. In other words, the only form
of compensation would be from the ads, the cost of which would be
based on the number of people viewing.
If this happened, I would ask Mark:
Would broadcasters pull their signals from the MVPDs and risk losing
a large portion of their audience?
Would they compete with cable, negotiating to carry what are now
non-broadcast networks, creating a Freeview type service?
I think Mark and I are in agreement on the most basic level. It's
time to get the government out of the marketplace for TV content.
Regards
Craig
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