[opendtv] Re: DTT in the US

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 6 Jan 2006 17:15:31 -0500

Craig Birkmaier wrote:

> The discussion was about mobile reception and the
> desires of certain companies to create products for
> the mobile market.

The discussion was about CE manufacturers being
perfectly willing to meet various global standards in
their products, such as those I had listed and Bob
replied to, but not ATSC. Mobility was not the topic
we were discussing. Check back. You weren't in on that
thread. So you got confused on what the subject was.

> In the latest round of bidding, completed in November,
> Channel 4 - a U.K. terrestrial broadcast service - bid
> in excess of 10 million pounds for the right to
> program a channel on Freeview.
> Contrast this with U.S. broadcasters who are looking
> for subscriber fees from cable and DBS for BOTH their
> analog and DTV channels. How is it that broadcasters in
> the UK can make enough money on their Fre-to-air
> service, to pay the bills and then pay more than 15=20
> million each year to get the same content on Freeview?

You can adopt either business model. Either the
distribution service can be compensated for carriage, and
the content creator gets all the ad revenues, or the
distribution service gets the revenues (ads and potential
subscription fees) and the content creator is compensated
by the distribution service. I have no reason to believe
that one scheme is inherently better than the other.

Existence of affiliated stations complicates this picture,
but the basics don't change, as far as I can tell.

> As long as broadcasters can control key content
> franchises, they do not need to be responsive to the
> needs of their customers. Viewers in the U.S. have become
> accustomed to paying for content, so the broadcasters are
> more than happy to get on the gravy train, as their
> lucrative franchise slowly rides west into the sunset.

Note: the discussion was about CE vendors, not broadcasters.
Why CE vendors aren't providing good quality ATSC products
in large numbers. You again introduced broadcasters in your
answer, and so be it.

If broadcasters are resonable business people, they will
not ignore the fact that a huge percentage of their
audience is using the OTA medium. If that's 22 percent of
households that rely only on OTA, it's more like 1 out of 3
viewers of broadcast channels is using the OTA medium. Or
more than that, according to the figures we've seen. Some
35 to 39 percent.

What's more to the point, we were talking about CE vendors.
Why is there a resistance to producing ATSC STBs and
recorders, when this large audience will migrate to ATSC?
The most likely *true* answer is that CE manufacturers don't
see any urgency yet, since the cutoff date is still years
away, and since they will be building in the DTT receivers
in all sets and recorders starting next year anyway.

> What IS relevant is that the percentage of homes that
> still rely exclusively on the OTA service continues to
> decline,

This seems completely false, from figures we keep seeing
year after year after year.

> Get real Bert. I'm not talking about the sub channel crap.
> I am talking about the content that is of interest to a
> significant audience.

That's what the subchannels are supposed to be for. As I
said, the multicasts are now different from different
broadcast stations. WB 54 in Balt and WB 50 in Washington,
for instance, transmit different multicasts. Broadcasters
can create any multiplex they want, to attract eyeballs.
The possibilities are endless. As far as I can tell,
broadcasters have yet to figure out what to do with all
this real estate, but my hope is that they'll use it
wisely. No reason why they can't offer content that cable
and DBS don't offer. Especially in markets like this, or
other major cities.

> The reality is that we can have a viable free-to-air
> multichannel service that provides REAL programming choice,
> without sacrificing the benefits of a local market
> orientation. But this is only likely to happen AFTER the
> existing DTV broadcast service collapses.

I guess my fundamental disagreement is that I don't see why
the existing structure needs to collapse first. I don't
think it does. But certainly, if there are anticompetitive
practices going on, such as residuals from subscription
services going to CE vendors, as was alleged on here, then
certainly that needs to be stopped. Ending must-carry would
not hurt the huge congloms you dislike so much, or their
affiliated stations, so I can't believe that solves
anything. It would just put the smaller stations in a bind,

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