[opendtv] Re: DTT in the US

  • From: "Albert Manfredi" <bert22306@xxxxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sat, 07 Jan 2006 16:41:34 -0500

Craig Birkmaier wrote:

>YOU started this thread by posting an EETimes story about
>new LG and Samsung  phones that support various mobile
>TV standards. In that message you said:
>>I think this article shows just how much of a hindrance
>>physical layer differences can be -- or not be. If CE
>>manufacturers put their mind to it, that is.

Yes, Craig. And just prior to that, we had been discussing
the wide availability of DVB-T STBs in Euro markets, vs. the
much less broad choice to ATSC STBs in US stores. And the
fact that CE manufacturers can and do produce CE products
to meet all manner of different global standards ... until it
comes to ATSC, that is.

This LG and Samsung announcement was simply another
example of what we had been discussing in that thread.
Reference to mobility was tangential to the on-going
thread. Those two companies were not flinching at
offering products built to US-specific and more global
standards, which in principle they could also do with ATSC
vs DVB-T products.

>That is not the issue here. Bob responded that the
>manufacturers seem to have an aversion to ATSC, and
>you then took the thread off in a new direction, talking
>about Freeview

No, Craig. By "freeview" I mean FOTA TV. In the same
previous discussions, we had talked about how anything
that involved monthly subscriptions was supported by
CE vendors, apparently, while anything involving FOTA *in
the US* was not readily available. Despite the fact that
the potential is there, already installed. Which is why I
mentioned how many multiplexes we already have here,
as opposed to the much smaller number in many Euro
DTT markets that appear to become successful.

>Mobility is a non starter for ATSC, despite your wildest

That's another topic, interesting IMO, but it takes an open
mind to understand the issues.

>The rest of my response was about the reasons that
>you will not see a Freeview like service from U.S.
>broadcasters. It is worth noting that you changed the
>subject when you replied, turning the discussion to the
>overall U.S. DTT situation - Re: DTT in the US

That's because, much as I would love to understand the
real obstacles, what you offer as reasons does not hold
up. Broadcasters' greed, for example, is not a reason.
Capitalism depends on greed. It's supposed to work
with greed in the equation. Economics 101 says that if
people get hooked on subscription TV services to the
tune of 85 percent, when FOTA is also available,
perhaps broadcasters and content providers are not
being greedy enough when they sell to umbillical
service providers.

Then you go into the different business models, which
I agree with (diirect payment, ad supported, and ads +
subscription fees).

>My question to you - which you blew off - is how
>can Channel 4 afford to pay ~$15 million annually
>for secondary distribution via Freeview?

Obviously, neither you nor I have the books to point
to, to answer that question credibly. I'm simply
suggesting that they are operating under a different
model. That's why I listed the possible ways money
could be exchanged between content creator and
distrtibution service. If Freeview gets the $15M in
payments from Channel 4, how does Channel 4 make
money? I don't know the answer. For example, what
fraction of ad revenue goes to Channel 4 as opposed
to the Freeview distribution service? How does that
compare with US cable systems and their broadcaster

>Let me make this perfectly clear. The situation in
>the U.S. is NOT market driven. Broadcasters are
>able to extort additional revenues from secondary

It's just this sort of "explanation" that makes my eyes
glaze over. This is nonsense. Broadcasters can ask
whatever the umbillical service market will bear. It's
not "extortion." No one will die or freeze to death if
they can't buy that extra premium package, or if they
can't receive ER over their cable or DBS system.

>If broadcasters could only charge advertisers for
>the home they reach via the Free-to-air service the
>ad rates would by necessity be MUCH lower, as
>approximately 80% of the audience is accessing
>this content via secondary distribution. But U.S.
>broadcasters not only charge advertisers for these
>additional eyeballs, they also are trying to get those
>eyeballs to kick in a direct payment every month as

Again, the exact tradeoffs are what we need. If
broadcasters could only charge advertizers based on
15 to 20 percent of their real viewership, neither you
nor I have the slightest idea how that would percolate
through the content creator industry.

>It is not a question of profitability. U.S. broadcasters
>generate more than $15 billion in ad revenues each
>year, and this is in addition to the more than $15
>billion in ad revenues collected by the networks with
>which they are affiliated.

This has little to do with it. If profits are truly obscene,
the market is supposed to self-reguilate. Sorry, but
this sounds a bit the the behemoth SUV owner who
complains about the price of gasoline. My reaction is
always, "it can't be high enough, if you're still drrving
to work in that." Even if I might agree that the
entertainment industry (or the petroleum industry) is
making too much money, when I look at the demand
side of the equation, it becomes awfully hard to fault
the supply side. Same goes for pro athletes. What
they charge is what addicts out there are pefectly
willing to pay. Who's to say that's too high??

>The original discussion was about CE vendor support
>for mobile TV.

Not even remotely close.

>CE vendors are not providing good quality ATSC
>products - according to you - in large numbers. But
>according to you, the Acurian receiver you just
>purchased seems to be a good quality product. So I
>guess the issue is numbers, not quality.

First, I bought it on closeout sale. I did ask Radio Shack
if they are planning an updated product, though. No
response yet.

Secondly, I make no special claims about the Accurian,
except that IN MY SPECIFIC CASE it works just fine,
and quite a bit better and more satsfying than the
NTSC service I also get. I don't have the history of
tests of different products like Mark Schubin does, on
which to base any DTT reception comparisons.

So why aren't there gobs of sub-$100 STBs available
on the store shelves? Why aren't broadcasters
transmitting announcements about their DTT offerings?

>The reason for the low numbers is obvious. They are
>not many people like you left in the United States;

Not this AGAIN. There are something like 20 million
househoilds and 80 million actual TV appliances, if
not more than that, that depend on OTA service. So
let's stop repeating that old song, Craig. That's plenty
huge enough for any CE vendor to go after.

>They will not be building ATSC receivers into all sets
>and recorders this year

March 2007.

>And by the way, there is nothing anti-competitive
>about cable or DBS paying CE retailers to promote
>their service.

Promoting would be a retailer's job, not the CE
vendor's job. And "promoting" is not what we are
talking about. We are talking about collusion.

A retailer who lies to his clueless customers about
the availability of competing *third party* products
or services is not exactly on the up and up. In a
true open market, that retailer would possibly
promote a third party service or product without
shutting out the competition. But the CE vendor
angle could be even more insidious (if true).

If subscription services pay residuals to CE vendors
for building products to their non-standard, the CE
vendor is encouraged not to build competing
products which don't provide this same steady

In a true open market, the CE vendor gets compensated
for what he sells. He is not paid for *not* producing a
competing product. Mind you, this was alleged. I'm not
stating to you that it is fact.

In politics, that's called a bribe.

>The question you should be asking is WHY broadcasters
>are not paying CE retailers to promote their service?

True enough. One way to stop the effect of bribery is to
allow bribery to be conducted freely. This doesn't seem
to work very well in real world cases, but it's a thought.

I agree that broadcasters should promote their DTT tier
openly, and that they don't do this close to adequately.
I don't necessarily agree that they should provide
kickbacks to CE vendors to keep them from building
competing products.


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