[opendtv] Re: Democrats Air Concerns About Analog Switchover

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 22 Nov 2006 09:44:54 -0500

At 2:34 PM -0500 11/21/06, Manfredi, Albert E wrote:
I think we're looking at this from different perspectives. You look at
it from the point of view of what cable companies need to do to get that
premium content from the major networks. I look at it from the point of
view of what OTA broadcasters have to do to keep that cable revenue
flowing to them.

Why should OTA broadcasters get ANY revenue from a cable company. Do YOU send them fifty cents or a buck every month? The DEAL for the spectrum was that the broadcasters did not pay for it, and viewers get content for free in return for putting up with the ads. Cable carriage is critical to the broadcasters, as it forms the basis for ~70% of their potential audience (86% when DBS is added). The ad rates are based on the total audience, so broadcasters are already being compensated for the programming that is watched via cable or DBS.

But they want subscriber fees as well. Fees that make it desirable for you to put up an antenna instead of paying upwards of $40 month to watch advertiser supported TV.

It seems crystal clear that cable is extracting demands of the OTA
broadcasters that are detrimental to their OTA distribution medium. I
know you place no importance on that, but of course I do.

Exactly what demands are cable and DBS placing on broadcasters?

If the programming is popular the stations demand compensation for what you are watching for free. IF the programming is not popular they demand must carry, eliminating some other channel that the cable system could use to generate revenues.

The only thing that cable and DBS do that is detrimental to broadcasters is offer viewers programming choices other than the channels that you can access. And THAT is why they are in business today.

Cable and DBS companies advertize on OTA TV all the time. When was the
last time you saw an OTA broadcaster advertize his DTT offerings, or DTT
at all, on cable or DBS?

I see ads for OTA broadcasters all the time on cable. Likewise I see ads for cable and DBS on broadcast channels and hear them on radio. Some of these ads are the "compensation" that is negotiated for carriage. Some are just an honest effort to promote a business.

I have NEVER seen a OTA station promote DTT, on their own stations or via cable or DBS. I have seen broadcasters withhold their DTT signals from cable and DBS because they are unwilling to meet the demands of the broadcasters. We lost NBC-HD on Cox Cable here in Gainesville because of this. ON the other hand, as a cable subscriber I am constantly barraged with ads about the services that the cable company offers. In essence, they run these ads in any avail that they were not able to sell to an advertiser. Broadcasters have the same opportunity to use their unsold inventory to promote their service. They do it all the time with ads promoting programming. And they run PSAs, but they never promote DTV.

I'm sure you're right that this is caused by the weird affiliate
structure and the rules governing where cable companies have to go to
get the content of the major networks. And we both have our ideas of
ways out of this morass. Nevertheless, seems clear to me that as is, the
OTA structure suffers, not the cable networks. Cable subscribers are
good and addicted, and raising their fees does about the same thing as
raising the cigarette tax. Nada.

What's the alternative? Put up an antenna and watch the stuff I stopped watching nearly two decades ago, or pay. I almost posted a brief story about a Verizon price increase for their Fios service yesterday. The entry level price is now just over $40/month.

There is no choice Bert. Just a bunch of interdependent oligopolies maximizing revenues from the addicts.

(By the way, the Hoyas are the athletic teams of Georgetown University,
whereas La Jolla is the swanky town connected to San Diego. Pronounced
the same way.)

Yup. I was just tweaking John a bit. He's not your typical La Jolla resident, as he pointed out.


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