[opendtv] Re: Differing interpretations of the same data

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 18 Nov 2014 10:16:09 -0500

On Nov 17, 2014, at 6:18 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx> 
wrote:
> I already posted links which show that the MVPDs are ALREADY offering HBO as 
> VOD. Did you (as usual) ignore that? Do your own search, Craig. VOD is not a 
> differentiator. HBO and Netflix are already both available as VOD.

Yes Bert, HBO Go is available to those who subscribe to the HBO premium tier 
via a MVPD service. We have been through this a dozen times. The fact that HBO 
is planning to offer a separate service sold in a bundle with broadband is 
simply a competitive move to deal with cord cutters and cord never's. They have 
no choice as Netflix is eating their lunch. As I pointed out yesterday, Netflix 
views HBO as their main competition. This has nothing to do with MVPD bundling.
> 
> HBO and ESPN are following exactly the same trend. They used to be exclusive 
> inside the walls of walled garden MVPDs, and now they are both planning to 
> make their stuff available outside those walls.

Stop trying to link HBO and ESPN into the same trend -  IT ISN'T HAPPENING.
> Your insistence that "the bundle" is so different from "a bundle within some 
> premium tier," to me, is only an indication of a certain myopia.

NO Bert, it is a reflection of reality. 
> Take a look at this, for example:
> 
> http://digiday.com/platforms/hbo-cut-cord/
> 
> They too equate HBO cutting the cord with ESPN cutting the cord, and Starz, 
> and Showtime. VOD has, literally, NOTHING to do with this.

Incredible!

First, ESPN is not even mentioned in the article.

Second the article makes it clear that this is a play for cord cutters:


> How is this going to work?
> HBO intends to use the standalone streaming service to expand its audience 
> beyond the roughly 30 million pay TV subscribers it commands in the country 
> today. Of the 80 million U.S. homes without HBO, 10 million pay for broadband 
> but don’t subscribe to any pay TV service — a figure HBO CEO Richard Pleper 
> expects to rise in the coming years. That’s HBO’s primary target. But the 
> standalone service is also a defensive move, as more consumers forgo pricey 
> cable bundles and rely solely on premium streaming services like Netflix, 
> Amazon Prime and Hulu Plus for their video fix, said Dawson.
> 
> “The realistic scenario is they get some small fraction of the 10 million and 
> they keep some number of the cord cutters,” he said. “They’ll be doing quite 
> well if they get a couple million subscribers within the first six to nine 
> months.”
> 
And third, the article outlines three possible ways the service will be sold, 
including a direct to consumer approach, but then goes on to say it is highly 
likely HBO will work with existing MVPD/broadband partners to sell the OTT 
service as I outlined above.


>> A cord shaver that drops the extended basic tier where ESPN or Food
>> Network reside, can still take the HBO tier.

> And what you fail to realize is that this is only a **recent** MVPD 
> phenomenon, to compete against OTT sites. Here, watch this video, which 
> explains why this is happening now, dated 10/26/13:
> 
Pure BS. It has always been possible to subscribe to basic/lifeline and HBO.

> http://on.aol.com/video/comcast-creates-low-cost-cable-package-including-hbo-517988164

Did you watch the video?

It's old news that we covered when this "new" bundle was announced by Comcast.

It includes 20 channels of TV, that just happen to be the channels in the 
basic/lifeline tier (typically $25-30/mo). It includes HBO and access to HBO Go 
(typically $16 - 20/mo). And access to Comcast On Demand pay-per-view. And 
broadband ISP service (economy package is $19.99/mo)

So what we have here is yet another bundle from Comcast built with existing 
products sold in other tiers and bundles. How much?

$39.99/mo - that's a good deal!

Until the promotion runs out. Then the price goes up to $70/mo. 

Bottom line, nothing new here, just another bundle targeted at keeping people 
from cutting the cord.
> 
>> Thanks for confirming that you don't have a believable study
>> to back up your invalid assumptions.
> 
> I gave you three separate sources, all of which showed the reduction in MVPD 
> households over the past several years. And NONE of which said MVPD 
> households are now at 85 percent. The range was, for 2014, 82.1 percent from 
> SNL Kagan to a high of 84 percent from Leichman Research. And that's not 
> including cord shavers which have shaved off your "the bundle."

Thanks again. None of these studies confirmed your contention that MZvPD 
subscription have dropped to 79%. And I have provided multiple sources that say 
the number is 85%. We are quibbling about 1-2%.
> 
>> Many other sources place the percentage of MVPD homes above 85%.
> 
> **Show me one**, dated anywhere within 2014, and preferably the latter half 
> of. I have made it a point to ignore any sources from last year or before.

Of course you have. These studies always lag a year behind until the data is 
released.

I saw a report today that said the MVPDs lost 150,000 subscribers in the 3rd 
quarter of 2014 - that's 0.15% if we assume a base of 95 million MvPD homes. A 
loss yes. Reason to jump off a cliff? No.
> 
> With that attitude, you remain unable to see trends, until after they have 
> already happened. When transitions happen, it's invariably true that whatever 
> old system is giving way to the new. In the initial stages, it is invariably 
> true that the old scheme still holds the majority. Think of electrification, 
> for example. You're the guy telling us that candles and kerosene lamps are 
> all that matters, because way more people use them than light bulbs. And you 
> also insist that candles and kerosene lamps are being improved dramatically, 
> making them far more valuable than they are now.

This transition started after WWII, and will continue as technology enables new 
ways to distribute content. There is nothing new here Bert. The fact remains 
that the TV industry is controlled by oligopolies that have proven their 
ability to adapt to change, making MORE money with every shift. 

Are things changing? YOU BET!

Are you going to gain increased access to free entertainment?

Not likely.

>> but the trend is for MORE HIGH VALUE CONTENT to move behind pay
>> walls of all kinds, NOT LESS.
> 
> Partial success, perhaps? Are you changing your tune from "the bundle" to 
> "pay walls." Remember that I've repeated only about a million times that OTT 
> sites do not have to be free.

Does it matter Bert? You and I agree that distribution options are expanding. 

The bottom line is simple. 

The extended basic bundle is not going away - just the opposite, it is growing, 
in terms of the exclusive content it offers, the ability to access this content 
on mobile devices, and the ability to access much of this content on demand. At 
the same time new niche pay options - like the NBA league pass - are growing 
too.

The cost to access fresh, exclusive content continues to go up, not down.
> 
>> If the economy improves this "trend" is likely to reverse,
> 
> Or not. Pure speculation, as you like to say. All depends on how satisfied 
> people are becoming with the alternatives. The owners of content are 
> certainly not standing by doing nothing.

Speculation for sure. But it is based on real measurable trends. When the 
economy is on a REAL upswing, MVPD subscriptions have increased historically. 
Will it happen again? 

The more important question is whether the economy will ever recover, or if the 
trend is only treading water or down. Income levels for middle income families 
have been in decline for more than a decade. We have the lowest work force 
participation rate since 1978. Millions of people cross our border to provide a 
never ending source of cheap labor. And Millennials are still living at home 
and struggling to find jobs, even with a college degree. Fortunately they can 
use their parents MVPD authentication credentials to watch OTT video on their 
smartphones and tablets...

;-)
> 
>> This [cord shaving] has NOTHING to do with the extended basic
>> bundle.
> 
> That's funny. More than one article I posted EXPLICITLY MENTIONED that cord 
> shaving included people getting rid of ESPN and other higher priced bundle 
> favorites. I don't think you read anything you disagree with, Craig. That's 
> why the circular arguments.

The article you posted stated that people were cutting premium tiers like HBO, 
not the extended basic tier. No doubt some people are dropping the extended 
basic tier, but this number is small, as they can get essentially the same 
channels for free with an antenna.

Regards
Craig


> 
> 
> 
> ----------------------------------------------------------------------
> You can UNSUBSCRIBE from the OpenDTV list in two ways:
> 
> - Using the UNSUBSCRIBE command in your user configuration settings at 
> FreeLists.org 
> 
> - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word 
> unsubscribe in the subject line.
>

Other related posts:

  1. Home
  2. opendtv
  3. Archive
  4. 11-2014