[opendtv] Re: Digital Trends: ESPN may pull its finger out of the Internet-TV dam, unleash a flood of change

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 4 Feb 2014 06:36:29 -0500

On Feb 3, 2014, at 7:47 PM, "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx> 
> .
> However, this article points out something else that Craig has a hard time 
> accepting. If all you're interested in is "unbundling," a lot of effectively 
> subsidized TV programs are likely to vanish. The article claims only perhaps 
> 20 channels would remain.

Come on Bert, you are WAY off base on this one. For years I have said much the 
same thing as this article about what would happen if someone decided to sell 
outside the bundles. Ala carte would destroy the system. 

I have stated on multiple occasions that only a few channels -like ESPN - would 
be able to keep charging and collecting that second revenue stream. Unlike the 
article, however, I have suggested that most channels would be forced to drop 
their subscriber fees, so that MVPD subscribers would be able to watch them, 
since most subscribers would not pay for channels they rarely watch. Nobody 
knows how long these channels would survive without the second revenue stream - 
my educated guess is that the channels that create original content would 
survive, while rerun channels might go away, in favor of VOD services.

> I have *serious* doubts about that. My bet is, perhaps only 20 glitzy and 
> expensive programs would survive, but then you'd get a whole lot of 
> amateurish content from sites like YouTube. No telling where this will go.

There is a whole lot of professional special interest programming you never 
see. This programming can survive on ad revenues alone if they keep their costs 
under control. Remember, the whole idea of subscriber fees came from the cable 
industry charging small fees for new channels to help them get established. The 
congloms loved this idea an created a bunch of retread channels for their off 
network shows (e.g. ABC Family, FX etc). It remains to be seen whether these 
channels could survive in an ala carte world, when most of the content they 
offer is available from VOD services like Netflix.

But Disney and ESPN are not stupid. They will continue to entertain offers to 
make content available to new Internet services, however, as the article 
stated, the price will necessarily be so high as to protect the MVPD bundles...

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