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

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 12 Feb 2014 01:20:43 +0000

Craig Birkmaier wrote:

>> The objective is to increase competition, Craig. The total audience
>> share is already as close to 100 percent as it's going to get!
> Nice description of the world in the '60s. But more choice does not
> equate to more viewing;

More competition CAN'T result in greater aggregate viewership, once TV market 
penetration is as close to 100 percent as it can be. The point is not to 
increase the aggregate viewership. The goal now is to attract more eyeballs to 
your particular TV station's multiplex, **robbing those eyeballs from someone 
else's multiplex**. That's why it's called competition.

> Competition is good, but not necessarily profitable.

Well, yeah! Greater competition results in thinner profits. TV content owners 
can't simply gouge more, as you keep suggesting. Economics 101 tells you that 
with more competition, they won't be able to, Craig. The younger generation are 
proving more capable that older folk to resist the ever-increasing gouging.

> The dramatic rise in specialty niche TV channels was fueled by the
> growth in capacity of the MVPD systems.  It provided market access
> for all manner of special interest programming,

Only because they are subsidized by more desirable content in their tier and 
because the congloms (or sometimes the FCC, for the really boring stuff) twist 
the arms of the MVPDs to carry this content.

If your a la carte ideas came to fruition, most of those niche programs would 
vanish, Craig. On the other hand, if they are truly "desirable enough" on the 
national scale, then their ad revenues would reflect that fact. This niche 
programming is probably similar to the OTA subchannel programming, which is 
also on a national scale. I don't know this for sure, but my bet is that the 
ads from the main -1 subchannel often do help subsidize some of the 
subchannels, at least until the station lands on a good combination of 

> Services like Netflix are growing because of convenience AND the freedom
> from commercials.

Come now. They flourish because of the value proposition. Low monthly fee for 
lots of choice, and always on demand. The more people get used to VOD TV, the 
more they will realize that by appointment TV is a nuisance. I'll bet you that 
a strong deterrent to time shifting was the slavish dependency people had to 
their cable STB, coupled with cluelessness about how to make their old VCR work 
with the cable box. I agree with you that a big threat to the MVPD business is 
that they depend heavily on the 1950s appointment TV model, and I'm saying that 
the Internet is helping to change that. MVPDs have not *yet* been able to 
emasculate your PC, as they did your VCR.

> Popular sub channels like CW and MyTV do draw a profitable audience.

CW is a main channel in "real" OTA markets. These are still relatively early 
days for this expanded OTA scheme. One subchannel I bet is in demand is Mundo 
Fox. They show better, more recent movies than a lot of other subchannels, 
dubbed into Spanish. The Movies! Subchannel isn't bad either. Both of these are 
very recent additions, which tells me the broadcasters are still experimenting. 
The 24 hour news and weather channels have disappeared, perhaps because people 
use their smartphones and tablets for that now.

> When we were debating the addition of multicasting to the ATSC standard,
> many broadcasters were adamantly against the idea. In essence they said
> "Why would we want to dilute the market for our primary service.

All I can say is, I'm sure the local blacksmiths were adamantly opposed to the 
guy setting up a gas station in town. Staying in business is not guaranteed to 
be easy. There's no question that the customers were happy to get more choice. 
Staying in business requires doing what the customer wants. Or someone else 


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