[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: Thu, 13 Feb 2014 02:55:46 +0000

Craig Birkmaier wrote:

> But the second tier content that fills up the multiplexes does little
> to draw eyeballs from the more popular first tier networks.

You can't substantiate that statement. Take, for instance, our Univision 
channel. It only attracted a Spanish speaking audience, right? Now they added 
and English language subchannel. Do you think their audience share will go up 
or down?

Take for example our CW channel. They added both English and a Spanish language 
movie subchannels. Since most CW programming is for the teen crowd, do you 
think this broadcaster made its multiplex more or less attractive?

Or take our PBS station. They added a subchannel dedicated to UK TV shows. I 
wouldn't be a bit surprised if some of these shows won't take eyeballs away 
from US network shows. They might just attract people who otherwise rarely 
watch TV!

So, when you claim that the subchannels won't bring more eyeballs, I can't 
understand what you mean. In the aggregate, probably not. Take your objection 
to its logical limit. You seem to be arguing that it would be best to have a 
single program on TV, or a single supermarket in your city. That's absurd. 
Competition is increased with DTV, just as competition increases when a new 
food market opens up in town. The fact that the incumbents don't like it 
doesn't change ANYTHING. The fact that PROFITS don't increase doesn't change 
anything either.

> Not all competitors profit equally.

And your point is? If the incumbent loses out to the newcomer, it's because the 
newcomer is doing something better. The consumer wins. If the incumbent and the 
newcomer both survive, they will only do so by constantly improving. The 
consumer still wins. Economics 101.

> The younger folks have a good excuse to reject the bundle gouging -
> they need jobs.

And that too doesn't change my point. If reality is that the global economy has 
somewhat leveled the playing field, the entertainment industry is going to have 
to adapt. If the MVPDs can't figure out how, the Internet is now allowing a 
whole host of other players to show the way.

> They are subsidized by subscriber fees, not other channels.

No, Craig. Subsidized channels, the little niche ones, also get exposure by 
being in a tier. When people surf channels, they catch a bit of this niche 
program, and might just visit it again. So that exposure is subsidized by the 
existence of desirable channels in the tier. If bundles didn't exist, I repeat, 
the little niche programming would most likely vanish. (And never mind ESPN 
being subsidized.)

> I have suggested for years that the less desirable channels would drop
> subscriber fees to remain accessible to all MVPD subscribers

With what revenues? I've already responded. No subscription fee subsidy, tiny 
ad revenues, doesn't seem like a viable business model.


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