[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: Fri, 14 Feb 2014 10:19:40 -0500

> On Feb 13, 2014, at 9:32 PM, "Manfredi, Albert E" 
> <albert.e.manfredi@xxxxxxxxxx> wrote:
> That's only one possible measure, but even that wouldn't tell the whole 
> story. EVEN IF, in the aggregate, FOTA did not gain eyeballs (which I believe 
> it has, by a handful of percentage points), individual broadcasters may still 
> have come out ahead compared to others, with their choice of program streams. 
> Until the competition catches up, that is.

Yes, there has been a small decline in MVPD home since 2009. Cord cutting is 
certainly real, although it is difficult to determine how much is the result of 
a weak economy versus  the ability to access content in new ways. And we don't 
know if the cord cutters now use antennas, or are satisfied with the OTT 
services they can access. And we have no idea what percentage of the population 
has "gone off the grid," with not TV or Internet at all.

I agree that some broadcasters have made better use of DTV than others. In 
particular, multicasting has been useful in the delivery of niche content in 
markets with large ethnic populations.

The ratings book tell the real story, as this is how broadcasters justify the 
ad rates to reach these measured audiences. 

> It's much the same effect as HDTV. Perhaps at first, the station that 
> transmitted their local news in HD gained some market share for their 
> content. Eventually, after everyone else made the transition, that advantage 
> went away. But to the consumer, the end result was an across the board 
> improvement of the species.

There are many stations that STILL do not air their news in HD; and many others 
that got out of local news altogether. You could have picked a better example.

HD Sports was the major driver of HDTV sales over the last decade. After ESPN 
went HD, the entire industry quickly followed. And the market for "outside 
broadcast" vehicles exploded; not because of DTV, but rather, because the MVPDs 
filled up channels with live sports. 

This has fundamentally changed college football. Into the '90s a few college 
football programs dominated because there were limited opportunities for 
athletes to get the TV exposure needed to get attention from NFL scouts. Now 
almost every game is televised regionally, and there are many more national 
games. Athletes can now go to many programs that get TV exposure. 

> BTW, that article you posted on the TW/Comcast merger does make the point 
> that broadband may in fact be the real eng game here.

Yup! The critical "third leg" of the media conglomerate business.

Everyone understands that content will move to broadband...


I pointed out previously that the real threat to the current MVPD model is the 
shift from Appointment TV to Video On Demand. The DBS systems are likely to 
fail first, as they cannot make the shift to broadband. The cable and Telco 
MVPDs are sitting pretty, as they are already the duopoly that dominates 
broadband, and can easily re-architect their systems to shift bandwidth from 
"live streaming" of appointment channels to pure broadband.

But broadband is not a panacea. It can support the current MVPD business model 
too, although I expect a hybrid model to emerge. 

One interesting aspect of the stories I posted yesterday is the tension between 
Apple and the MVPDs in the area of VOD. Comcast has invested heavily in VOD, 
and is likely to resist a new business model where they still control  
appointment TV, but Apple, Amazon, Netflix, Google et al control, and profit 
from VOD.

The other warning sign was the projection that your triple play service will 
cost $200/mo before the end of this decade. Bert wants more people to reject 
the bundles outright. At some point the media oligopoly may price themselves 
out of the market, and the next Apple or Amazon will crush them.

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