[opendtv] Re: Distribution outside of "the bundle"
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Sat, 6 Dec 2014 09:52:05 -0500
Regards
Craig
On Dec 5, 2014, at 9:18 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
>
> You're missing it with an overly vague comment. We are dealing with content
> previously available only inside "the bundle," for current episode delivery,
> which the content owner has decided to provide through a parallel pipe. To
> remind you of your former positions on this score, two quotes from the recent
> past.
No Bert, this exclusive content is only available on a parallel pipe on a
delayed basis, and at an elevated price, while it is being made available to
the extended basic subscribers.
>
> Re: "The TV model is broken," says ISP that stopped offering pay-TV
> Tue, 7 Oct 2014 07:54:37 -0400
>
>> Dream on!
>>
>> The marketplace distortion we are stuck with is called the content
>> oligopoly. Viacom DOES INSIST that their content be bundled with
>> Disney content, and Comcast NBCU content and FOX content. That's
>> the way they keep the subscriber revenue stream flowing. Each of
>> the congloms has a few flagship products that everyone wants - the
>> bundle allow them to force us to take the rest.
This was a small MSO who got out of the TV bundle business to focus on
broadband. My comment is completely accurate.
>
> Glad you picked Viacom, because it was in fact CBS that decided on a direct
> to consumer scheme recently. And this The Walking Dead example is also
> contradicting your notion.
And this comment was unrelated. CBS is making a VOD play for their library.
We've been over this too many times to mention. And the Walking Dead example is
proof of what I have been saying: all of these extra middlemen are cream
skimming, as AMC is committed to the extended basic bundle. You did not provide
any evidence that AMC is devaluing the bundle.
> And
>
> Re: Forbes: Old Media Can Still Thrive, But Business Models Need To Adapt
> Sat, 27 Sep 2014 06:49:21 -0400
>
>> The bundle is making both the content owners and the distributors
>> who license their content A BUNDLE!
>>
>> On top of this new business models are emerging that allow the
>> content owners to make more money off of their old program
>> libraries.
>
> Not old libraries either, as The Walking Dead example shows.
Out of context. You are correct that the content owners are making fresh
content available to more middlemen, something we have discussed several time
recently. They now understand the value of the delayed and catch-up market
segments.
Ans some of these middlemen - like Netflix and Amazon - are exploiting the
older program libraries. You WILL NOT see current season shows on these VOD
services, except for the original content that Netflix and Amazon are
financing. They are downstream in the food chain.
>
>> The story you posted included iTunes pay per episode for The
>> Walking Dead.
>
> Close, but ultimately irrelevant. That iTunes option is a pay per view model,
> which is different from a live or VOD distribution of "the bundle" content
> such as this. The Amazon package is that same bundle content, available VOD
> (as it could be within the walled garden), episode by episode right after
> they are aired, for a single fee, and the content is provided outside the
> bundle entirely. No MVPD subscription required. No subsidy of ESPN required.
> No "old library" involved either.
Yes the iTunes model is different than the live model for several reasons:
1. It is delayed until the live performance has aired;
2. It IS NOT pay per view - you purchase either an episode or a complete season
and can watch the content ON DEMAND across ala compatible iOS DEVICES. You OWN
the content, but it is typically streamed on demand from Apple servers, as
downloads take up a huge amount of local storage.
3. It IS a VOD service.
Apple also offers rentals that are viewable for 30 days, or 24 hours after you
first start playing the content.
Amazon offers similar options.
And YES Bert, none of this has anything to do with the MVPD bundles. This is
not a new phenomenon. Apple has been selling TV shows and movies for a decade.
For more than a decade before that you could buy movies and TV shows on VHS and
DVD.
So please stop trying to tells us that the world has changed. The business
model and perceived value of the extended basic bundle is a different market
than selling TV shows and movies. Obviously one does not damage the other, as
the growth of the extended basic bundle happened in parallel with other forms
of PAID distribution.
>
>> Nothing you showed me in that article undercuts the fact
>> that AMC believes in the extended basic bundle - I even
>> posted an article where their CEO said exactly that.
>
> Not true. Take the consumer considering cutting the cord. He is addicted to
> The Walking Dead. If he can watch the current season, for $27, with only a
> broadband connection, do you think he will be encouraged or discouraged from
> cutting the cord? If he can catch similar other favorites, over Amazon or
> Hulu, or direct to the network site, will he be encouraged or discouraged to
> cut the cord?
Depends on how many shows they want to watch, how important the exclusive live
content in the bundle is, and whether they are collectors. Many people
subscribe to a MVPD service AND buy movies and TV shows for their collections.
Many cord cutters don't pay for stuff because they don't watch enough TV to
justify the expense, or they are suffering from an economic hardship, like
unemployment.
Just remember, these options have been available for decades...they are just
being made more convenient thanks to Internet streaming.
>
> We are seeing more of this, not less of this. There *are* counterexamples,
> like the Aljazeerza decision to hide behind garden walls exclusively, which
> only makes them seem out of sync with the times. Or perhaps, they were so
> less-than-popular the the artifical "the bundle" enforced revenues were way
> better than they could get in a market demand model. Obviously not the case
> for this AMC series, eh?
AMC is spending hundreds of millions on original content like Madmen, Breaking
Bad and The Walking Dead. The primary reason for this is to get people to watch
AMC. But close behind is the money that can be made through Rosales of popular
programs.
Here is an excerpt from a very good article on the economics of a hit TV show.
ZBert should read it...
TWICE,
http://priceonomics.com/the-economics-of-a-hit-tv-show/
> Ten million Americans can recall where they were the night of September 29th,
> 2013. They were watching the series finale of Breaking Bad. And they were
> watching it on AMC, a cable channel that once cut its teeth airing reruns of
> black-and-white movies.
>
> The suits at the network were prepared. Like Walter White, the show’s
> ruthlessly efficient meth dealer, they knew they had a quality product on
> their hands. And they charged their customers accordingly. AMC extended the
> runtime of the last two episodes from 44 to 54 minutes – 75 minutes apiece
> with commercials – and raised its advertising rates to as much as $400,000
> per 30-second spot. The 21 minutes of commercial airtime in “Felina,” the
> show’s final episode, may have earned the network $7-8 million in advertising
> revenue.
>
Note: this episode cost less than $4 million to produce and will produce many
millions more in licensing to Netflix, Amazon, et al.
AMC understands the TV business. They know you need exclusive content to help
promote the other live streams that are primarily old library movies. They
understand the value of the extended basic bundle AND the value of creating
original content.
Regards
Craig
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