[opendtv] Re: Distribution outside the bundle
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 24 Dec 2014 09:28:50 -0500
> On Dec 22, 2014, at 8:33 PM, Manfredi, Albert E
> <albert.e.manfredi@xxxxxxxxxx> wrote:
>
> How does that make sense? They got retrans consent for the FOTA program
> content because they were (correctly IMO) claiming they should be compensated
> as other cable-only channels were, when this stuff was sent over cable. The
> fact that these same congloms also produce much of the cable-only channels is
> a separate issue.
Sorry Bert, but this was not the case - the broadcast network is a strong
bargaining chip and has been used to tie other channels in licensing
agreements. Immediately after the '92 act became law, most of the networks
asked for additional channels with prime placement in the system channel
lineups rather than monetary compensation. This tactic was used to obtain
carriage for networks like CNBC, MSNBC, FX, ABC Family and many others.
>
> The congloms, however, knowing that their material was sent to the majority
> of households over a monopoly pipe, could then make other demands, e.g. on
> how these programs would be bundled. It's a lot more difficult to make such
> demands, if you have a ton of different distribution schemes available to any
> household. And when you see CBS and HBO going direct to consumer, that
> signals a tremendous change.
At least you seem to understand the power the content owners have over the
bundle. But you can't quite grasp the fact that they use this power over
multiple distributors who compete with one another. The demands are made as
part of the licensing deals with each distributor - cable, DBS, the Telcos, and
now virtual MVPDs.
Fox News and Fox Business are currently being blocked by Dish. If you go to the
FNC and FBN websites there are banners encouraging Dish customers to complain
or to switch providers. Having multiple options in the distribution oligopoly
allows the content owners to put some pressure on a distributor when they block
content.
And once again, the CBS All Access and HBO OTT services do not threaten the
existing business model. We've been over this many times, so please drop it.
>
>> The only significant change to the TV landscape is that new content
>> congloms -Time Warner and Viacom - were created around the cable
>> networks they created.
>
> And you don't think that being able to get previously "exclusive" "the
> bundle" programming over sites such as Hulu makes any difference?
Not at all. Redistribution via syndication (licensing) is an essential part of
the content business. Why would anyone produce a show, then sit on it? content
has a life cycle - for some types it is very short, for other types it can be
decades.
Live sports has very limited value after the event is over. There is some
opportunity to offer replays for a short time after the event - ESPN runs
replays during overnight hours to fill up the schedule, and may play "classic
games" years later, again to fill up off hours. Apple offers a limited number
of NFL games for sale for a few weeks after they were played. But for the most
part, sporting events have limited shelf life.
High value pre produced episodic programming may have years of shelf life, and
be sold to many middlemen at many prices as the market value declines. The
first run is most valuable to advertisers as it still can attract large
audiences ( 1 - 10 million viewers). We now see programs being sold immediately
via season passes or on a per episode basis. We see licensing deals with Hulu
and Hulu Plus that offer shows with short delays from the original broadcast,
and we see licensing deals wit SVOD services like Netflix, typically a year or
more after the original broadcast. We see syndication of shows on a global
basis to broadcasters and cable networks - some shows stay in syndication for
several decades, and there are cable networks like Nickelodeon that specialize
in decades old content.
Bottom line, whether a program was exclusive to a broadcast or cable network,
it will be licensed in many ways, with the trend moving to shorter delays after
the original broadcast.
> Remember how "the bundle" was used to have non-sports-fans subsidize the
> outrageous salaries of pro athletes? How is it not significant that making
> this "exclusive" content also available over Hulu, not to mention Amazon and
> others, changes that landscape? If you can get this content outside MVPD
> walls, without waiting, that's a huge difference.
You cannot get the non sports content without waiting. In some cases, like the
broadcast network sites the delay may be short 1 - 7 days. In some cases you
can pay a premium for a short delay - e.g. buying a single episode or season
pass from iTunes or Amazon. Or you can wait a year or more until programs hit
the SVOD sites.
You completely miss the bigger picture here Bert. The fact that it is possible
for you to access many programs in a relatively short period of time reflects
only on YOUR viewing desires and behavior. There are many reasons people are
paying $60-70 a month for the extended basic bundle.
- Access to live content including news and sports
- Access to a variety of special interest networks including first runs of
popular shows
- and now TV Everywhere access on multiple devices anywhere you can access the
Internet (including immediate VOD access to recent shows, and VOD libraries)
Monday night I had to work late, so I watched the NFL game on Watch ESPN on my
iPad.
>
> IT ALREADY HAS! See above. You just posted a story about how a current FX
> program is not exclusively in that MVPD pipe anymore.
Sorry Bert, these are not leaks in the MVPD system. They are business as usual.
Exclusivity can involve both the ability to access conten, and the delay before
it become widely available in secondary distribution.
I posted a story about how a popular FX program was just licensed to a
secondary middleman. And this license provided exclusivity to Hulu for a period
of time before Fox will license it to more middlemen.
> You're not listening, Regards
> Craig
>
Both Hulu and Amazon (and Netflix) are spending millions to produce original
(exclusive) content. When you pay for someone to produce original content you
OWN the rights to the first run. And you can buy exclusive rights to the
secondary market for a time period that is set as part of the license; there is
nothing new here.
a·nach·ro·nism
əˈnakrəˌnizəm/
noun
a thing belonging or appropriate to a period other than that in which it
exists, especially a thing that is conspicuously old-fashioned.
"everything was as it would have appeared in centuries past apart from one
anachronism, a bright yellow construction crane"
an act of attributing a custom, event, or object to a period to which it does
not belong.
The only anachronism in the room is you Bert.
>> So are you suggesting that the primary provider of high speed
>> broadband in the U.S. should be forced to divest this asset,
>> or spin broadband out into a separate company that cannot bundle
>> TV services?
>
> Yes, the latter, most likely. Otherwise, you have a conflict of interest. You
> might be interested in reading up on the history of telephone networks, which
> went through a similar problem.
Would make for an interesting court case.
> There are more congloms and other TV content owners than there are MVPDs
> available to almost any given household, and by far. So this perpetual mantra
> of yours is simply not convincing, Craig. The monopolistic "long pole" is not
> where you think it is.
Really? Five companies own 90% of what we watch on distribution pipes owned by
a parallel oligopoly. And now they are consolidating - e.g. Comcast and
NBC/Universal.
> The report explains how these ISP nets have to (and are) evolving, and I've
> already explained that to you. Do you listen? Here's the quote, toward the
> end:
>
> "The distributed caches are co-located or are integrated in the BNG, and are
> cost-optimized for delivery of popular content. Caches deeper in the network
> are cost-optimized to support a broader content library of less frequently
> watched content for a large audience.
And the report said that this has not happened yet - i.e. It is a work in
progress that will take years. The point was/is that we are not there yet Bert.
But we are moving in the right direction.
>
>
>
> That's how it's done, Craig.
That's how it will be done Bert.
> I repeated this a zillion times. The content owners will certainly exploit
> luddites such as Craig, as long as these luddites can't see outside the
> garden walls. But it is these content owners themselves who have noticed how
> their customers are changing their viewing habits. So we have seen FX, AMC,
> HBO, CBS, etc. investigating and implementing new options.
Customers have been changing their viewing habits for decades Bert. Evolving
technologies enable new opportunities. And with each step in the evolution the
content congloms have grown more powerful and profitable.
>> And yet Craig continues to insist:
>> This is not going to happen Bert.
>
> Right, Craig. And HDTV is only a "niche" market, HDTV sets will remain way
> too expensive to become mainstream, and ATSC receivers are going to add $200
> to every TV set. Do you not sense somewhere that we have been around this
> circle many times?
Bert
You are a master of circular arguments and twisting other people's words in an
attempt to make your points.
Yes HDTV happened as it became affordable. ATSC was mostly irrelevant, has
never worked well, and is already being replaced.
Yet over the same years content has become more expensive as it has moved
behind various pay walls, even as it migrates to the Internet.
Regards
Craig
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