[opendtv] Re: ESPN Scores Top Audiences in Cable History with Semis | Multichannel
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 9 Jan 2015 10:14:48 -0500
>
> On Jan 8, 2015, at 7:50 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
> wrote:
>
> I know I've said this before, but I'll emphasize it now. The real difference
> is UNWALLED OPTIONS. Where in the past, you had whatever bundles and tiers
> *a* local monopoly offered, now you have bundles and tiers from a huge
> (potential) assortment of service providers, in every location. That's a huge
> difference.
I think we might be getting somewhere. It looks like the problem may be how
Bert and I are defining "walled," or "unwalled."
For years Bert has called the MVPD bundles walled gardens. Now he is telling us
that a VMVPD operating via the Internet is UNWALLED, while a virtually
identical service offered via cable or satellite is WALLED.
I have consistently used the term walled garden to refer to any services that
requires a subscription (paid), especially as it relates to placing exclusive
content behind a pay wall to help sell the service.
And Bert also uses the term walled garden to refer to services that require
hardware from a single manufacturer - I particular he has criticized Apple's
iTunes and App Stores in this regard.
So some of our disagreements result from the application of this term.
I agree with Bert that the Internet is beginning to offer real competition to
the traditional facilities based MVPDs. Geography is no longer a gatekeeping
pre-requisite.
It is worth noting, that these traditional services honor the geographic
boundaries that define the market based broadcast system we have in the U.S.
Thus a cable system must offer the local broadcast affiliates - they cannot
import the same content from distant markets. The DBS systems offered the east
and west coast network feeds to subscribers who could prove they did not get
good reception of broadcast signals. Now the DBS systems mimic the cable
companies, offering local stations based on the geo-location of the receiver.
The difference is that DBS customers are not required to buy the local
stations, while cable customers are.
The Internet provides the ability to create a service that is not bound by
geography, in fact there can be many services offering the same content. At the
same time we hear Les Moonves telling us that CBS does not care how we watch
their programs - a viewer can choose the local broadcaster, CBS.com and various
CBS apps, Hulu or Hulu Plus, or CBS All access.
Apparently protecting local broadcast affiliates is no longer a necessity.
Clearly Bert is right about the potential for the Internet to provide
meaningful competition to the facilities based systems that are still stuck
with subscribers who must take the bundles offered. Systems that still offer
analog service cannot sell individual channels or mini bundles. Digital Cable
and DBS services can, but continue to play the "big bundle game."
But the ability to offer more options via the Internet still depends on the
willingness of the content owners to license their shows without the
restrictions they have traditionally imposed on the facilities based services.
It appears that the content owners, at least CBS and Disney, are starting to
allow new services delivered via the Internet to offer new kinds of bundles.
So while these new services are still walled gardens by my definition, Bert
sees them as being unwalled. We agree in the sense of the new non-geographic
competition.
>
> For example, to stay within the MVPD model you seem to cherish, do you have a
> choice of getting Comcast TVE service where you live, Craig? No? Why not? Why
> should Comcast be so polite as to not offer its Internet-based TV service in
> Cox territory? That's silly anymore, and consequently, **it is bound to
> change**.
It is certainly possible. It is also possible that we will wind up less
competition, as the remaining MSOs consolidate into 2-3 companies (e.g. The
Comcast/Time Warner merger).
There is also the question of local franchise agreements. Local governments may
have a say in this too. Los Angeles tried to make the DBS systems pay franchise
fees. They may not take kindly to Comcast competing with Cox Cable in
Gainesville.
> Not again with "not going to happen." The price being asked by Sling TV only
> tells me that the other channels are asking next to nothing, and that this
> Sling TV service amounts to ESPN direct to consumer with very tiny extra
> bennies.
You can be sure that every channel in the Sling bundle is being compensated at
least as well as they are by the the other MVPD services. It might be fair to
say that Sling is heavy with Disney content (which includes ESPN), but it does
not mean this is ESPN Direct.
You can't have it both ways Bert. You keep telling us that people are cutting
the cord to avoid paying for sports. I think it is ludicrous to suggest that
only people who want ESPN will subscribe to Sling. The issue is paying for the
channels "you" want. Sling pares down the core bundle and let's you choose from
mini bundles that better suit you tastes - but you will still pay for channels
you don't want. sPN is in the core bundle because it helps sell the bundle.
> ESPN could play that game on its own too, maybe adding more regional sports,
> college sports, high school, what have you, or even non-sports content. They
> NO LONGER need to worry about getting into some popular (and lucrative)
> locally-monopolistic "bundle." They can even remain in the Sling TV bundle,
> not to mention others, while offering their own service, so what?
Not gonna happen. They need to be in as many bundles as possible, and they have
the market power to get away with it.
> Can't be true, Craig. Otherwise, they wouldn't have been described as new.
> Perhaps you couldn't get HBO with as slimmed down a "basic" tier as they are
> offering now, is my bet. Perhaps HBO was not available with that basic-basic,
> never advertised tier, and now it is.
It has always been a separate premium tier that could be purchased with basic
cable.
Regards
Craig
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