[opendtv] Re: Electric power as a natural monopoly

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Thu, 13 Feb 2014 08:53:35 -0500

On Feb 12, 2014, at 9:10 PM, "Manfredi, Albert E" 
<albert.e.manfredi@xxxxxxxxxx> wrote:

> Too bad, so sad. If the younger generation continues to show some backbone, 
> Craig, the sports franchises (and/or ESPN) will *have* to make changes. 
> Besides which, you (and ESPN) won't get a lot of sympathy from me if your 
> business model depends on subsidized sports programming. I'd rather subsidize 
> food stamps. All you're telling me is that the ludicrous incomes of these pro 
> "athletes" are paid mostly by people who couldn't care less.

Backbone? For large demographic groups of the "younger generation" becoming a 
pro athlete, or a Hollywood celebrity is the only path they can see to the 
American Dream. Unfortunately, for most, the dream is beyond their reach; 
welfare and food stamps is their "reward."

While I understand why you (and I) are opposed to subsidizing college and pro 
athletes, I do not understand why you want to have working people like us 
subsidize the welfare systems that have led to INCREASED poverty and government 
dependence since the U.S. declared war on poverty.

My wife runs a program that provides pre-natal care for the welfare and illegal 
immigrant population in the 16 counties that surround Gainesville. She tells me 
that many of these welfare moms, who live in subsidized housing, receive food 
stamps, and other government benefits, somehow afford cable service. Perhaps a 
MVPD subscription will become the next freebie, along with those Obamaphones...

I apologize for turning this discussion to politics, but in reality, TV IS 
politics. For some reason Bert does not understand why the media congloms have 
avoided the same fate as other industries that have been disintermediated by 
new Internet competitors.

> Absolutely. Any OTT site should offer this to the sports leagues. And then, 
> they can offer their viewers some different options than the old MVPD tier 
> system. Sports nuts might find it acceptable to pay that $22 per month, if 
> they didn't have to pay for all the rest that they don't use. And besides, if 
> $22/mo. ends up being too high in the future, these overpriced athletes will 
> get a dose of reality. You will only bring these absurd costs under control 
> if people are paid what they are actually worth.

Unfortunately, things just do not work that way. We keep hearing about income 
inequality, but the politicians have no problem when the "overpaid stars" in 
sports and media support progressive causes. Do you hear them complaining that 
we pay the stars too much? Then again, the politicians are just actors too, 
working in the world of political theater.

I am working now to update the statutes that regulate the beer industry in 
Florida. I testified at a hearing of the House Professional Regulation 
Committee Tuesday. The entrenched middle tier of our industry - wholesale 
distributors - has a lock on profitability. We must sell to the distributors 
who typically get 30%. They have been funding local campaigns for state offices 
for nearly a century. How do we counter this? 

We met with a State Senator several weeks ago. The Senator is sympathetic to 
our needs. In passing, we were told that the opposition has given a bag full of 
check to the Senator's campaign. Fill in the blank.

So we are forced to creat a Political Action Committee so we can write checks 

How much is a politician worth?

> Unless you're feeling personally threatened, by the possibility of losing 
> your subsidized ESPN, I'm not sure I understand why you insist on the MVPD 
> tier model so much. Are you saying that the NFL et al would NOT do business 
> with OTT sites, if they saw their MVPD subscriptions falling off?

Stop with the typical false political speak Bert. I am just as opposed to the 
MVPD bundles as you are, with the exception that I pay, while you don't. You 
hold to the belief that the marketplace will deal with the problem. I keep 
showing you the reality that there is no marketplace, just some powerful 
oligopolies propped up by the politicians.

The NFL is just as greedy as the other content congloms. And their empire is 
propped up by politicians at every level, from anti-trust exemptions to public 
funding for their sports palaces. They already operate the NFL Network within 
the walled gardens, and they consider every potential "channel" to reach 
viewers a new opportunity to make even more money. 

For example, want yo watch an NFL game on a mobile device. Those right are 
separate from the broadcast TV rights. You can bet that Verizon's LTE Broadcast 
service will offer NFL games... But you will need a paid App or that. 

This could be a major barrier for broadcasters moving to Broadcast LTE. They 
don't have the mobile rights for games they broadcast now.

> Not at all. All it will take is the newer generation continuing to resist 
> paying subsidies. Your arguments all seem to hinge on why the existing 
> players prefer it the way it is. Hey Craig, guess what, a lot of bookstores 
> probably also thought that way. What happened to them, eh?

To quote a popular politician: "what difference does it make?"

The TV content behind the pay walls may well move to the Internet, but it won't 
be free. In fact it may cost more. The only way to kill the cash cow is to make 
bundling illegal, or for the vast majority of viewers to stop watching.

The congloms are more than happy to let some stuff leak to the minority of 
people who don't pay. There is money to be made there too selling commercials 
to niche audiences.

To believe that the Internet will cause these walls to fall as they have for 
other industries, is patently absurd as long as they have the full force and 
power of governments at the local, state and federal level to protect them.

Funny you should mention bookstores. Amazon has eaten their lunch and now 
enjoys a near monopoly in E-books.

Did the government go after Amazon for a classic example of "dumping" to gain 
monopoly control of the E-Book market? No, they went after Apple, for trying to 
move the industry to a (perfectly legal) Agency model, which would have allowed 
publishers to curtail the ability of Amazon to sell books below cost.

We live in interesting times...


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