[opendtv] Re: FCC wants to redefine MVPD
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 17 Jun 2015 11:14:24 -0400
On Jun 16, 2015, at 9:00 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
Not according to the NCTA. So, acknowledge that and move on, instead of going
back to square one. Plus, now sites like HBO Now, AMC, HBO, Showtime, etc.,
also carry this content. Plus, Netflix and Hulu also contain MVPD-exclusive
shows, sometimes, on Hulu especially, with a very short delay.
I acknowledge that the NCTA does not want more competition via the Internet.
You read the story - they do NOT want the FCC to extend the program access
rules to virtual MVPDs. They want the definition of a MVPD to be based on the
operation of physical facilities - i.e. Cable, DBS, and Fios.
The FCC NPRM asks whether they should extend the program access rules to
virtual MVPDs. Obviously the cable industry does not want this, as they will be
the primary pipes over which new competitors can deliver cheaper bundles with
more choice/customization.
The fact that networks which were formerly available ONLY with a MVPD
subscription has nothing to do with this. They are still sold by MVPDs, often
with higher margins than those offered to the new middlemen. And many
networks, like AMC, are making older shows available to encourage "catch up,"
which drive viewers to the linear network delivered ONLY by MVPDs.
Probably. My point is simply that the redefinition of MVPD, by the FCC, will
not change reality. Reality being, OTT sites compete on flexibility, and
therefore, OTT sites are unlikely to offer exact replicas of traditional MVPD
service.
We are moving into an era with many business models. Ratings for linear
networks are declining with the exception of live events and a handful of shows
- e.g. The final episode of Mad Men or the premiere of a new season of Game of
Thrones.
You ignore the fact that the traditional MVPDs offered more than linear
networks before OTT became a practical reality, and that they are working with
the networks that are exclusive to MVPD services to develop TV Everywhere, an
OTT enhancement to the linear streams.
As for exact replicas, this does not exist even among facilities based MVPDs.
Every service offers different bundles at different price points. Every service
has add on packages that vary in content and price, often related to regional
interests, especially sports.
We agree that people are fed up with paying for channels they don't watch. And
we agree that the Internet is providing the stimulus for competition - smaller
bundles with more customization.
Facilities based MVPDs can also compete based on flexibility. Actually they
already do. Just call and threaten to cut the cord and they will pull out the
unpublished price list.
Hence, as the FCC redefines the term, it becomes so diluted as to be almost
meaningless (except for legal matters of acquiring rights to content). By any
other name, these are OTT sites and nothing like MVPDs, no matter what the
FCC decides.
Meaningless except for the legal matters?
That's what props up the bundles. It is the leverage that the content owners
use to sell/require the carriage of all of the second tier rerun channels. It
is the reason that Verizon is being sued for breach of contract...
Expensive? At what was it, $13/mo, for someone who doesn't want most of
what's on cable, and needs that broadband connection for everything else
anyway, including telephone service, you call that expensive? Compared to
what? People have gone in droves to Netflix, which costs just a few dollars
less, and dumped their "the bundle" as a result.
The price is $15/mo. For new subscribers, Netflix is now $8.99/mo for new
subscribers.
The price point for HBO has been a barrier to acceptance - they have never
reached more than ~30% of MVPD homes. They hope that HBO Now will expand their
subscriber base in the U.S., but the jury is still out.
No doubt some people cut the cord and subscribed to Netflix, and it is likely
that some of these cord cutters will subscribe to HBO Now - that is why HBO
created the service.
But the majority of Netflix subscribers ALSO subscribe to a MVPD service.
The reasons are obvious - neither Netflix or HBO provide a "balanced TV diet."
MVPD services are like a buffet - they offer a complete selection of content,
much of which people never consume.
This is part of the reason I keep saying nothing has really
changed except the size and composition of the bundles.
Almost like saying, nothing has really changed except for every component
part and the sum total too.
Not really.
The only component that matters is revenues, which keep growing as people
willingly for their TV fix. The rest is just evolutionary change enabled by a
vastly superior distribution medium.
Regards
Craig
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