[opendtv] Re: Google Fiber and Verizon FiOS
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 30 Aug 2016 22:30:20 -0400
On Aug 29, 2016, at 11:08 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
Craig Birkmaier wrote:
Take away the revenues from MVPD service and the investment becomes
less viable, more risky.
That assumes that getting the rights to content costs next to nothing. But
the truth is, some MVPDs discovered that selling broadband service only nets
them greater revenues. So, Google Fiber's problem is more credibly unrelated
to the fact that they weren't planning on offering MVPD service. And oh by
the way, FiOS *was* offering MVPD service, and *still* called it quits.
The take-away here is that cost calculation is not quite what you're
assuming, Craig.
The take away is that you have no clue. Where Google has fiber systems they
compete for MVPD service as well - about 65% of their subscribers take both
broadband AND MVPD bundles.
So what happens if you are right and the Internet video streaming services
make subscribing to a MVPD unnecessary? Or if I am right and the content
congloms take control of the MVPD bundles as they are about to do with Hulu?
The incumbents can survive selling broadband, as they have amortized much of
their investment, and it may take years for existing MVPD subscribers to "cut
the cord." New overbuilds must be justified on selling broadband only; their
costs will be significantly higher unless new wireless technology can reduce
the capital and construction costs.
And then there is the prospect of rate regulation...
Regards
Craig
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