[opendtv] Re: How the dollars flow

  • From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 24 Sep 2015 23:26:58 -0400



Regards
Craig
On Sep 24, 2015, at 10:10 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:


I'm simply saying that when local broadcasters act as the middleman to get TV
network content on legacy MVPD nets, they are not essential. The MVPD can
directly sell their content to the MVPD. Just like the cable nets do.

I explained this several times recently. Yesterday I wrote:
If the networks went direct with the MVPDs they would lose the FOTA audience,
but get 100% of the subscriber fees. They could still offer an Internet
service like CBS All Access and delayed access via Hulu, so it would not be
exclusive to the MVPDs.

Bert continues:

The conglom would be compensated regardless. Anyone who takes someone else's
content, and then resells it, can be made to compensate the content owner.
You do not need the OTA broadcaster to get in the middle of that. It was a
convenient way of doing business in pre-satellite CATV days, but is not
needed anymore.

True, if a network went direct with MVPDs like all the other networks they
offer via the MVPDs. I said that before too.

False, if the went FOTI as I explained.

So? The conglom deserves compensation, one way or another, when the conglom
high value content is sold by an MVPD.

I was responding to your statement:

On your second point, this second revenue stream you keep bringing up, that's
**so irrelevant to the conglom**!! As long as FOTA soldiers on, a more
logical solution is for the conglom to pay the broadcasters for their
service, end of story.

Whoops...

Why should the conglom care how lucrative the ads are for the local broadcast
station? As long as the conglom is using the MVPD net and not the OTA
transmitter, he couldn't care less. For OTA transmissions, the conglom can
easily come up with fair payment.

If the congloms went direct with the MVPDs they could control all of the ads.
Or they could do as they are doing now and allow the cable systems to insert
local ads in network programming - this is commonplace, even for ESPN.

And stations now pay the congloms via reverse compensation.

Good for them. Now here's the deal. As middlemen for getting TV network
content on MVPD nets, this "very lucrative" translates to unnecessarily
bloated MVPD subscription fees. No problem, this has played a part in
declining MVPD subscriptions.

Apple and oranges. What the stations make selling ads is unrelated to the
subscriber fees they get via retransmission consent, which is a second revenue
stream - i.e. pure profit.

The role of OTA broadcasters for legacy MVPDs is questionable, since the MVPD
already owns and runs the entire cable plant, and the conglom can transmit
their signal via satellite to MVPD headends. On the other hand, to get local
ISP nets to scale up to more universal use of the Internet as TV delivery
medium, these local broadcasters could carve out a MEANINGFUL new role.

All they need to do is convince the congloms to drop affiliates and go direct
through the MVPDs. Who cares about the FOTA bottom feeders anyway...

Out of sync?

Yes. Out of sync. You stated the congloms should compensate affiliates, as they
did many decades ago.

You have explained how congloms sell a lot of content to MVPDs, without
involving local OTA broadcasters. Which is fair enough, by the way. You seem
unable to conclude that the congloms can equally well sell their
ABC/CBS/Fox/NBC content directly to the MVPDs as well, also without involving
OTA stations.

I have given you the reasons why they DO NOT go direct with the MVPDs several
times. You do not pay attention.

Now to the OTA stations. As long as the congloms want to retain FOTA service,
they have two options: either they sell to the OTA stations, same as they
sell to MVPD nets, and then the OTA stations get all the ad revenues. Or the
congloms get all the ad revenues from their network shows, and then they
compensate the OTA stations for their services. Either way works fine. This
is a very old thread on here, Craig.

Yup this absurd paragraph sums it up well. You are clueless about how the
network/affiliate model works.

Not even close.

Basic/lifeline cable us about $25/mo.

How much is your DSL service?

Already more than 90% of US households have broadband, and the cheaper
variants are well under $50/mo. That's a price the MVPD households pay on top
of their TV channels. Introductory offers for broadband and TV are around $90
to get people suckered in.

Must have been a huge increase in 2015...

http://www.pewresearch.org/fact-tank/2014/09/19/census-computer-ownership-internet-connection-varies-widely-across-u-s/

Overall, 84% of U.S. households own a computer, and 73% of U.S. households
have a computer with a broadband connection to the internet, the bureau
reported. These findings are right in line with survey findings of the Pew
Research Center, which found that 70% of Americans have broadband access.

...

At the opposite extreme, the census data find that nearly 25 million
households (21%) have no regular internet access at all, either at home or
elsewhere. Pew Research Center surveys employ a different metric, asking
adults whether they use the internet; 87% say they do.


And this was before the FCC redefined broadband as 25 Mbps...

No. Thee are no TVE apps for the broadcast networks/affiliates
that get retrans dollars.

Once again, Craig. If you can get a TVE app to play CBS linear streams on
your Cox TVE, it is **only because** Cox has paid the retrans consent dollars
to your local CBS affiliate.

There is no CBS TVE App.

That's pretty hilarious, Craig. The Internet only became the success it is
because the vast majority of its content is free and ad-supported. This
formula was basically invented by TV and radio, and was overwhelmingly
adopted by the Internet, when the Internet first went commercial (1991 or so).

We were talking about OTT Entertainment sites, not the entire Internet.

Regards
Craig

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