[opendtv] Re: Hub Research: What’s TV Worth 2015
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 12 Dec 2015 10:27:48 -0500
On Dec 11, 2015, at 10:36 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
You deliberately missed it, Craig. In the 1980s, cable made it difficult for
people to use their VCRs, so most people were too lazy or clueless to time
shift their shows. Then the cable PVR came to the rescue, but still the vast
majority of TV was consumed the old-fashion way.
Sorry. I forgot you never subscribed to a MVPD service...
What I said has nothing to do with VCRs or PVRs. It has everything to do with
the way the new cable networks were programmed. CNN offered 24/7 news rather
than a few appointment newscasts; and Headline News offered a fresh newscast
ever half hour. The Weather Channel did the same for weather and provided local
weather updates "on the eights," i.e. at :08, :18, :28, :38, :48, :58 each hour.
Networks like Discovery, Food, HGTV and most others with original content
programmed the channels using a checkerboard technique. A new episode of a
program would typically be offered 5 - 10 times in the month following its
release. This was the cable industry model to accumulate audiences, which
predates catch-up streaming by decades.
DVRs and in band VOD made it easy to time shift (the VCR was not easy to use
for time shifting). The checkerboard programming model made it easy to use the
program guide to find the next instance of a cable show to record with the DVR,
whereas, if you missed a network show there were no opportunities to record the
next instance, until next summer.
Back in the '80s the broadcast networks still believed that keeping access
limited cause people to make an appointment for their favorite shows, then
stick around for the next show. The next access point was a summer rerun.
The cable industry taught them how to accumulate audiences. As they have for
decades, the CEOs take their time to understand "new opportunities," then they
"embrace and control."
And this is why, IMO, as I said at the start, that FCC definition of "VMVPD"
totally misses the boat. OTT sites wanting to sell TV content have no
incentive to just copy your old model. First, because people wouldn't bail
out just to buy the same thing. And mostly, because people have gotten past
by-appointment viewing.
No VMVPD service will be successful by copying the legacy MVPD model. Sony is
trying in a few cities, and is still crippled by the lack of ESPN. At best they
are offering more of the same.
Obviously MVPD subscribers are not happy with the existing business model -
it's an all or nothing service than can only exist with colluding oligopolies.
It is bloated with rerun channels that are outdated, and it requires you to pay
for stuff you don't want.
You pal Les has it exactly right:
“This will happen,” Moonves said. “It has four major networks and 10 cable
networks, let’s say, and the price point will be in the $30s, $30 to $35, $40
maybe. People will not be spending money on channels they don’t want to
watch.”
Then in the next breath he tells the people attending the conference that the
content owners are not willing to give Apple or consumers what they want.
It will happen when the bottom line starts to suffer - for now there is no
pressure to change business models, because the new model you are pushing is
driving more money to their bottom lines.
If the FCC wants to force content owners to make their stuff available to OTT
sites, they have to drop that linear channel mandate. Or better yet, drop the
whole notion. The OTT sites don’t seem interedted in any copy-cat service,
and the numbers describe why.
The FCC may well extend the program access rules to VMVPDs. But that will not
change much. At best it will mean that the content owners cannot ask for higher
prices than they charge the legacy MVPDs. But that means that any VMVPD service
will look just like every cable and DBS service.
You are right about the numbers. The cable guys in particular have the upper
hand as they can bundle multiple services to keep their service sticky.
The only way to change this would be to subsidize the new business model, much
as Amazon has done with online shopping. If the FCC does mandate program access
for VMVPDs, a company with deep pockets like Apple could license everything the
content owners want to force them to buy, the sell consumers only the channels
they want to buy; they would have to subsidize the difference.
Might be worth it to bust the content owner/MVPD trust.
Regards
Craig
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