[opendtv] Re: IP-Based TV Will Revolutionize Entertainment

  • From: John McClenny <jamcclenny@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Mon, 2 May 2005 08:59:43 -0500

On 5/2/05, Craig Birkmaier <craig@xxxxxxxxx> wrote:
> At 7:02 PM -0400 5/1/05, Manfredi, Albert E wrote:
> >
> >Craig, Craig. You're jumping to another discussion again.
> Bert, Bert, Bert.
> I am discussing the real issue at play here.
> While SBC and the rest of the RBOCS would love to succeed in the
> walled garden arena, they don't have a chance with this approach.
> They are too late into the game and have very little to offer that
> would cause a significant number of consumers to switch from cable or
> DBS. All it will take is a few major content holders to refuse to
> play ball and they will be shut out.

The content providers will sign up - they can charge the telcos
somewhat higher rates than they can charge Comcast and anything they
do to increase their pricing power is a good thing for them.  Plus
they get tighter DRM than the MSOs provide.

The telcos can offer a better user experience than the MSOs, mainly
because they are starting later with more capable STBs and newer

> But they do have a chance to play the ala carte card, and to open
> their "gardens" to the content providers who are being shut out by
> the existing gatekeepers. In time, this could be sufficient to cause
> a seachange in the way consumer buy content. We shall see.

Basically, content providers could buy access to the STB and a spot on
the channel guide, as well as the network capacity to deliver the
content.  Think of it as the equivalent of buying time for a
infomercial, but with real content.  How is revenue generated?  PPV?
advertising?  If advertising, how do we aggregate enough eyeballs to
make it financially worthwhile to support the ad sales and creation

I don't think that telcos will go to a pure ala carte strategy - it
makes the initial ordering problem really hard in even a 300 channel
lineup where the core offering is equivalent to an extended basic
cable offering.  I do expect more granular bundles that cable offers.

Plus, adding additional content makes it harder to find the content -
even the limited content that my Time Warner cable supplies is
difficult to search - kick that up to 1000 things to watch and the
search problem gets nasty on a TV set.

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