[opendtv] Internet TV business model changes

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Sat, 4 Jan 2014 00:59:15 +0000

Craig Birkmaier wrote:

>> So, the cost structure for this new role of TV content through
>> Internet SHOULD BE entirely different from what MVPDs did previously.
>> The FOTA model can translate *directly* to FOTI, most likely
>> benefitting the TV networks.
>
> Not a chance. The only way they could go back to a single ad driven
> revenue stream would be to charge enough for the ads to replace the
> second revenue stream they receive today.

Yes, and when you get a huge audience, you CAN charge more for the ads. This 
goes beyond the US. The same can be said about international distribution. The 
cost structure there can also change, especially for programming that is left 
intact, not even dubbed.

I know you'll come back with this business about agreements in place now. 
That's the same argument as you make when you tell me the MVPD price structure 
has to remain unchanged, even for TV over an independent ISP network. The 
networks have the content, Craig. They da boss. BTW, it looks like Germany is 
allowing all of its Internet TV to be viewed here, and I assume elsewhere too. 
So you tend to be way more negative about these changes than is warranted.

> They could make some of this up by not having affiliates who get a
> portion of the commercial inventory and retrains consent fees.

Yes. All the ad revenue. They have to pay whoever hosts their sites, of course.

> But they would face another huge problem.
>
> The Internet can tell them, and the advertisers how many people are
> watching, and in most cases, who they are.

In principle, yes. (If I were an ISP, I might just charge the networks for that 
kind of information.) Is this a huge problem? My bet is, NOT for the major 
networks. It's a bigger problem for that local government weekly meeting type 
of programming the FCC seems to like.

> So the cable and telco broadband infrastructure just goes away?

Already covered that. It's not the networks' concern.
 
> Bottom line, the congloms are not going to accept a decline in revenues.

The bottom line is that the NETWORKS stand to gain a whole lot. Today's 
middlemen, maybe not.

> Maybe you should look at it this way Bert. The Congloms used FOTA TV to
> get the population hooked on the drug they sell.

Think of it this way, Craig. The networks STILL transmit FOTA. If you say so, 
we'll pretend it's to get people hooked. And they can continue to do that as 
FOTI. For the addicts, they can either host their own for-pay extra 
programming, on the Internet, or continue doing what they are already doing, 
with for-pay OTT sites. I don't see how the networks can lose.

Bert
 
 
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