[opendtv] Re: Multichannel News: FCC Needs to See the Light (of Innovation)
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sun, 09 Oct 2016 08:40:12 -0400
On Oct 8, 2016, at 7:13 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
I come up with "this stuff" because it took forever to get the point across
to *you* why the STB idea was passé, OBE, never mind the FCC.
We agreed on this from the beginning Bert. That does no change what I said.
when you continue to insist that the FCC proposal is not satisfied by the
paradigm shift, it makes it sound like you still don't get it.
The paradigm shift is happening, albeit slowly. The fact remains that nearly
100 million homes are stuck in the old paradigm, and the MVPD systems have many
tools at their disposal to keep people inside their "walled gardens." So there
are two potential scenarios here:
1. The FCC does nothing. In this case it is primarily up to the content owners
to decide how quickly they want to kill the MVPDs and replace them with their
own VMVPD service like the one announced by Hulu. They still have contracts
with the MVPDs, so it could take years for this scenario to play out.
2. The FCC moves forward with this NPRM, perhaps with a bit more clarity on how
they will regulate licensing. It will take several years for the proposed
inter-industry group to create the new "open STB" standard, and for companies
to implement the standard. The MVPDs will then need to upgrade their head ends
to support it. If the FCC does not set a date certain for these upgrades things
could drag on for a decade or longer, as it did with the DTV transition.
Obviously, scenario 1 can play out regardless of what the FCC decides, however,
if the FCC gets involved in licensing then all bets are off. The content owners
may litigate the decision and delay planned deployments.
The FCC has shelved that proposal for the time being, Craig, and my bet is
that it won't come back. The majority of the commissioners do seem to get it.
You insist they don't. Why?
Because there are only two solid votes against the NPRM. The swing vote is in
play and it remains to be seen what changes are made to the NPRM to swing that
vote to the other side.
We agree the FCC should just drop it. But they are under significant pressure
from the administration to get this done now.
Maybe this is why. You won't let go. The legacy systems are dying their own
gradual death, so no one needs to care.
They are not dying Bert. There has been limited cord cutting, yet nearly 100
million homes still subscribe to these services. You used the word "gradual,"
which is the operative word here. Is gradual another decade? Two?
Who knows.
What we do know is that major investments have been made in these systems and
the investors are not giving up.
Look at DirecTV and AT&T.
From your world view this relationship has failure written all over it. DBS
systems cannot make the shift to demand based programming; at best they can
move from MPEG-2TS to IP streams. And AT&T is primarily offering DSL, which
does not scale up for decent VMVPD service.
But I was watching their commercials last night on ESPN, and they pulled a
rabbit out of their hat. If you subscribe to DirecTV and AT&T wireless, you can
stream every live channel on DirecTV to your phone - and the data does not
count against your data plan.
So AT&T thinks they can stay in the game using DBS to push the live streams to
the big TV in the family room, and pull both live and VOD streams through their
wireless data network. And they own exclusive content like the NFL Sunday
Ticket.
Connected TVs are easy enough to manufacture, evidently, as are any number of
other streaming devices, so the old way of watching TV is disappearing.
Nope. It is being augmented with new services delivered via IP networks.
I need not remind you that a small minority of TV programming is now being
consumed by appointment, and that using the old-fashioned PVR for time shift
viewing is, you know, the old way.
Wrong again. The MAJORITY of TV viewing is still live as the recent articles we
have been discussing confirms.
There are better ways now. People are figuring it out. The supposed "100M
subscribers" are using that legacy box less and less, even if they remain
terrified by the idea of cutting the cord.
There are MORE ways to consume entertainment content on more screens. This does
not mean the old business models are dying. People are BUYING both.
The point being, "licensing" is a simple matter of paperwork. What licensing
agreements old technology forced on the industry bear no resemblance to the
licensing agreements that make sense today. Technology trumps old business
models. We DO NOT HAVE a stagecoach industry anymore, Craig. Get used to it.
No Bert. Technology simply enables new ways to solve old problems. The content
owners are fully in control and "may" use new technologies to enhance their
control over the distribution of entertainment content. The content owners will
continue to follow a business model that maximizes their revenues. And this
includes selling bundles of networks, as this maximizes both ad and subscriber
fees revenues.
If there is any significant change taking place here, it is that the content
owner may be able to take over the profits now captured by the MVPD systems.
Time will tell.
Oh, so now Craig is unaware that VCRs have come and gone, and been replaced
by better ways of watching on demand? Do you think that TV can only be
watched by appointment, Craig? Really?
Stop it Bert.
The VCR enabled several very important new revenue streams for the content
owners, by allowing consumers to have more choice than broadcast TV and the
nascent cable industry. We are talking - endlessly - about ways to access
library content. First syndication, then packaged media on tape then DVD, then
rerun channels on the MVPD systems, and now free VOD and SVOD services.
In the end the outcome is the same - people watching old TV shows. Recently,
the content owners have added the ability to "catch-up" with current season
shows and time shift without a DVR.
This is evolution, not revolution.
Plans? No, Craig, they have already done so. The plans are in the past. Now
we have the implementation. You are stuck back 40 years ago.
What has changed Bert?
Forty years ago we had broadcast TV with a choice of a handful of channels. I'm
certainly not stuck in "that" past.
We are stuck in the present Bert. If you want access to the most popular
entertainment content you buy it in bundles, from a MVPD, VMVPD, or SVOD
service. If you want the crumbs you can watch that 40 year old broadcast TV
content, or find a free VOD service to access it on a delayed basis.
A non-problem. Some web sites will go this route, some will remain national
in footprint only, without local newscasts and local weather. Why do you even
link local monopoly MVPDs with such business evolutions?
Because they are local and sell millions of dollars in ads in these local
markets.
In fact, if anything, it would be the local OTA broadcasters that will work
with this new way of doing business, not the local monopoly MVPDs. These are
natural evolutions of the industry.
The local broadcasters compete with the local MVPD sales reps. They have no way
to sell ads to insert into any other content. I suppose the content owners
"could" cut them in on this opportunity, but you still have the issue of how to
insert the ads. Do you put the edge and insertion servers at the TV stations?
And if you do, there's still the issue of interconnection agreements with the
ISP monopoly.
And that's why very conglom **today**, and certainly in the future, is making
itself available in multiple ways. What's your point, Craig? I've been
explaining this to you forever.
Because you are trying to convince us that the way they reach the vast majority
of homes is dying, to be replaced with a direct to consumer subscription to
each content conglom.
Another one of Craig's now-famous proclamations? As I said before, this is
one model that works, and I use it all the time.
So you pay for CBS All Access Bert?
Who knew?
There are other models that are used simultaneously, such as Amazon, Netflix,
Hulu, and Yahoo View, and no doubt many more to come, that aggregate these
congloms' content in *different ways*. We are WAY PAST your exclusive local
monopoly umbilical, Craig.
Just the old library content Bert.
And all but one example you give is a subscription based pay service.
Regards
Craig
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