[opendtv] Re: News: The People Vs. Comcast

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Sun, 13 Jan 2008 18:40:40 -0500

Craig Birkmaier wrote:

> Nice try Bert, but your view of the "marketplace," is
> skewed...
>
> The market for the delivery of TV content in the U.S. is
> heavily regulated, not relatively free.

Granted that it is regulated to some degree, although not nearly as much
as other similar industries -- the real utilities.

The fact remains, cable/DBS/FiOS/IPTV are not essential to human
survival, there are "free" (as well as pay) alternatives, and yet 85
percent of households continue to subscribe. It is impossible for anyone
to claim that the price is too high. That's just plain political
rhetoric.

Businesses are in business for only one reason, in this form of economy:
to make a profit. The way you maximize that profit is you set the price
as low as necessary to get the most possible customers, then crank it up
to maximize your profits. At some point, when the price goes too high,
you will lose enough customers that your net profits start to decline.
That's when you dial back the price. The goal is to net the max profit.
You adjust the price accordingly.

With 85 percent of households subscribing to TV all-you-can-eat buffet
distribution, CLEARLY, multichannel services can continue to demand
more. And just as obviously, they have no incentive to undercut their
competition by any significant amount. Marginal changes in pricing and
service offerings are plenty sufficient to create the kind of churn the
newcomers want.

> You seem to agree that the broadcasters are using regulatory
> power to get subscriber fees for programs that can be pulled
> from the air for free.

The real players don't use regulatory power, they use retransmission
consent. I don't consider that anything but business doing what business
does. If my programming attracts customers to your walled garden, I
demand a cut. If you don't give me a cut, I pull my programming. Simple.
If Cox refuses to carry CBS, but DirecTV and FiOS do carry CBS, guess
who loses out?

> Invoking the old saw that consumers can "just say no" if the
> prices are too high, misses the point entirely. It is
> difficult to say no, when there is only one electric utility
> to buy power from,

Which is not comparable with TV distribution. It's simple, Craig. If you
guys in Gainesville would stop playing into the hands of the umbillical
systems, you would see more than four measly OTA stations in your
market. You can be darned sure that the media conglomerates WILL NOT
simply bow out of the Gainesville market. They will find whatever
alternative distribution media they can, including OTA, if consumers
came close to using their clout.

> You may be satisfied with OTA TV, but the vast majority of
> Americans consider cable/DBS to be a vital utility,

Aargh. Businesses just love to hear that sort of reasoning, especially
when they know that they cannot be regulated like real utilities,
because they are not real utilities. So if the trade and amateur press
can convince the public that these businesses are "vital" to their
survival, wow, what great free advertizing. Tell people that to be "real
men," they need $100-$150/mo. subscription packages, or no way will
their friends be impressed.

GM successfully convinced the public that to be "real men," they had to
drive obscenities. Gullible, timid consumers happily obliged. This past
year, GM saw the writing on the wall, and is converting to a new
religion. Have you noticed? TV can do the same thing. However, the best
way for this to happen is to get consumers to show a little spine.

Bert
 
 
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