At 7:16 PM -0400 3/17/12, Albert Manfredi wrote:
See, I've been saying exactly the opposite, so you clearly aren't paying attention. If a TV broadcast utility is built, especially something like LTE, the congloms will have **no reason** to use the existing local broadcasters as middlemen. The congloms can deal directly with whoever owns the utility - maybe one company or at most two per market, JUST AS they now deal only with ISPs when delivering their stuff on the Internet. No local broadcasters involved there either, right?
Looks like you are the one who is NOT paying attention.I just told you that there will likely be at least five broadcasters sharing spectrum in larger markets, and that they may either collaborate with the telco oligopoly (which typically has at least three carriers per market), or compete with it.
The congloms "MAY" deal with both depending on the type of content, and WHO owns the rights. For the typical prime time fare, there will be a live audience (those watching at the time the program is originally broadcast, and a demand audience, which may watch at ANY time, but for the most part will watch on a fixed receiver at home, or download an episode to a mobile device when traveling. For live sporting events the audience is predominantly live, and may have a significant mobile component.
If broadcasters build out the LTE broadcast infrastructure, then content providers - whether they are the congloms or the sports leagues who now deliver their content via the congolms - will likely negotiate rights for carriage via the LTE broadcast infrastructure. If the broadcasters do not build the LTE broadcast infrastructure, the telcos will.
The reality here is that we have multiple oligopolies - congloms, local broadcasters, telcos and sports leagues that are going to figure out how to maximize revenues, either by working with or bypassing current "partners," or by affiliating with a new partner.
So the following scenario "could play out:The NFL decides that they can make more money by bypassing ESPN and the broadcast networks, delivering their games directly to fixed receivers via the wired Internet. But they still want to reach the mobile audience, including everyone who is tailgating outside the stadium AND those inside the stadium during the game, and others who only have access to a mobile service. So the NFL may decide to work directly with whoever owns the Broadcast LTE infrastructure. In this case the congloms get cut out and the local broadcasters stay in the picture if they invest in broadcast LTE.
If you want to see what this RF utility model looks like, just look at OTA TV in Europe. Local broadcasters are few and far between. The few there are get their local content on the RF utility. With such a model, you only need one or two per market, if that many. Many smaller markets have no local broadcaster, and maybe just a regional net.
This is one possible outcome. But remember, in Europe "commercial TV" was very late to the party, because the governments wanted to control the content.
The smaller markets in Europe - where there is not local TV - probably do have local newspapers and now local Internet sources.
There was a time when every major city in the U.S. had multiple newspapers. Those days are now history, in large measure because of the impact of local TV, and more recently because of the impact of the Internet on classified and display advertising. Now local newspapers are beginning to compete with local TV on an equal footing, offering what in many cases is a superior "on demand" product with photos and video.
So in a sense I can agree with Bert, that the potential exists for Local TV in the U.S. to atrophy to only one or two stations per market.
But that's the whole point here. Do broadcasters develop a new business model that can survive the transition to an anywhere, anytime mobile future or ride quietly into the sunset...
As long as the congloms have the content people want, and they do, your business model had better include them, Craig. Just because you have an RF utility doesn't mean anyone gives a rat's *ss, unless you put content on there that they care about.
I agree completely on this point. But be careful about what content you are talking about. The broadcast networks now have less than 40% of the eyeballs in prime time (FAR LESS in other day parts). The cable networks that the congloms bought or started in the '90s are now what the majority watch. And then there is live sports, which is the most important of all in terms of economics.
And here is an example of what can happen. http://www.ncaa.com/march-madness?sr=college_basketball_tournament_online_MMLsearchYou can watch ANY game in the tournament online live, directly from the NCAA. But it will cost you $3.99.
Nobody is saying that any of this content is going to disappear. What people are saying is that the existing business models are being disintermediated by the wired and now wireless Internet. What is changing is the ability of the congloms to maintain 90% control over all of the content we consume.
The point I was trying to make is that the TV business is bifurcating. It is no longer necessary to schedule an appointment with your TV to watch most of what broadcasters deliver.Honestly, it's been 30 years now since people had to deal with TV by appointment. Beyond VCRs, beyond automatic PVRs, beyond in-network MVPD PVRs, the local broadcasters and the congloms have been putting their stuff on the Internet FOR YEARS now. So why do you keep trying to make it sound like you're divulging some brand new trend? WE KNOW THIS, Craig. Broadcasters have been transmitting live streams, OTA if not also on the Internet, AND allowing you to view their content **on demand**, over the Internet. This is not new to broadcasters and congloms!
Not much of this stuff is available live on the Internet. The first runs and live sports events are typically NOT available on the Internet. ESPN has been offering some of their stuff for free on ESPN3, but in most cases the stuff you want to watch is blacked out in the home markets to protect TV broadcasters. So if you live in the Southeast, don't expect to see SEC and ACC games live on the Internet, but if you live in Denver, or LA you probably can.
What is important here is that the limited amount of high quality content that is offered by the congloms during Prime Time is no longer a huge draw, and after the first broadcast is generally still available. Compare this to the days when we only had 4-5 channels (and nothing else to watch),and you had to wait until summer to see a rerun of a program you missed.
A broadcast license is THE MOST valuable asset that a broadcasters has.The value of things changes with events, Craig. Have you been paying attention to home prices lately? The reason the broadcast license was valuable is that broadcasters were required to distribute very valuable conglom content. Failing that valuable conglom content, once the single OTA RF utility takes on that role, the value of all the other broadcast licenses vanishes. Or do you really think that the one or maybe two daily local newscasts created the high value?
To an extent your point is valid. Station valuations have been on the decline, and without retrans consent dollars the congloms and their affiliates would be in more trouble than they already are. But that's the nice thing about operating a government supported oligopoly...
There was huge growth in the number of TV stations during the '80s, when cable was beginning to become a competitive force. There was a time when spectrum was so valuable that Low Power TVs stations were popping up everywhere. Many of the stations that went on the air in the '80s are likely to take the money and run. We are about to go back to the days when there were only a handful of stations in every market.
The real question is whether the station groups can figure out how to build a new infrastructure and business model that keeps them relevant. I believe they will!
There are already local productions on OTA DTV, as well as on MVPD networks. Just how popular do you think they are? If they ever did get popular, they wouldn't remain local!
Clearly this is an important issue. But it is challenges like this that lead to real innovation, which in turn replaces businesses that fail to innovate.
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